Clogged-up pipes at its giant Ghanaian field could not stop Tullow Oil from increasing profits fivefold.
The Africa-focused company still managed to boost output by 35 per cent after the Jubilee field came onstream, which, along with high oil prices, allowed it to announce record profits which rose from $179 million (£113 million) to $1 billion.
The company’s coffers were already bulging after finally completing the $2.9 billion sale of two thirds of its Ugandan prospect to Total of France and CNOC of China last month. The deal had been held up for months by corruption claims and a tax dispute.
Tullow will invest the proceeds on its exploration projects in Africa and South America rather than making acquisitions. It plans to invest $2 billion this year, compared with $1.4 billion in 2011.
Production averaged 78,200 barrels per day in 2011, which was the first full year of operation for the Jubilee field. Problems with clay clogging the pipes meant that the field produced only about half its total “plateau” target of 120,000 barrels per day.
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As a result, the company narrowly missed its most recent group production target for 2011 of between 79,000 and 81,000 barrels per day, announced in November. Tullow said it will begin a remediation programme for Jubilee to allow the plateau target to be hit next year, two years later than planned.
The company, which began exploring in Senegal in the 1980s, now has more licence and acreage in Africa than any other company.
Ian Springett, the chief financial officer, hailed the “new wave” of oil and gas discoveries being made across Africa which has ignited industry interest in the continent in recent months.
The AIM-listed Cove Energy, which has an 8.5 per cent stake in a large gas field off the coast of Mozambique, is the subject of a hotly contested auction between Shell and a clutch of national oil companies hoping to secure a foothold in East Africa.
“There is a new wave of discoveries in places like Ghana and along the coast of East Africa,” said Mr Springett. “There is definitely a whole new phase of discoveries and developments for the next generation.”
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The company will focus next on exploration in Kenya, Ethiopia and Mauritania. It also had exploration success last year in French Guiana, in the northeastern tip of South America, which it hopes shares similarly promising geology as West Africa.
Revenues rose by 111 per cent to $2.3 billion. Tullow said it will pay a final dividend of 8 pence per share, compared with 4 pence in 2010.
Shares closed up almost 2 per cent at £14.82.