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Wednesday, February 19, 2020
Tullow Oil said last week that it had received approval from Ghanaian authorities to flare gas when necessary to support its offshore fields, according to Bloomberg.
The permission will assist heavily indebted Tullow to support production at operations that failed to meet their initial output guidance for 2019, contributing to a terrible year that also saw delays at East African projects, disappointing drilling results in Guyana and the resignation of Chief Executive Office Paul McDade.
Tullow will resort to flaring when it’s unable to ship gas ashore in order to “maintain the integrity of the Jubilee and TEN fields,” the company said in an emailed response to questions.
Ghana’s agreement with Tullow entitles the West African nation to free deliveries of gas that the company extracts with crude from its fields. However, the country’s contractual obligations with other gas suppliers such as Eni SpA have rendered some of Tullow’s deliveries surplus to requirement.
In the absence of a flaring agreement, Tullow has little choice but to inject the unwanted gas back into the reservoirs, a process which could compromise their stability and weigh on production, according to two people familiar with the matter, who asked not to be identified because they’re not authorized to speak publicly.
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