Tullow Oil Drops On Concern Ghana Exploration May Be Suspended

Written by Bloomberg Africa

Paul Burkhardt | From Bloomberg News

Tullow Oil Plc, an energy producer in Africa, fell to a one-month low in London trading after saying Ghana could be ordered to suspend drilling in an area where it operates.

Tullow dropped as much as 8.6 percent to 354.1 pence, the lowest intraday price since Jan. 30, and was at 361.4 pence as of 11:54 a.m. local time.

Ivory Coast, which disputes sea boundaries with neighboring Ghana, has asked an arbitration panel to order Ghana to halt drilling in an area where Tullow operates its Tweneboa-Enyenra- Ntomme project, the company said Monday in a statement. The TEN project is set to produce its first oil in mid-2016.

While a decision on Ivory Coast’s request is likely before the end of April, a “full verdict” on the dispute from the panel isn’t expected until late 2017, according to London-based Tullow.

Legal advisers have said Ghana has a “strong case” that the current boundary location will be upheld, Tullow said.