Tullow Oil Thrives Amid Industry Downturn Despite Credit Crunch

Strategic Insights -

Tullow Oil, an independent player in the UK energy sector, has secured a significant influx of capital, defying the current industry slump and credit crunch. The company has arranged a $1.885 billion financing facility with a group of 13 banks, including BNP Paribas, Barclays, and Societe Generale, in addition to an extra $115 million pledged by the World Bank's International Finance Corp. This new lending will support the $3.2 billion development of Tullow's Jubilee field in Ghana, which has seen a major breakthrough with the discovery of a new field, Tweneboa-1, containing estimated reserves of 1.2 billion barrels.

Key Takeaways:

  • Tullow Oil has secured $2 billion in new lending to support the development of its Jubilee field in Ghana.
  • The new lending consists of a $1.885 billion facility arranged with 13 banks, including BNP Paribas, Barclays, and Societe Generale, and an additional $115 million pledged by the World Bank's International Finance Corp.
  • The facility replaces an existing $1.35 billion facility at a higher interest rate, with Tullow's new loan rate set at a maximum of 3.75% over US dollar-denominated Libor.
  • The Tweneboa-1 well, located 25 km west of Jubilee, has revealed an estimated 1.2 billion barrels of reserves and is expected to contain 1.4 billion barrels of oil equivalent.
  • Tullow operates the Jubilee block with a 49.95% stake, while its partners include Kosmos Energy (18%), Anadarko (18%), Sabre (4.05%), and Ghana National Petroleum Corp. (10%).

Statistics:

  • $2 billion in new lending secured by Tullow Oil to support Jubilee field development.
  • $1.885 billion facility arranged with 13 banks, including BNP Paribas, Barclays, and Societe Generale.
  • $115 million additional pledge from the World Bank's International Finance Corp.
  • 1.2 billion barrels of estimated reserves in Tweneboa-1 well.
  • 1.4 billion barrels of oil equivalent estimated to be contained in Tweneboa-1 well.
  • Jubilee field development valued at $3.2 billion.
  • 3.75% as the maximum interest rate over US dollar-denominated Libor for Tullow's new loan.

Sources:

  • PIW Dec.22, p3 (maximum interest rate quoted)
  • Tullow Oil press release (arrangement of new lending and Jubilee field development details)