Undermine: Financial problems in Tullow’s global operations continue to undermine a number of commitments across its subsidiaries. FILE PHOTO Tullow Oil’s latest job cuts announced particularly in Kenya and related actions in other subsidiaries such as Uganda continue to dampen the possibility of oil production and exploration.
Whereas Tullow last week indicated it would lay off about 35 workers, in Uganda the company has already cut back on its operations and shown willingness to dispose of a huge part of its stake in the country’s oil industry.
The action, according to analysts, has been a result of deepening financial woes especially in Ghana.
Tullow last week, confirmed an estimated 35 workers at its Kenyan operations will be sent home, while Reuters news agency reported that even deeper cuts are looming.
Its Cape Town and Dublin offices are facing closure while the total workforce will be reduced by a third to 650, according to the Reuters report.
Tullow’s financial struggles are attributed to a sharp drop in revenue from its Ghana operation, delays in operationalisation and sale of its stake in East Africa and reports of poor quality of its Guyana oil discovery.
Tullow’s effort to dispose 27 per cent of its stake in a Joint Venture Partnership in Uganda last year collapsed and has remained suspended since.
“The restructuring follows Tullow’s announcement in December that its global oil production and associated revenues in 2020 and beyond would be lower than forecast. In Kenya, the team will be reduced, and will only be focused on the critical path activities that will allow us to continue to target FID [final investment decision] at the end of 2020,” said Tullow Kenya MD, Martin Mbogo, in a response to queries from The EastAfrican.
The financial troubles have put in doubt earlier timelines of Tullow’s commercialisation of the Uganda and Kenyan crude reserves.
Former Tullow Chief Executive Officer Paul McDade announced his sudden exit in December, sending the firm’s share price on a sharp spiral.
The group’s global oil production in 2020 is forecast to average between 70,000 and 80,000 barrels per day, down from 87,000 barrels per day, while production for the following three years is expected to average around 70,000 barrels per day.Among the critical activities towards achieving FID will include submission of the Field Development Plan, securing Environmental and Social Impact Assessment (ESIA) licences for upstream and midstream, working with the government to secure access rights to land and water, and […]