Oil production scheme pushed to 2010
Mar 12, 2009
TULLOW Oil, the UK firm exploring for oil and gas in Uganda, is to produce its first oil in early 2010 after finding more resources in Lake Albert, Paul McDade, the chief operating officer, has said.
By Ibrahim Kasita
in Berlin, Germany
TULLOW Oil, the UK firm exploring for oil and gas in Uganda, is to produce its first oil in early 2010 after finding more resources in Lake Albert, Paul McDade, the chief operating officer, has said.
McDade said Tullow also plans to export crude through Kenya in about five years.
He said daily output would start at about 500 barrels per day (bpd) and be limited to 2,000 bpd or “a bit more†for the first three years.
McDade said the output would rise to 20,000 bpd in three to five years and reach 100,000 to 150,000 bpd within 10 years.
“Production will be low-cost and efficient,†McDade reportedly said, adding: “We don’t anticipate any significant capital development this year.â€
The development follows the firm’s announcement that net profits rose by 330% to $312.4m (about sh681.5b) in 2008 due to field sales and a rise in oil and gas prices. However, there was a 9% drop in production.
Also, Tullow can borrow up to $2b, an arrangement that highlights the strength of its assets and credit worthiness. The ability to borrow the $2b, that will replace existing debts and provide future capital commitments, positions the firm to continue pursuing its investment plans.
In a financial year statement released on Wednesday, Tullow said it would proceed with the Ugandan project since it had exceeded the “commercial threshold for development†and boost resources to about 600 million barrels of oil.
McDade said the firm and the Government were still discussing plans to build the first refinery to use the early production crude to make fuel for the local market.
He said further expansion of the project would require a “major export scheme†after five years.
“It’s important for Uganda and the local region that we can take the hydrocarbon product to their market,†McDade observed.
Tullow’s chief executive officer Aidan Heavey said Tullow may sell part of its fully-owned Block 2 to share costs in Uganda and may invite a partner to build a pipeline to export oil from Uganda to Mombasa.
McDade declined to comment on the proposed refinery’s capacity and required investment in the Ugandan project.
Recently, The New Vision reported that the early oil production scheme would not kick off this year because Tullow and the Government were still engaged in negotiations over crude pricing, the cost of the refinery and tender process.
The company continues negotiations with the Democratic Republic of Congo about exploration of two blocks on its side of the border that divides Lake Albert, Heavey said.
in Berlin, Germany
TULLOW Oil, the UK firm exploring for oil and gas in Uganda, is to produce its first oil in early 2010 after finding more resources in Lake Albert, Paul McDade, the chief operating officer, has said.
McDade said Tullow also plans to export crude through Kenya in about five years.
He said daily output would start at about 500 barrels per day (bpd) and be limited to 2,000 bpd or “a bit more†for the first three years.
McDade said the output would rise to 20,000 bpd in three to five years and reach 100,000 to 150,000 bpd within 10 years.
“Production will be low-cost and efficient,†McDade reportedly said, adding: “We don’t anticipate any significant capital development this year.â€
The development follows the firm’s announcement that net profits rose by 330% to $312.4m (about sh681.5b) in 2008 due to field sales and a rise in oil and gas prices. However, there was a 9% drop in production.
Also, Tullow can borrow up to $2b, an arrangement that highlights the strength of its assets and credit worthiness. The ability to borrow the $2b, that will replace existing debts and provide future capital commitments, positions the firm to continue pursuing its investment plans.
In a financial year statement released on Wednesday, Tullow said it would proceed with the Ugandan project since it had exceeded the “commercial threshold for development†and boost resources to about 600 million barrels of oil.
McDade said the firm and the Government were still discussing plans to build the first refinery to use the early production crude to make fuel for the local market.
He said further expansion of the project would require a “major export scheme†after five years.
“It’s important for Uganda and the local region that we can take the hydrocarbon product to their market,†McDade observed.
Tullow’s chief executive officer Aidan Heavey said Tullow may sell part of its fully-owned Block 2 to share costs in Uganda and may invite a partner to build a pipeline to export oil from Uganda to Mombasa.
McDade declined to comment on the proposed refinery’s capacity and required investment in the Ugandan project.
Recently, The New Vision reported that the early oil production scheme would not kick off this year because Tullow and the Government were still engaged in negotiations over crude pricing, the cost of the refinery and tender process.
The company continues negotiations with the Democratic Republic of Congo about exploration of two blocks on its side of the border that divides Lake Albert, Heavey said.