UK-based Tullow Oil said last week that strong operational performance in the first half of the year and transformational debt refinancing have put the company on a firm footing to deliver its business plan, even as it looks to limit its capital exposure in Guyana and bring in partners.
Tullow said 2021 is a transition year for the company as the Group begins to deliver the 10-year business plan presented at its Capital Markets Day last November. It said much has been achieved in the first half of the year and while the start of drilling in Ghana is one of the most tangible examples, the Group has also maintained cost discipline, allocated capital carefully to accelerate high-return projects such as Simba in Gabon and recently submitted a revised draft development plan for Kenya, the culmination of over a year’s in-depth work.
Regarding exploration activities, Tullow said it continues to focus on unlocking value from the substantial prospective resource base in the emerging basins of Guyana and Argentina, while seeking to mitigate capital exposure from historical work commitments of c.$50 million in 2022, through farm-downs.
“These include the Beebei-Potaro exploration well on the Kanuku Block in Guyana which will target the prolific Cretaceous light oil play of the Guyana-Suriname Basin, as well as a seismic acquisition over Block MLO 122 in Argentina,” Tullow said.
Chief Executive Officer Rahul Dhir told Reuters the company is looking to bring in partners and reduce its exposure in Guyana where it is the operator of the Orinduik block and holds a 37.5% stake in the Kanuku block.
“Tullow is just taking a step back. The overall strategy is to allocate more capital to our core production assets, so what we are looking to do in Guyana for instance is to bring in partners and reduce our capital exposures,” Dhir said.
Earlier this year, the Guyana government granted an extension to the term of the Orinduik license that will see the block partners maintain control of the acreage until 2023.
Tullow has made a total of three discoveries in Guyana – Carapa-1 at the Kanuku block and Joe and Jethro on the Orinduik block.
“Carapa is not commercial in itself but it is an important technical discovery,” George Cazenove, Head of Communications at Tullow Oil had told OilNOW. He also pointed out that Joe and Jethro contain heavy oil and has high levels of sulphur.
The company said towards the end of last year that it is still processing data from the Joe and Jethro discoveries.