Tullow Oil has announced plans to tighten expenditure next year, and it warned investors that it may make a series of writedowns, amid tumbling global oil prices.
The oil and gas producer said it will shift its focus away from exploration and towards maximising core assets. It will be looking at the potential of existing projects in East Africa and the review will focus mainly on French Guiana. Chief executive Aidan Heavey said:
Our overall exploration spend will be significantly reduced and will focus primarily on East Africa where we have major basin-opening potential
However Tullow said that this could dent future profits, as the company would need to make further writedowns.
While significant upside potential exists, if the Board decides not to allocate near-term capital to these areas, substantial non-cash exploration writedowns will be required for the full year
Tullow Oil was up 2.2 percent in early morning trading.