Tullow Oil Plc, a U.K. explorer with most of its licenses in Africa, said its TEN fields off Ghana have a greater proportion of crude than previously estimated.
The Tweneboa, Enyenra and Ntomme fields may be 70 percent crude, the London-based company said today in a statement. They may contain 360 million barrels of oil equivalent, it said.
“Initially we thought that area might be quite gassy, but actually the appraisal program has shown it to be predominantly oil,” Chief Operating Officer Paul McDade said by telephone. “We are targeting sanction of the project towards year-end.”
Tullow has extended exploration in Ghana after starting to pump oil from its Jubilee field in 2010. The country, West Africa’s biggest economy after Nigeria, has lured other international companies including Italy’s Eni SpA as aging deposits elsewhere are depleted.
The total resource estimate at TEN is lower than Tullow’s original forecast, Morgan Stanley said in a report. Tullow may also face delays in state project approval following the death of President John Atta Mills yesterday, Morgan Stanley said.
Tullow fell 6.3 percent to 1,284 pence in London, the lowest price since Nov. 25.
Tullow last year estimated the TEN fields would require at least $4 billion in investment to produce as much as 125,000 barrels of oil a day. The company and its partners, including Anadarko Petroleum Corp. and Kosmos Energy Ltd., are holding tenders for contractors to help develop the deposits.
Oil-service costs have risen as exploration companies expand the search for crude and venture into harder-to-reach areas.
“We are in a tight market and we certainly see the tightness of the market as we go through the tender process,” McDade said, declining to disclose the latest cost estimate at the TEN fields.
Tullow also operates in Uganda, where it expects to invest $8 billion to $12 billion in oilfield development with partners Total SA and Cnooc Ltd., it said today. That’s in line with a previous forecast of about $10 billion. An export pipeline will cost an estimated $2.5 billion to $5 billion depending on the route, which may cross neighboring Kenya, it said.
In Kenya, Tullow plans to relinquish some exploration licenses in a “low prospective area” where oil resources are less likely, Exploration Director Angus McCoss said today in a phone interview. “There is a continuous discussion ongoing with the government on how we manage our acreage,” he said.
Tullow’s first-half net income rose 63 percent to $567 million as sales reached $1.2 billion, it said in today’s statement.
At Ghana’s Jubilee field, Tullow expects to start gas supplies to Ghana National Gas Co. next year after local pipelines are built, McDade said.
“They are making some progress within Ghana,” he said. “In the meantime, we are taking the Jubilee gas and putting it back into the reservoir, effectively storing it.”
Separately, Tullow said it’s increasing interests in Blocks LB-16 and LB-17 in Liberia. The company is buying Anadarko’s stakes, Barclays Plc wrote in an e-mailed report.