Tullow - comment

The Ghanaian Government (Ghana National Petroleum Company) have signed a Memorandum of Understanding to extend oil production licences to 2040.  The MOC includes approval to drill up to 20 additional wells in the Jubilee field.

Until details are available on future prices, we are unable to assess if the result is good or bad for Tullow. While the extension is largely a formality (license extensions are generally expected), the MOC again includes the principle that Ghana should receive the Jubilee gas at reduced prices. However, under the previous arrangement, Ghana already received the Gas at a discount to market prices and so the price will be what determines revenues.