Tullow Oil confirms damage at Ghana field

Tullow Oil said there has been damage to the turret bearing on a floating production storage and offloading (FPSO) unit at its Jubilee field in Ghana, but the company does not expect this to have any significant impact on revenue.

The FTSE 250 group said oil production and gas export can continue but under revised operating and off-take procedures.

A root cause analysis is underway and a project team is assessing which long-term remediation option is most appropriate. Initial feasibility studies by the team have confirmed that the bearing issue can be fully resolved.

The FPSO unit in question has now been placed on heading control through the use of tugs which minimise vessel movement around the bearing. New operating procedures are being implemented to assure safe production and off-take operations.

Tullow estimates production from the FPSO will re-start in around two weeks’ time and will also take time to ramp-up. The company will re-issue its guidance once the new operating arrangements have stabilised.

The group had already signaled a potential problem at the field a couple of months ago, saying at the time that oil production and gas export would continue as normal.

Chief operating officer Paul McDade said: “We are focused on resolving this issue with the bearing on the FPSO Kwame Nkrumah in a timely and safe manner. We have appointed a highly experienced project team to work on a permanent solution while our operations team continues to ensure we have in place safe and sustainable arrangements for production from the field.

“Given the ability to continue production and because we have the appropriate insurance policies in place, we do not expect that this issue will have a material impact on our revenue."