2011 Annual Report PDF - Tullow Oil plc

DEVELOPMENT & OPERATIONS
A new scale of activity
Tullow’s exceptional exploration success has provided an exciting
and growing portfolio of development and production assets in
both Africa and South America. In 2011, we have strengthened
our operational organisation through a new regional business
structure, comprising West & North Africa, South & East Africa
and Europe, South America & Asia, which provides focused
leadership of our operations. In addition, we have created a
new Development and Operations Group at a corporate level
that combines all our engineering and development functions.
This is to ensure that Regional Business Units are provided
with world-class technical resources and access to the
most appropriate technologies.
Excellent EHS performance
In 2011, we also delivered an excellent EHS performance with
the lowest LTIFR in our history, in addition to a best in class
FPSO performance in Ghana and no LTIs since its arrival in
Ghanaian waters in June 2010. Our goal is to consistently
achieve top quartile industry performance and, in line with
the new organisation, we have significantly enhanced our
EHS capability through improvements to our EHS resources,
reporting structures and the introduction of new standards.
The next steps in Ghana
Having brought the Jubilee field on production in November
2010, Phase 1 development activities continued throughout
2011 as the final producers and injectors were commissioned
and production rates increased. However, production from
Jubilee in 2011 was lower than anticipated and this is being
remediated through the installation of newly designed well
completion equipment. We anticipate that the issue will be
resolved this year allowing us to achieve plateau production in
2013. Production will also be supported by Jubilee Phase 1A
which will include a total of eight additional wells. Utilising
the existing FPSO, acquired in December 2011, the Phase 1A
operations are expected to take around 18 months to
complete at an estimated cost of $1.1 billion.
During 2011, a successful E&A programme on the TEN cluster
enabled Tullow, as Operator, to initiate FEED works in August.
We have established a project office in Singapore and FEED work
has been carried out on the FPSO and subsea infrastructure
options with a Plan of Development (PoD) expected to be
submitted to the Government of Ghana in the third quarter of
this year. We expect first oil to commence some 30 months after
approval with combined production in the region of 100,000 bopd.
Initial gas production will be split between export and re-injection
to manage reservoir performance.
2012 working interest production
2012 production is forecast to average between 78,000 and
86,000 boepd with an exit rate of over 90,000 boped expected.
Gross Jubilee production is currently around 70,000 bopd and
is expected to average 70,000 to 90,000 bopd in 2012.
Our medium-term priority is to ensure we do the right things to
deliver the critical elements that will enable us to maximise the
long-term value and recovery rates from the field.
Further production growth
Due to the delays in Uganda, the ability to progress development
activity was limited during 2011. With the successful completion
of the farm-down in February 2012, the partnership can now plan
to accelerate activity with the aim of submitting a PoD to the
Government of Uganda later this year. Some small scale
production is envisaged to start late 2012 but substantial
production is expected approximately 36 months after a basinwide
PoD is approved by the Government. Based on this timetable,
ramp-up to major production should commence in 2016.
Elsewhere, the exciting discovery made in French Guiana will
be appraised in 2012 to allow for an early review of development
concepts. In Mauritania, where we took over Operatorship of the
C-10 licence this year, we are reviewing concepts to progress
the Banda oil and gas discovery. In Namibia, we are continuing
to pursue development of the significant Kudu gas field. In
addition, approximately 40% of our development capital is
invested incrementally in mature producing fields, significantly
offsetting production decline in these assets.
“Tullow’s success has
always been based on our
people and their ability to
influence our business. We
are evolving our structure
in a way that allows these
teams to continue to
deliver substantial
shareholder value.”
More information
Page
Chief Executive’s review 10
Financial review 34
Corporate responsibility 62
Paul McDade
Chief Operating Officer
2
OPERATIONS REVIEW
51
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