….As Tullow’s farm-down process takes shape

Tullow Oil has pegged the overall cost of developing the Tweneboa-Enyenra-Ntomme (TEN) oil fields at around $4.9 billion.

This however excludes the Floating Production Storage and Offloading (FPSO) lease costs. The company says the conversion of the Centennial Jewel trading tanker into the TEN FPSO continues on schedule at the Jurong Shipyard in Singapore.

Meanwhile, the process to partially farm-down Tullow’s interest in the project is on-going.
A farm-down is a common practice where a licensed exploration company, having struck oil or gas, sells a share in its rights over the discovery to other companies to share investment cost.

In its 2014 Half-yearly Results released a few days ago, Tullow said the TEN Project is on target and on budget to deliver first oil in mid-2016, adding that that will be followed by a steady ramp up towards the FPSO capacity of 80,000 bopd by 2017.
The development includes the drilling and completion of up to 24 development wells which will be connected through subsea infrastructure to an FPSO vessel, it said, adding that development drilling commenced in 2014 and to date, eight of the ten wells expected to be on stream at start-up have now been drilled.
The process to partially farm-down Tullow’s interest in the project is also on-going, the company added.

It said the TEN project is progressing well with 30% now complete, with all major contracts awarded, Tullow delivery teams in place and all work permits ready for installation works to begin in 2015.

On Jubilee, Tullow said the Field’s gross production averaged approximately 103,000 bopd for the first half of 2014 in line with expectations, adding that the Group remained confident of achieving its full year average Jubilee field gross production target of 100,000 bopd.

Touching on the Gas Processing facility, the company said the project, which will allow for the offtake of Jubilee associated gas, is expected to be completed in the fourth quarter of 2014.

“A bypass line is also being pursued to route a limited quantity of offshore gas directly to the power plant when the gas processing plant is under maintenance or not available for operation”, it stated.

It referred also to the approval granted by the Ghana Environmental Protection Agency to permit the flaring of 500 mmscf of gas per month from the field until the end of October 2014, saying the limited flaring will help maintain current production rates while ‘we await start-up of the main gas processing facility which will then allow a ramp up of production from the Jubilee field towards the facility capacity of 120,000 bopd’.
Writer’s email: tommyekpe@gmail.com


Published in The Business Analyst No. 094 of Wednesday, 20th August, 2014 – Tuesday, 26th August, 2014