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21.11.2008 Business & Finance

More Oil Found

By Daily Guide
More Oil Found

Tullow Oil Plc, the United Kingdom-based oil explorer and Interoil Exploration & Production ASA, has found oil and natural gas at Ghana's Tano Block, boosting prospects for oil recovery at the nearby Tweneboa field.

The Ebony-1 Shallow-water Well found a four-metre (13-foot) layer of oil at a depth of 2,053 metres and a two-metre layer of gas condensates at 2,570 meters, Lysaker, Norway-based Interoil said yesterday in a statement.

However, no official of the Ministry of Energy was ready to comment on the latest oil find which is put at conservatively 800 million barrels a day, pushing Ghana's oil to one billion barrels a day.

The deeper gas condensate layer may be linked to the deep-water Tweneboa oil deposit, a big prospect that Tullow plans to drill in January, said Ian Springett, Chief Financial Officer of the London-based company.

“The gas condensate has very high pressure at the bottom of the well, where it's definitely worth a lot of money,'' Springett said, adding that the top oil layer may not be commercially viable.

Tullow plans to invest about $3.2 billion to develop the nearby Jubilee Field and produce the first oil there in 2010. The company is targeting about 4 billion barrels of oil and gas resources in the Gulf of Guinea, offshore Ghana and Ivory Coast.

It intends to supply the first gas from Jubilee to Ghana in 2011.

Tullow is working with the Ghana National Petroleum Corporation (GNPC) on Jubilee's gas development plan, Springett said.

“Any of the gas found in the area will be very beneficial to that plan.”

The Ebony-1 discovery “has improved the chance of success at Tweneboa from around 30 percent to around 40 percent”, Exploration Director Angus McCoss said yesterday in a phone interview with Bloomberg.

Tullow targets as much as 800 million barrels of oil resources at Tweneboa and will announce drilling results in March, he said.

Tullow fell as much as 4.2 percent to 424.75 pence in London trading and was at 440 pence as of 12:50 p.m. London time.

The stock earlier climbed as much as 1.2 percent.

“While activity from a Tullow perspective in the shallow- water Tano licence ranks secondary to drilling around Jubilee, the result is nevertheless positive in that it opens up the prospect of further exploration in the shallow-water area,'' Gerry Hennigan, an analyst with Goodbody Stockbrokers in Dublin, said in a report yesterday.

Tullow, the operator of the Tano licence, and Interoil each hold a 31.5 percent interest in the field. The other partners are Thani Ghana, Sabre Oil and Ghana National Petroleum Corporation.

“The potential volumes associated with this discovery will be subject to an ongoing evaluation and further appraisal drilling will be discussed with our licence partners,” Interoil Chief Executive Officer Nils Trulsvik said in the statement.

Bloomberg

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