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INTERVIEW-UPDATE 2-Tullow Oil sees first Jubilee oil in H2 2010

Published 07/07/2009, 11:44 AM
TLW
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* Tullow sees vast acquisition opportunities in Africa

* Sees 2010 capital spending at over $1 bln (Adds details, definition of commercial reserves)

By Wendell Roelf

CAPE TOWN, July 7 (Reuters) - Tullow Oil is in "feisty" negotiations with Ghana on the licence to operate the Jubilee oil field but still expects production to start in the second half of next year, it said on Tuesday.

Tullow, Europe's largest independent oil explorer by market value, has said in the past that the Jubilee field in Ghana has a resource potential of up to 1.8 billion barrels.

"My judgement is... that common sense will prevail and that we will have all the approvals necessary for further development within the hours if not the days ahead," Tim O'Hanlon, vice president for the company's African business, told Reuters in an interview.

"If I was to make a prediction, I would say that we are on track for production from Jubilee during the second half of the calendar year 2010."

The field, operated by Tullow Oil in partnership with private equity-backed Kosmos Energy and Ghana's GNPC, is scheduled to start pumping at a rate of around 120,000 barrels per day (bpd), rising to around 250,000 within two years.

O'Hanlon said Tullow was looking out for more acquisitions in Africa, where it saw vast opportunities to buy assets.

"Company acquisitions or portfolio acquisitions is always something that Tullow has been good at and there is no doubt we are on the look out for opportunities in that domain as well," he said.

He said the company was looking across all parts of the continent, and across all segments of the oil sector.

"The opportunity pool is rich at the moment for companies with a geographical focus on Africa like us, and with the resources to make quick decisions, be they corporate acquisitions or quick decisions on the exploration front," he said.

He also said he expects capital expenditure next year to surpass $1 billion.

"If you continue the (company's expenditure) trend we should be well over a $1 billion in 2010," he said.

"We have reached a critical mass of reserves in Uganda to even pay for a pipeline to the Indian Ocean coast, which is a massive multi-billion dollar investment," he said.

He said he expects commercial reserves to double by 2011 after recent exploration successes in Uganda and Ghana, although he declined to give specific figures.

He defined these as oil reserves that are deemed to be commercial, so that they are developed or due to be developed.

"We are confident to make those statements that we will be doubling our reserves, but it will be caused by events in Ghana and Uganda." (Reporting by Wendell Roelf, writing by Agnieszka Flak, editing by Anthony Barker)

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