Tullow Oil to restart production from TEN following TLOS ruling

Tullow Oil will begin drilling at its TEN fields offshore Ghana following a favourable ruling by the Special Chamber of the International Tribunal of the Law of the Sea at the weekend.

On 23 September, the international arbitrator of maritime disputes handed down a ruling on the ocean boundary between Ghana and Ivory Coast, which Tullow said did not impact the TEN fields.

Hence, management said it would restart drilling towards the end of the year, targeting production from the fields of 80,000 barrels of oil per day, as per the design capacity of its floating production, storage and offloading vessel.

The company would now also move ahead on the additional drilling necessary for the field to reach its full potential, adding that the fields had performed well throughout the moratorium.

In a statement, Tullow chief Paul McDade said: "Tullow looks forward to continuing to work constructively with the Governments of both Ghana and Côte d’Ivoire following the conclusion of this process. While the TEN fields have performed well during the period of the drilling moratorium, we can now restart work on the additional drilling planned as part of the TEN fields’ plan of development and take the fields towards their full potential."

"Assuming the ruling is favourable, TLW should be able to position itself for operational momentum into 2018 with further development of TEN. This will then be followed by resumed exploration drilling, targeting the Araku prospect in Suriname, which we carry at 5p/32p risked/unrisked per share net to TLW in our NAV. This should be one of the most attractive exploration prospects of 2017 for the sector," said analysts at Credit Suisse in a research report dated 19 September.

"TLW is currently pricing in a long-term oil price of $52/bbl, one of the most conservative among peers."