Uganda uncertainty mars Tullow results

Marion Dakers
OIL explorer Tullow Oil posted a 361 per cent rise in pre-tax profit yesterday after a “transformational year”, though its shares fell 3.2 per cent due to concerns about its Ugandan project and some missed forecasts.

The firm said its pre-tax profit for the year was $152m (£93.8m) for the year, short of consensus estimates of $192m, which was blamed on higher than expected write-offs and administrative costs.

Surging oil prices caused a 19 per cent rise in revenue to $1.9bn, while production was broadly flat at 58,100 barrels of oil per day.

Investors were hoping for an update on Tullow’s $10bn Ugandan joint venture with Total and CNOOC, which has been awaiting government approval for close to a year.

Tullow did not give new details on the partnership, but chief executive Aidan Heavey later told reporters: “We’re at the stage now where all the main points have been agreed so we’re just finalising the documentation.”

Heavey said in a statement that 2010 “was undoubtedly a transformational year for Tullow” and that production could rise to up to 92,000 barrels per day this year.

The company said it expects its new Ghanaian wells to reach a rate of 120,000 barrels per day within five months, with a local stock listing also in the pipeline. The Jubilee field is the site of Ghana’s first commercial oil production and is 34.7 per cent owned by Tullow.

But the firm said it has given up on two oil blocks in the Democratic Republic of Congo, which it lost last June when the government re-awarded the exploration rights.