Tullow to invest $300 million in Ghana operations

Tullow to invest $300 million in Ghana operations

Independent oil and gas, exploration and production group, Tullow, has projected to invest $300 million in its operations in Ghana.

The money will be spent mainly on its Jubilee operations and will include over $100 million in infrastructure.


The company’s planned investment in Ghana is part of a $400 million amount the company intends to spend this year on its operations in Africa.


An amount of $40 million will be spent in Gabon; $20 million in Côte d’Ivoire; $10 million in Kenya and $30 million on exploration and appraisal activities.

The company’s annual expenditure is an increase of $50 million compared to 2022 as a consequence of deferrals from that year, increased equity in Ghana for the full year, and ongoing infrastructure investment in Jubilee South East, which will account for 40 per cent of Ghana capital spend in 2023.

Other expenses

The company said its decommissioning expenditure is expected to be $90 million in the United Kingdom (UK) and Mauritania, including deferrals from 2022, with less than $30 million of decommissioning liabilities in the UK and Mauritania remaining at the end of 2023.

“Additionally, starting in 2023, $30 million is expected to be paid annually into escrow for future decommissioning of currently producing assets in Ghana and parts of the non-operated portfolio,” it said.

It said, cash taxes are expected to be in excess of $300 million in in the year under review (at $80/bbl) as historical capital allowances in Ghana will have been fully utilised in the first quarter of 2023.

Cash flow

“Tullow said free cash flow for the full year 2023, post hedging, is expected to be $200 million at an average oil price of $100/bbl ($100 million at $80/bbl); this assumes revenue receipts for 15 cargos lifted from the Jubilee field and four cargos lifted from the TEN fields in Ghana during the year.

Capital investment in 2023, particularly in Ghana, is expected to support production growth through to 2025 and free cash flow generation of $700-800 million at 80/bbl for the two years 2024 and 2025 based on 2P reserves only, which will further reduce net debt and strengthen Tullow’s balance sheet,” it said.

It said Tullow’s commodity hedge portfolio provides oil price downside protection at $55/bbl for 64 per cent of forecast sales volumes to May 2023 and 40 per cent of forecast sales volumes from June 2023 through to May 2024.

The company added that with the majority of hedges executed as part of the 2021 debt refinancing rolling off, Tullow will have increased exposure to higher oil prices from May 2023 onwards.

“Tullow plans to build out its commodity hedge portfolio for the second half of 2023 and into 2024, looking to maintain material upside exposure whilst securing protection against a severe oil price downturn,” it added.

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