Tullow Oil’s past exploration fame sputters out with Guyana flop

The firm is now focusing on assets in West Africa, where the company has increased its stake in its flagship Jubilee field off Ghana.

 
Rahul Dhir (pictured) took the helm in 2020 following a disastrous year for the company that saw its production outlook slashed, its dividend suspended and its CEO resign.

 
FRI, 05 AUG, 2022 - 

Irish-founded Tullow Oil, which once thrilled shareholders with big-ticket discoveries in Africa, has seen its reputation for frontier finds fizzle out with a final well off Guyana proving a dud.

The Beebei-Potaro well hit water, and has been plugged and abandoned, the company said yesterday. That caps a string of failures for Tullow in the Guyana-Suriname basin, vindicating Chief Executive Officer Rahul Dhir’s decision to shift the firm away from risky exploration and concentrate on producing fields.

Dhir took the helm in 2020 following a disastrous year for the company that saw its production outlook slashed, its dividend suspended and its CEO resign. Tullow’s credibility as a successful explorer had started to crumble as it questioned the commercial viability of discoveries in Guyana, while a key well off neighboring Suriname subsequently also proved to be a duster.

The Beebei-Potaro well in the Kanuku license, drilled to a depth of more than 14,000 feet, had been the firm’s one potentially high-impact well this year.

“It may be likely that it’s the last well of the Guyana-Suriname basin, or even just from a frontier/high-impact nature for Tullow," said Will Hares, a global energy analyst at Bloomberg Intelligence. “Exploration has become peripheral in the strategy to lower risk” at the company.

Tullow spokesman George Cazenove confirmed that the firm has fulfilled its well obligations at the Kanuku license, which expires in 2023, and said the company is “working on next steps” with its partners.

Repsol is the operator of the Kanuku permit, with a 37.5% working interest. Tullow also owns 37.5%, with TOQAP - a venture between TotalEnergies and Qatar Petroleum - holding the remainder.

Dhir is now focusing on assets in West Africa, where the company has increased its stake in its flagship Jubilee field off Ghana.

The firm is also hunting for a partner for its Kenya project and working to push through a takeover of Capricorn Energy Plc - a deal that would boost its African resources and open up opportunities for expansion across the continent.