Tullow Oil struck by double blow in Africa
Tullow Oil faces a double blow to its interests in Ghana and Kenya where legal woes and public protest continue to dog its oil projects.
The London-listed oil explorer has been ordered to pay out an extra $50m (£38m) to Kosmos Energy, its project partner in Ghana, after losing a dispute with its rig contractor last month.
A London court said Tullow must pay $140m to Seadrill after breaking off its contract at the end of 2016, and a separate tribunal ruled today that Kosmos is not liable for the $50.8m share of the cost.
The arbitration also insisted that Tullow reimburse Kosmos for some of its legal and rig demobilisation costs.
Meanwhile ongoing protests at Tullow's oil project in Turkana, Kenya have raised fears that the besieged Kapese operations site may need to shut within weeks.
The project, which began pilot operations only a month ago, has already faced problems trucking the planned 2,000 barrels of oil a day from the northern fields to the coast.
Angry local residents are demanding that the community see more of the benefits from onshore oil, in further evidence of growing economic activism in East Africa.
A Tullow Oil spokesman said that based on the current inventory levels the site would run out of essential supplies within 14 days, “after which we will have no option other than a complete shutdown of the camp”.
Nonetheless the company said it was “optimistic” that crude oil trucking would be able to resume again soon, ahead of a decision early next year on whether to ramp up production at the field from 2021.
“It is vital that our return to work in Kenya has the backing and support of the government, Turkana leadership and the community. We are working hard on reaching an agreement that will make sure that our operations will not be interrupted in the future,” the spokesman said.
Tullow shares were down 0.78pc at 217.4p in afternoon trade. The stock has risen 5pc this year.
