Tullow swings to FY profit; warns on no-deal Brexit

Tullow Oil on Wednesday reported a return to profitability as it warned that a no-deal Brexit could cause uncertainties on its North Sea decommissioning programme.

The Africa and South America-focused producer recorded a pre-tax profit of $261m compared with a loss of $286m a year earlier due to higher oil prices. Net profit was $85m from a loss of $175m.

Revenue rose 7.9% to $1.86bn as impairments fell to $18m, compared with $539m a year earlier.

A final dividend of 4.8c per share was declared.

The company said that it did not expect a material hit from Brexit to its business, assets and operations, but did express concerns over the impact on staffing.

“Tullow employs a number of EU nationals in the UK and the board is concerned about the uncertainty that a No Deal Brexit would cause these much-valued members of staff,” the company said.

“To help address this concern, Tullow has established a Brexit Focus Group to share information with affected employees and ensure they are up to date with the latest developments.”

“The board also recognises that a no-deal Brexit could cause significant regulatory, legal and financial uncertainty with regard to our decommissioning programme in the UK North Sea.”

Tullow said it operators would have to be “carefully guided” by the government “as to exactly how decommissioning programmes should be executed and what tariffs or fees, if any, should be applied to non-UK service providers”.