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Oil company Tullow turns a profit

Corner turned and company now expects major oil developments by early August.

By Daniel J. Graeber
Oil company Tullow turns a profit
Financially speaking, Tullow Oil said it has turned the corner and expects new oil production from its West African portfolio by early August. Photo courtesy of Tullow Oil

LONDON, July 27 (UPI) -- While reporting a profit from its base in London, oil and gas explorer Tullow Oil said Wednesday oil from one of its major investments is expected next month.

The company said it was able to record a $30 million profit for the first half of 2016, following a loss last year of $68 million, noting pressure from lower crude oil prices and reduced output from its Jubilee oil field off the coast of Ghana were offset by lower costs elsewhere in its portfolio.

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For Jubilee, operations were restricted last year by technical issues at a gas compression system and the company in early April 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.

Three years ago, Tullow started development of the Tweneboa Enyenra Ntomme, or TEN field, off the coast of Ghana and now expects production to peak at about 80,000 barrels of oil per day. The company said Wednesday the project is on pace to start production next month.

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"The start of production from the TEN field in early August will be transformational, allowing us to significantly increase our net production and begin the process of deleveraging our balance sheet," Chief Executive Aidan Heavey said in a statement.

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Production for the year should average about a quarter of the peak capacity. Any natural gas associated with the field, meanwhile, could be exported within the next two years, though Tullow said it could get gas out early if new export facilities come online by the end of this year.

The company cautioned, however, that drilling in the TEN field may stand still because of border disputes between the governments of Ghana and Ivory Coast. A tribunal is reviewing the maritime boundaries, with a decision expected in late 2017. Nevertheless, Tullow said the difficult part of the field's development was in the past.

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"Tullow is therefore well placed to move forward with a restructured and more efficient business that can deliver growth from its portfolio of high quality, low cost producing, development and exploration assets," Heavey said.

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