Tullow Oil Plc (TLW), the U.K. explorer with the most African licenses, will expand in Mauritania after the success of the Jubilee field in Ghana.
The company revised a production-sharing contract with the Mauritanian government to start developing discoveries made off the West African country and continue exploration, it said today in statement. Tullow has increased its interest in the projects following transactions with Australia’s Roc Oil Co. and Petroliam Nasional Bhd. of Malaysia.
“The real driver of this deal surely must be securing the exploration acreage offshore Mauritania under a long-term deal,” said Phil Corbett, an analyst at Royal Bank of Scotland Group Plc, which is Tullow’s in-house broker.
Tullow has been producing oil from Chinguetti, Mauritania’s first oil field and one that failed to meet its targets, prompting the U.K. explorer to consider exiting the project. The company is also exploring off Mauritania with a unit of Korean National Oil Corp. Tullow’s Jubilee oil field in Ghana has propelled that country into the top 50 producers in the world.
“The announcement injects a new lease of life into Mauritania for which the industry lost its enthusiasm post the disappointing Chinguetti development,” Richard Griffith, a London-based analyst at Evolution Securities Ltd., wrote in an e-mailed report. “Tullow expects to extend its experience from the Cretaceous in the transform margin in Ghana to new exploration opportunities in Mauritania.”
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