In its latest update ahead of the Group’s Annual General Meeting, which was held at Tullow Oil plc, Building 9 Chiswick Park at 12pm on Thursday April 28, the oil giant said new Jubilee off-take procedures were being implemented with off-take and production to resume in the next few days.
The update said Group production guidance will be re-issued once new operating arrangements have stabilised.
Tullow said no material impact on future Group cash flow is currently expected due to continued production and appropriate insurance policies in place.
It also said Group working interest production for the first-quarter averaged 59,200 bopd for West Africa and 6,500 boepd for Europe.
This was marginally below expectations due to the need to implement new Jubilee off-take procedures at the end of March following damage to the Jubilee FPSO turret bearing.
The Group will announce its Trading Statement and Operational Update on 30 June 2016. Half-year results will be announced on 27 July 2016.
Tullow halted its flagship Jubilee field on March 20, after discovering a fault on a turret-bearing on the floating production, storage and offloading (FPSO) vessel.
Turrets moored to the seabed have bearings allowing the FPSO to rotate.
“Different options are available” for fixing the fault, including making repairs on-site, petroleum minister Emmanuel Armah-Kofi Buah told Bloomberg two weeks ago.
“Moving the FPSO is the last option and not currently being considered.” Jubilee produced 102,600 barrels a day in 2015 and was expected to pump 101,000 a day this year, according to a company forecast in February. Tullow said on April 8 that it will re-issue production guidance and expects the field to resume output on or around April 23. The government, through Ghana National Petroleum, has a 13.64 per cent stake.
“The resumption of crude and gas production is very critical to us,” Mr Armah-Kofi Buah said. “We are working on all the safety protocols with Tullow before production resumes.”
One month of production shutdown at Jubilee reduces full-year guidance by 3,100 barrels a day and operating cash flow by$30 million, before reimbursement from insurers, according to FirstEnergy Capital LLP. Tullow said April 8 that its insurance would cover the loss of output and revenue.
“The level of repairs will depend on the gravity,” Stephane Foucaud, an analyst at FirstEnergy in London, said by e-mail to Bloomberg.
“If it is relatively minor, it could be performed offshore. For something a bit more extensive, they would probably need to bring it back onshore.”
James Hosie, an analyst at Barclays, also told Bloomberg Tullow’s options include installing a replacement bearing offshore or bringing the FPSO to a shipyard for repairs.