Oil and gas exploration and production company, Tullow Oil plc has assured its shareholders in Ghana of the resumption of dividend payments early next year following its recovery from external market volatilities.
Tullow said it had laid a strong foundation, which is set to afford shareholders brighter prospects after the downturn from the sustained oil price slump.
Chief Executive Officer (CEO) of Tullow, Mr Aidan Heavey made the remarks in response to concerns from shareholders over the non-payment of dividends at the company’s fifth annual investor forum in Accra last Wednesday.
The forum was to present the company’s performance in the past year and outlook for the year ahead to its shareholders in Ghana.
Shareholders have for two years seen their dividends suspended while some staff of the oil company have been rendered redundant.
“As shareholders, what we need is our dividends; you can’t wait for a turnaround in the market before you pay shareholder dividends,” a shareholder demanded.
Mr Heavey justified the suspension of dividends, explaining it was part of the company’s re-structuring and cost-cutting exercise.
He however promised shareholders good dividends early next year.
According to him, the sharp reduction in oil prices, which started in mid 2014, worsened in the course of 2015, with a peak reduction in prices by about 75 per cent.
“2015 was a very challenging year for Tullow and the entire oil and gas industry, but due to the early and decisive actions we took in late 2014, we have successfully restructured and reset Tullow’s business for a potentially sustained period of relatively low oil prices,” he explained.
The company also allayed fears that exploration activities in Ghana will be affected by cuts in its expenditure for this year.
Tullow had announced that it was reducing its expenditure for capital projects by another $100 million, out of the about $1 billion allocated for this year.
This raised some concerns that the country will, this time, be affected by these reductions after it was excused in previous expenditure cuts.
Oil production in Ghana has recently suffered some setbacks because of challenges with the vessel, the FPSO, used in processing, collecting and storing crude oil from the Jubilee field.
This has led to calls for the vessel to be speedily replaced to avoid a complete breakdown in the future.
The call recently gained some credence following reports that the Jubilee partners were planning to build a new FPSO.
But Mr Heavey said there were no such plans on the company’s table.