Tullow flags Kenya restart, weak North Sea sale process

Reuters

* North Sea buyers struggle to get finance

* French Guiana well programme finished, assessment starts

* "Accelerates" local engagement in Kenya's Turkana community

By Andrew Callus

LONDON, Nov 13 (Reuters) - Africa-focused Tullow Oil Plc confirmedon Wednesday it had restarted operations in northern Kenya on Nov. 8 afterreaching a deal with local leaders to prevent a repeat of protests that haltedwork last month.

Residents of the remote, poverty-stricken northern Turkana community,supported by a local politician, marched on Tullow operations on Oct. 26 todemand more jobs and other benefits. The government said protesters ransackedone site, which Tullow works on with partner Africa Oil.

Paul McDade, London-listed Tullow's chief operating officer, said thecompany had agreed to "accelerate" training programmes and other communityinvolvement schemes.

In a trading statement, Tullow also gave an update on a number of key wellsworldwide. It flagged a weak market for the mature southern North Sea assets itis trying to sell - extending the process over the next 18 months and breakingup the business to sell it in smaller pieces.

"We realised, having gone through the initial process, the market for thosetypes of assets is a bit weaker than we anticipated. Potential buyers can seethe value there but really struggle a little bit to structure the finance aroundit," McDade told Reuters.

The future health of the North Sea - as its productivity begins to wane andthe cost of running aging infrastructure escalates - has become part of a hotpolitical debate on energy prices and supply security in Britain.

Tullow is selling out because it sees itself as mainly an explorer and anopener of new basins.

Tullow said a result on its Tultule 1 well in Ethiopia was expected by theend of November, and that its Fregate well in Mauritania would reach total depthin December.

FRENCH GUIANA ASSESSMENT STAGE

In French Guiana, one of Tullow's big hopes and a closely watched new oilprovince, Tullow said its Zaedyus-1 had reached total depth and evaluation ofthe well was ongoing.

Wessex Exploration, a partner in the Guyane Maritime Project alongwith operator Shell and Total, said the well had been pluggedand abandoned after finding no evidence of hydrocarbons.

McDade said this was in line with expectations as the well had been drilledto ascertain the limits of the resource.

The partners now plan to work on integrating and assessing the datacollected.

Morgan Stanley analysts said the statement showed good overall progress butlittle news and maintained an overweight stance. Tullow shares fell 1.7 percentto 885 pence, slightly underperforming the broader European oil stocks market.

Rates

View Comments (0)