Tullow Faces Liquidity Pressures Amid $40m Government Debt, Production Decline
Tullow Oil has flagged a $40 million debt owed by the Government of Ghana for gas supplied from the Jubilee and TEN fields, describing the amount as “overdue gas payments” in its November trading update.
The company emphasized that clearing the arrears would significantly strengthen its financial position, helping to ease liquidity constraints as it navigates operational challenges.
Jubilee Output Declines Amid Operational Setbacks
Meanwhile, production from the Jubilee oil field dipped to 89,000 barrels per day (bpd) in October, a slight decrease from 90,000 bpd in July.
Tullow attributed the underperformance to multiple operational challenges, including underproduction at the J69-P well, unplanned downtime at the Ghana Gas Company’s onshore processing plant, and power-related disruptions to water injection.
“The end of October update fell below expectation primarily due to underperformance of the J69-P Well as flagged previously,” the company stated.
Recovery Measures in Progress
Despite the setback, Tullow expressed optimism about stabilizing output, citing corrective actions already underway. These measures, coupled with production optimization efforts, are expected to offset the declines observed in the latter half of 2024.
“These measures are expected to mitigate the declines experienced in the second half of 2024,” Tullow noted, while highlighting that its FPSO units on the Jubilee and TEN fields achieved a 98% uptime year-to-date, underscoring robust operational reliability.
Focus on Future Growth
Looking ahead, Tullow plans to launch a 4D seismic programme in January 2025 to enhance data precision and optimize future drilling plans. The initiative forms part of the company’s medium-term strategy to boost production and strengthen its position in Ghana’s upstream oil sector.
The combination of operational challenges and the outstanding debt underscores the complexities of operating in West Africa’s oil industry, but Tullow remains optimistic that its strategic measures and improved financial footing will deliver stronger results heading into 2025.
