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Tullow Oil makes $270m in insurance compensation for damage caused FPSO turret bearing

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Tullow oil Ghana Limited has received $220 million from insurers as compensation for the damaged turret bearing that hangs on the Floating Production Storage Offloading Vessel (FPSO).

This is part of a sum of $270 million that the Lead Partner has requested from the Insurer. Tullow, according to the Managing Director, Mr  Charles Darko is expecting the remaining $50 million to be paid soon as the insurers access the invoice presented to them.  However, it is not clear if Tullow Ghana will be sharing this money among the Jubilee Partners. Ghana has lost revenue from oil due to the damage.

Meanwhile Tullow Oil says it is still considering a permanent solution to the damaged turret bearing on the floating vessel used in producing and storing oil at the field.

Currently, the oil producer said, it has fixed the ship to the seabed to stabilize it and is considering a permanent solution to the problem.

Tullow oil made a revenue of $8 billion with gross profit of $3 billion. It had free cash flow of $2 billion and post tax loss of $3 billion after impairments.

Its net debt reduced by $1 billion since year-end to $3.8 billion at the half year following generation of free cash flow and $750 million Rights Issue in April 2017. Facility headroom and free cash now $1.2 billion.

West Africa net working interest oil production, including production-equivalent insurance payments, averaged 81,400 bopd in half year 2017. Full year guidance of 78,000 to 85,000 bopd remains unchanged.

Jubilee Turret Remediation Project making good progress with costs being offset by insurance payments. Greater Jubilee Full Field Development Plan (GJFFD) submission to Government of Ghana on track.

TEN production performance in line with expectations, preparations under way to resume drilling later in the year subject to the ITLOS decision.

Farm down of assets in Uganda will provide upfront cash on completion and deferred payments to cover upstream and pipeline capex to first oil and beyond.

“Significant progress across our exploration portfolio with seven seismic campaigns in 2017, numerous successful farm-downs and preparations on track to drill the high-impact Araku-1 well in Suriname in the fourth quarter of 2017”.

By Adu Koranteng

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