Oil and gas exploration and production company Tullow Oil has outlined its sharper and deeper focus on Africa, with upbeat outlooks for its projects in both West and East Africa.
Despite a shift to cleaner energy and alternative energy sources, Tullow Oil also believes there will be strong global demand for oil in the next 20 years.
“The world is transitioning in its energy requirements, but oil demand is going through 100-million barrels,” Tullow Oil New Ventures GM Robin Sutherland told delegates at the Future Energy Africa Oil and Gas conference, in Cape Town, this week.
“It’s projected to keep going until 2038. Why should we move out of the oil business when we see so much demand coming our way?”
He said the company would continue to invest in oil exploration.
“There is 40 years left in the oil industry for sure.
“Anything we recover over the next 15 years will see its life run out fruitfully,” added Sutherland.
While futurist Clem Sunter earlier told delegates at the conference that he expected the oil price to shoot over the $100/bl mark, Sutherland would not be drawn on a price estimate, but does expect some movement.
“Big fields like Liza, in South America, and Brazil producing massive amounts of oil will affect the balance. So will issues in the Mideast.”
Sutherland said the company had disposed of its assets in India and Pakistan and had shifted its focus to South America and Africa. It has 90 licences across 16 countries.
Tullow Oil has three core delivery teams in West Africa with “low-cost oil production making it cheaper as we go, making things more efficient”.
Tullow Oil first achieved oil in its TEN Field in Ghana in August 2016, and will continue to invest to increase production in its Jubilee field.
Sutherland pointed out that the company’s oil wells in West Africa were producing 89 100 bbl/d of oil in 2017, while production for 2018 is targeted at between 82 000 bbl/d and 90 000 bbl/d.
He added that Tullow Oil hoped to get its Ghana production up to 180 000 bbl/d by early 2019. It was bringing five new wells online over the next six months in Ghana and has achieved good results from its drilling programme.
It is estimated that there are 244-million barrels of resources that have not been developed in Ghana, with another 570-million barrels of upside potential.
The company has not been as fortunate in Namibia, where its drilling came to nought. However, Sutherland said the Namibian project had proved that its drilling costs were coming down. “Our cost estimate was for $65-million, but we drilled it for $30-million.”
Sutherland also spoke about challenges in local communities such as experienced in Kenya.
“At some stage, the community stopped our operations because, like the Niger Delta communities, they felt government was not giving them a fair share.
“We think we have done a good job with jobs and training. But politics play a part. There has to be investment in the area the oil is coming from.”
He said the company was sensitive when told about sensitive environmental locations, but it was often different in reality.
“We have gotten into areas which are protected forests or nature reserves and found that there is a palm oil or sugar cane plantation, and those areas aren’t actually being protected. We bring money and can help bring positive impact to rejuvenate the areas.”
Sutherland said significant oil discoveries in Kenya and Uganda showed future development potential, while new technology – Full Tensor Gravity Gradiometers (FTGs) had been very helpful in Zambia and Côte d’Ivoire.
He outlined several challenges for African oil and gas projects.
These included access to exploration acreage for credible exploration companies, unrealistic licence terms and the capacity of governments to supervise large-scale oil and gas projects.
He said oil companies are concerned about the effect of climate change on large-scale investor climate. Bribery and corruption and conflicts of interest in the supply chain remain a challenge, as do customs and value-added tax regimes.source: miningweekly.com