Tullow Oil will wring the ultimate barrels of oil from its North Sea wells over the following six months earlier than shutting all eight of its fields by the top of the 12 months.
The FTSE 250 firm confirmed forward of its AGM that its fields within the UK Continental Shelf will cease producing within the third quarter of this 12 months, earlier than the wells are plugged and deserted fully.
Its 10 UK wells throughout eight licences have added a median of simply 2,700 barrels of oil a day to its total 87,700 barrel a day manufacturing fee for the 12 months to date.
The UK’s contribution will dwindle to a every day fee of 1,900 this 12 months as a complete, it stated.
The shutdowns mark the top of an 18-year period for group, which snapped up the fields from BP in a £201m deal in 2000.
The closures are a part of the primary wave of oil rig shutdowns, or decommissioning, which is able to happen throughout the getting older basin within the coming many years.
Trade physique Oil and Gas UK estimates that greater than 200 fields within the UK North Sea will shut down between 2017 and 2025 at a value of £17bn. These prices are claimed again from the Treasury by the businesses, which paid heavy taxes within the North Sea’s heyday.
As a end result there’s rising stress on offshore engineers to seek out decrease value strategies for winding down oil fields. This work may additionally assist the UK by establishing a decommissioning sector with service export potential.
Tullow’s most important focus is now on the low-cost oil areas off the west coast of Africa the place it stays on monitor with a drilling programme for its TEN and Jubilee fields in Ghana.
“Tullow continues to make robust progress in 2018 and we proceed to generate free money circulate from our high-return manufacturing property in West Africa,” Paul McDade, Tullow’s boss, stated.
The group is wrestling with a heavy debt burden that constructed up throughout the oil market downturn because it ploughed funding into the Ghana tasks. Tullow stated its web debt was $three.4bn (£2.4bn) on the finish of March. The group has headroom of $1bn after elevating $800m by way of a senior notes issuance final 12 months.Source: www.telegraph.co.uk
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