Tullow Oil will reduce its headcount in Kenya by about 40 per cent as part of a company-wide restructuring following poor performances at its Africa and Guyana operations.
This is according to an article published by Bloomberg on Thursday. According to the article, about 35 workers will become redundant.
According to Bloomberg, Tullow’s Kenya Managing Director Martin Mbogo made the announcement in an emailed response to questions. The reduced team “will focus” on achieving a final investment decision for the Kenya project this year, Mbogo said.
Tullow’s projects have been delayed in Kenya and Uganda, where the oil explorer is looking to reduce its stake in discoveries. Assets in Ghana performed poorly last year, and a Guyana crude oil deposit turned out to be smaller than expected, the article stated.
Meanwhile, it noted that Tullow said February 5 that it expected its total workforce to shrink by a third and offices in Dublin and Cape Town to close as part of the restructuring. That would result in “considerable savings”, the company said.
On Tuesday, SP Global reported that Tullow Oil planned to assess the future potential of heavy oil finds off Guyana in the coming days, according to block partner Eco Atlantic on Monday, three months after details of the viscous crude discoveries cast doubt over the commerciality of the asset.
Announcing a 29 per cent increase in the prospective resources of the offshore Orinduik block, Eco said a scheduled meeting with Tullow and France’s Total will evaluate recent drilling results, define new drilling targets, and consider budgets and dates for future drilling.
Tullow’s shares took a tumble in November after the company said its promising Joe and Jethro oil finds off Guyana were not as valuable as first expected owing to the oil being tough-to-produce heavy crude.
The oil at the finds in the Orinduik block has a specific gravity of 10-15 API and a very high sulphur content.
Heavy crude is typically classified as 10-22 API, making the Guyana finds only slightly better quality than the extra-heavy crude from Venezuela’s Orinoco belt and the tar sands from Canada’s Alberta province.
Tullow operates the Orinduik block with a 60 per cent stake, while Total and Eco Atlantic each hold 15 per cent and Qatar Petroleum has the remaining 10 per cent. It also has a minority stake in the adjacent Repsol-operated Kanuku block where the Carapa prospect is currently being drilled.
On January 2, British-owned Tullow Oil as made its third oil discovery offshore Guyana, but despite finding high-quality crude this time, the company has decided against commercialising the oil.
In a statement, Tullow had explained that its latest find at the Carapa-1 well on the Repsol-operated Kanuku licence was approximately four metres of net oil pay based on preliminary interpretation, which is below pre-drill estimates.
