LONDON, Jan. 11 (UPI) — After selling of interest in a lucrative Ugandan oil basin, Africa-focused explorer Tullow Oil said it was tooled for production growth despite a rough year.
“2016 was another tough year for the oil and gas sector and for Tullow,” CEO Aidan Heavey said in a statement.
The company last year was plagued by equipment and legal issues at some of its prime holdings in Africa. The compounding strains of lower crude oil prices in 2016 forced the company to cut its spending plans , though in October it secured $345 million from lenders to help cover some of its debt, support it said would clear up some space for refinancing in 2017.
Tullow this week secured $900 million after selling a stake in the lucrative Lake Albert development in Uganda to French supermajor Total. Heavey said that deal should be seen as vindication that its focus on African basins is starting to draw wider attention in the industry.
With lender support and many of its recent difficulties in the rear-view mirror, the CEO said the company was in a position now to exploit improving conditions in the energy sector.
“We took action early to deal with lower oil prices and we are now benefitting from the reset and restructured business that we created,” he said.
West African production last year was around 65,500 barrels of oil per day, in line with its most recent expectations. For 2017, the company said it expected its working interests in the region would yield between 78,000 and 85,000 bpd.
Tullow’s operations at the offshore Jubilee oil field, one of its more promising holdings, were restricted last year by technical issues at a gas compression system and the company in early April said part of the so-called Kwame Nkrumah floating production storage and offloading facility positioned off the Ghanaian coast was damaged and no longer functioning as designed
Remediation work continues and the company expects enough progress so that Jubilee will contribute the bulk of what Tullow expects for production this year.
In administrative moves, Tullow said it was reshuffling its top management as Heavey, the company’s founder, starts a slow transition toward retirement.