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Tullow to shut down FPSO for 12 weeks this year

  • SOURCE: | qwesa2big
  • 66e19567c25fe568a262e6307f80d14f_L (1)Full year 2016 gross production from the Jubilee field averaged 73,700 bopd (net: 26,200 bopd). Tullow has also received reimbursements for turret remediation costs and Jubilee production field losses in 2016 of approximately $8 million (net) under the Hull and Machinery insurance policy and approximately $72 million under Tullow’s corporate Business Interruption insurance cover which equates to 4,600 bopd of net equivalent production.

    The Jubilee turret remediation work is progressing as planned and the FPSO is expected to be spread-moored on its current heading by the end of January 2017. This will allow the tugs currently required to hold the vessel on a fixed heading to be removed, significantly reducing the complexity of the current operation. The capital costs associated with this and subsequent remediation works are expected to be covered by the Joint Venture Hull and Machinery insurance policy.

    The next phase of the project will involve modifications to the turret systems for long¬term spread-moored operations. In addition, the assessment of the optimum long¬term heading continues, in order to determine if a rotation of the FPSO is required. Detailed planning for this continues with the JV Partners and the Ghanaian Government, with final decisions and approvals being sought in the first half of 2017, with work expected to be carried out in the second half of 2017.

    It is anticipated that a facility shutdown of up to 12 weeks may be required during 2017. However, significant work is ongoing to look at ways to optimise and reduce any shutdown period. Tullow expects 2017 production from the Jubilee field to average 68,500 bopd (net: 24,300 bopd), assuming 12 weeks of shutdown associated with the next phase of remediation works.

    Tullow’s corporate Business Interruption insurance cover is expected to continue to payout in respect of lost production associated to the turret remediation works, and the equivalent average annualised net production is around 12,000 bopd, increasing Tullow’s effective net production to around 36,300 bopd in 2017. TEN Following first oil from TEN in August 2016, the oil production, gas compression/injection and water injection systems were commissioned and are now operational.

    In early January 2017, the capacity of the FPSO was successfully tested at an average rate of over 80,000 bopd during a 24 hour flow test. Gross annualised working interest production in 2016 averaged 14,600 bopd (net: 6,900 bopd), in line with latest guidance. Production testing and initial results from the 11 wells indicate reserves estimates for both Ntomme and Enyenra to be in line with previously guided expectations. However, due to some issues with managing pressures in the Enyenra reservoir and because no new wells can be drilled until after the ITLOS ruling later this year, Tullow plans to manage the existing wells in a prudent and sustainable manner.

    As a result, Tullow expects production from TEN to be around 50,000 bopd (net: 23,600bopd) in 2017, although work continues to consider ways to increase production in 2017. Gas production from the TEN fields is currently being re¬injected, with gas export expected to commence later in 2017. Proceedings at ITLOS, with regard to the maritime border dispute between Ghana and Côte d’Ivoire continue, with oral hearings expected 6-¬17 February 2017, and a final ruling anticipated in the fourth quarter of 2017.

    Non¬operated Portfolio

    2016 West Africa net non¬operated production was in line with expectations at 27,800 bopd. Lower oil prices have resulted in significantly lower levels of investment and 2017 net production is expected to be around 22,000 bopd. However, flexibility remains in the portfolio, with options to increase capital investment in 2017 and subsequent years to reduce the production decline in these mature assets. Full year gas production from Europe averaged 6,200 boepd in 2016, in line with expectations. Tullow expects 2017 European gas production to be around 6,500 boepd.


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