The Executive Vice President and Managing Director of Tullow Ghana, Kweku Awotwi, says the company’s decision to revise its production target by about 30 percent is a result of challenges regarding the reinjection of gas into its wells at the Jubilee Fields.
“In Jubilee, one of the most important reasons for why we did not meet the target we set of about 170,000 barrels of oil per day is that we had a significantly reduced offtake of gas by Ghana Gas and that meant that we had to re-inject significant volumes of gas back into the reservoir,” Mr. Awotwi told journalists in Accra.
“The lack of demand for Jubilee gas is due to the Sankofa gas taking priority. If less Sankofa gas is offered and GNPC nominates more of Jubilee’s gas, the current plant capacity could max out”, Mr. Awowti stated.
According to him, discussions on increasing gas offtake by the government are ongoing.
The company also encountered difficulties at its Tweneboah-Enyerra-Ntomme (TEB) fields.
He stated that there was a challenge regarding one of its wells at Enyerra which had to be suspended leading to a cut down in the overall production target of the TEN fields.
The inability of Tullow to meet its production target has seen the resignation of Chief Executive Officer, Paul McDade, while dividends have been suspended in favour of capital investment.
The shares of Tullow Oil Plc on the London Stock Exchange plummeted by more than 50 percent on Monday as news of CEO, Paul Mcdade’s resignation over disappointing performance in its Ghana operations was announced.
The share price is beginning to creep up as calm returns to Tullow.
Tullow Oil which is the lead partner of the Jubilee and TEN fields could not meet its production targets due to technical problems at Jubilee as well as a delay in the completion of a well at the TEN fields.
Tullow has faced challenges in recent months to its plans to develop oil fields in Uganda and Guyana.
Owing to its challenges, the company announced a revision to its key production figures stating that oil production is expected to hover around 87,000 barrels of oil per day (bopd) this year, while lower production in 2020 of between 70,000 and 80,000 (bopd), as it undertook a review of its production performance issues.
The Africa-focused oil firm also suspended its dividend as it aimed to generate more cash to support future investment plans and current explorations.