Tullow Oil and Shell in exploration deal

TULLOW Oil yesterday announced a partnership with Royal Dutch Shell to explore parts of the Atlantic which have yet to be tapped to their full potential.

It said the deal would involve “new frontier exploration in select basins and geological plays around the Atlantic Basin”.

The deal follows the two companies’ exploration venture in 2009 in French Guiana, which led to a significant discovery last year.

Tullow said in a statement: “This partnership combines the knowledge base and specialist capabilities of both companies to allow more effective development in areas of mutual interest.”

Meanwhile the firm issued a production forecast of between 78,000 and 86,000 barrels of oil equivalent per day (boepd) for 2012 which undershot analysts’ forecasts.

Citigroup said it had forecast 96,000 boepd.

The FTSE 100-listed company was one of the biggest fallers on the index in early trading yesterday as investors gave the trading update a cool reaction. However, Tullow chief executive Aidan Heavey said he expected “significant progress” in its Ghana and Uganda operations this year.

He added: “We have an exciting exploration programme to open new basins, both onshore and offshore, and we hope to extend our reach in Africa and elsewhere along the Atlantic Margins with major new partnerships.”

Heavey said that 2011 had seen record revenues and cash flows from increased production and strong commodity prices, as well as exploration success.