This archive report was first published on 10 December 2019.
London-listed Tullow Oil (LON:TLW) has been facing intense scrutiny over its operations in Africa, particularly in Ghana and Kenya, where it has made significant oil discoveries.
According to a statement issued by the company, production performance in Ghana's TEN and Jubilee fields has been significantly below expectations, prompting a downward revision of its production guidance for FY 2020.
As a result, the company's global CEO, Paul McDade, and Exploration Director, Angus McCoss, have been forced to resign, effective immediately.
Executive Chair Dorothy Thompson noted that the board has been disappointed with the poor performance of the African assets and has undertaken a thorough review of operations.
Independent reserve audits have indicated flat output following the downward adjustment in reserve volumes.
Despite this, Tullow Oil has posted a net profit of Ksh.10.5 billion in the half-year to June, supported by growth in discovered resources, lower operational costs, and a slide in short-term debt maturities.
However, the company's Kenyan operations have also been marred by controversy, with allegations of exaggerated productivity claims and concerns about the government's decision to sign closed agreements with the firm.
President Uhuru Kenyatta has hailed the country's first-ever oil export, with 200,000 barrels sold at a decent price of US$12 million.
Commercial quantities of crude oil in Kenya were discovered in 2012 in the South Lokichar Basin, and Africa-focused Tullow Oil has continued its exploration and appraisal drilling campaigns in the country.
Kenya's government has signed an agreement with Total, Tullow Oil, and Africa Oil to develop an oil processing facility with a capacity of 60,000 bpd-80,000 bpd, as part of the country's plan to begin commercial oil production within a few years.
