Tullow Oil Zumba exploration well in Norway to be plugged

Oil & gas exploration group Tullow Oil said late on Monday that it did not encounter any hydrocarbons in the Zumba exploration well in the Norwegian Sea, which will now be plugged and abandoned.

The primary objective of the well was to prove hydrocarbons in the Upper Jurassic Rogn Formation with a secondary target in the Mid-Jurassic Garn Formation of the Fangst Group.

However, the well found no reservoir development in the Rogn Formation and, while the Garn Formation had good reservoir quality, no hydrocarbons were present in either target, said Tullow.

RBC Capital Markets said that as a source of potentially significant upside, the news is disappointing.

“The Norwegian taxman will bear most of the financial burden, but as Tullow cuts back its annual exploration budget and trims its workforce, questions are likely to be asked about the sustainability of its Norwegian operation,” said RBC.

Tullow Oil shares closed up 1.2% at 365.70p on Monday.