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Tullow Oil to review output forecast after Jubilee field problems

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LONDON, July 20 (Reuters) – Tullow Oil (LSE: TLW.L – news) is reviewing the output forecast for its key Jubilee field in Ghana because of a continuing technical problem, it said on Monday, which could prompt a lowering of its recent upgrade to 2015 production guidance.

Shares (Frankfurt: DI6.F – news) in the Africa-focused energy group fell 2 percent after news that oil and gas exports from the field would be reduced for a further three weeks to fix a gas compression issue that has affected output since July 3.

Production at Jubilee, which accounts for the bulk of Tullow’s oil output, is down by 38 percent at 65,000 barrels per day and gas exports have been suspended, the company said, adding that it will review its 2015 Jubilee forecast and provide an update when it presents first-half results on July 29.

Tullow raised its full-year production guidance as recently as July 1 after bumper output from its West African oil fields, including Jubilee, but the gas compression problem could force it to lower expectations.

Analysts at Deutsche Bank (Xetra: 514000 – news) said that a disruption of about six weeks would cut Tullow’s 2015 overall production guidance of 75,000 barrels of oil equivalent per day by around 2 percent.

“A longer period of downtime at Jubilee is a setback and risks putting some of this progress into reverse,” the analysts wrote in a report to clients. (Reporting by Karolin Schaps and James Davey; Editing by David Goodman)

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