Boost for Tullow Oil in chase for high-return production assets in Africa

Africa-focused independent Tullow Oil has received approval from Gabon's government for the extension of several of its licences until 2046, which boosts its resource base in the country.

Tullow on Wednesday confirmed the licence extensions increase the value of its resource base through the addition of around 5 million barrels of net 2P — proven and probable — reserves that will deliver approximately 100% 2P reserves replacement in Gabon this year.

“This activity is in line with the group’s strategy to focus on its high-return production assets in Africa and unlock value through optimisation of its non-operated portfolio,” said the London and Ghana-listed upstream independent.

“The extensions reflect the future potential of the reserves and resources across the Gabonese assets and the longevity of the Tchatamba facilities as a core hub for Tullow.”

Tullow and privately owned Perenco in April signed an asset swap deal covering oil and gas fields in Gabon, which is intended to optimise Tullow’s equity ownership across key fields in the country.

Under the deal, which is expected to close later this year, Tullow will hand over to Perenco its entire stakes of 40%, 27.5%, 24.3% and 10% respectively in the Limande, Turnix, Moba and Oba assets and a 17.5% holding in the Simba field in which it will retain 40%.

In return, Tullow's interest in the Tchatamba and DE8 assets will both increase to 40% after securing 15% and 20% interest, respectively, from the French independent.

This deal, Tullow said, at the time, would see Tchatamba become a key hub for the company around which it can develop existing satellite fields and explore for future tie-back opportunities.

Plans are already being eyed to develop the Wamba, D8 and Simba discoveries via Tchatamba's facilities.

The company's production in Gabon comes from a portfolio of more than 20 non-operated onshore and offshore fields. Tullow on its website states the West African nation is an important contributor to its non-operated production, with 2022 net output of around 14,900 barrels per day of oil.

The company's expected production in Gabon for 2023 remains unchanged at 13,000 barrels of oil equivalent per day