Setback for Tullow for operations offshore Ghana

LONDON, April 8 (UPI) -- Africa-focused Tullow Oil said it had mechanical issues at a production facility tied to the giant Jubilee oil field offshore Ghana that could curb output.

The company said part of the so-called Kwame Nkrumah floating production storage and offloading facility positioned off the Ghanaian coast was damaged and no longer functioning as designed. Oil and natural production can still continue, but Tullow said it would have to revise its operational procedures.

In December, Tullow, which has headquarters in London, sent its full development plans to the Ghanaian government for the offshore Jubilee field, which the company said could help drive the production figures for this year.

The company was forecasting a 2016 average production rate at Jubilee at around 101,000 barrels of oil equivalent per day. The company said it expected operations at the field would start returning to normal in about two weeks and that it would reissue a production estimate once work was stabilized.

Paul McDade, the company's chief operating officer, said claims were sent to insurers while the company worked to resolve the issue in a safe and timely fashion.

"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," he said in a statement.

The company plans to spend about $900 million this year, about 19 percent less than previously expected. Spending last year amounted to $1.7 billion.

Tullow in February said revenues were down 27 percent for the year.