Tullow profits up as it nears Uganda deal

Kasmira Jefford
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TULLOW OIL said it was near to sealing a long-awaited $2.9bn (£1.77bn) deal in Uganda by September as it posted soaring first half profits and doubled its dividend.

The Africa-focused oil-explorer has been waiting since last year to finalise a deal to bring in new partners French oil major Total and CNOOC of China to start developing Uganda’s oil reserves in the Lake Albert basin.

Pre-tax profits almost quadrupled to $540m in the six months to 30 June compared to the previous year thanks to a ramp up in production at its Jubilee field in Ghana and higher oil prices.

Jubilee, which is Ghana’s biggest oil field, is expected to pump 105,000 barrels a day in October, up from about 85,000 barrels a day now, boosting cashflows, the company said in a statement.

“Tullow has been very successful in finding oil over the last three to four years and now started to bring that oil on production. It really is the first stage in bringing these major fields on stream,” chief executive Aidan Heavey said in a news conference yesterday.

The oil explorer announced plans to invest at least $4bn with partners Anadarko Petroleum and Kosmos Energy to develop new oil fields off Ghana’s Atlantic coast.

Tullow lowered its guidance for full-year oil production to between 82,000 barrels per day (bpd) to 84,000 bpd from a forecast of 90,000 bpd to 94,000 given in July, due to rig delays at Jubilee but expects to exit the year at around 100,000 bpd.

Tullow shares closed up 8.4 per cent yesterday.