Tullow oil Strategy and 2012 operational highlights
We made good strategic and operational progress in 2012. Highlights include opening a new basin in Kenya, putting production growth back on track with the successful remediation of the Jubilee field in Ghana, growing reserves and resources and adding five new countries to our global portfolio of assets.
EXPLORATION & APPRAISAL SUCCESS RATIO
Exploration and Appraisal (E&A) success continued in 2012, including a significant exploration result onshore Kenya, the fourth new oil basin discovered by Tullow. This discovery occurred in one of the many basins in our Kenya-Ethiopia acreage. A further oil discovery was made there during 2012 in an ongoing exploration campaign. Despite some inevitable dry holes in a very active drilling programme, overall we achieved a 74% E&A success ratio, where 34 wells out of 46 found hydrocarbons.
2013 E&A PROGRAMME
In 2013, we have over 40 candidate wells in our high-impact E&A programme, representing an investment of almost $1 billion. The net risked mean volumes being targeted total around one billion barrels of oil equivalent. Activities consist of up to 13 wells in Kenya and Ethiopia, including high-risk wildcats, a testing programme on existing discoveries and follow-on drilling operations. Significant activity is also planned in Uganda and the second well in the four-well programme in French Guiana, South America, has already commenced.
Tullow’s global portfolio increased in 2012, with over 30 licences added in five new countries – Guinea, Mozambique, Uruguay, Greenland and Norway. This is part of an ongoing process to enhance our focus on light oil in highly prospective areas in Africa and the Atlantic Margins. In particular, New Venture activities aim to secure a high-impact exploration programme for the medium-term in areas and geologies we know best.
COMMERCIAL RESERVES & CONTINGENT RESOURCES
Tullow has enhanced both commercial reserves and contingent resources during 2012. Commercial reserves increased to 388 mmboe and contingent resources have been enhanced by the inclusion of new resources following initial discoveries in Kenya and Côte d’Ivoire and increased resources due to appraisal success in Uganda. Resources growth is an important aspect of high grading the Group’s portfolio. In 2012, Tullow achieved a 358% replacement ratio and our Group reserves and resources amount to 1,203 mmboe.
In 2012 we introduced a new scorecard tracking nine EHS corporate Key Performance Indicators (KPIs) across the business. The indicators provide a more complete view of our overall EHS performance and are more aligned to Tullow’s proactive approach to EHS. The scorecard has three ‘lagging’ indicators to demonstrate our performance against quantitative targets, and six ‘leading’ indicators that focus on activities that will deliver improved performance in targeted areas. In 2012, Tullow scored 22 out of a total possible 27 points.
YEAR-END JUBILEE FIELD PRODUCTION
During the year the Jubilee field was successfully and cost effectively remediated and production continues to increase following successful acid stimulations and the start-up of Jubilee Phase 1A wells. Jubilee production at the end of the 2012 was 110,000 bopd. Group 2012 working interest production remained strong, despite a slight shortfall due to the enforced shutdown of non-operated third party UK interests. 2013 working interest production is forecast to be between 86,000 and 92,000 boepd.
See full financial report on http://www.tullowoil.com/files/reports/ar2012/files/pdf/annual_report_2012.pdf
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