Tullow Oil said its insurance covered the costs associated with loss to business operations at an oil field off the West African coast. Photo courtesy of Tullow Oil.
LONDON, Sept. 30 (UPI) -- Insurance will cover the loss of production and claims regarding the interruption of business at one of West Africa's biggest oil fields, Tullow Oil said.
Tullow, which has offices in London, said its insurance covers the interruption of business at the Jubilee oil field.
Tullow last year sent development plans for the offshore Jubilee field to the Ghanaian government. Earlier this year, 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. Insurance coverage already extends to cover the costs associated with the equipment failure.
"Cover includes production losses at the Jubilee field associated with the failure of the bearing and the downtime associated with for the work program to re-establish normal operations," the company said in its latest statement.
Oil and natural production continued after the equipment failure, but Tullow was forced to revise its operational procedures.
The company was forecasting a 2016 average production rate at Jubilee at around 101,000 barrels of oil equivalent per day. In its half-year financial report from July, the company said it expected production from Jubilee to come in at around 15 percent below initial expectations.
Tullow said it didn't expect the issue at Jubilee to have a material impact on revenue. It recorded 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 were offset by lower costs elsewhere in its portfolio.