Tullow Oil Reels in Shell, Sells Super-Major on Potential Offshore French Guiana
Tullow Oil, the tiny-but-mighty UK-based company, has sold super-major Royal Dutch Shell on the potential of fields offshore French Guiana, a territory on South America's northern coast.
Tullow Oil is a partner in the Jubilee field offshore Ghana in West Africa -- a long ways from South America. But wait, there's a link.
The Jubilee field, whose major partners include Anadarko Petroleum and operator Kosmos Energy, is home of one of the largest oil finds in the past decade in West Africa. Anadarko reported last month after another successful appraisal well, the Jubilee may be bigger than previously thought.
As FT's Energy Source reports, Tullow and Anadarko believe in a theory that a pattern of rock rich in oil can be found in a geological stretch along the west African coast, past Sierra Leone, Liberia and Ghana; and then heads straight across the Atlantic to French Guiana.
The theory is convincing enough for Shell to buy a 33-percent interestin Tullow's Guyane Maritime license, a prospect offshore French Guiana, according to information provided in its interim management report released Wednesday.
Tullow has focused its efforts in South America on pursuing geological play types similar to the Jubilee field in Ghana and has identified a number of leads in offshore Guiana, the company said.
Tullow has retained a 64.5 percent operating interest in the block offshore Guiana. The sale to Shell includes an option to buy an additional 12 percent stake at a later date. Tullow also said it expects to sell a stake in this block to another party before the end of the year.
Tullow, clearly tickled by the deal, said the inclusion of Shell as a partner is a "strong endorsement of our Equartorial Atlantic acreage." Another way of saying, Shell has some confidence in its theory.
Results of a recent 3D seismic program that started in mid-September probably helped as well.
UPDATE on Jubilee: Tullow also provided an update on the Jubilee field and said it is on track to provide first oil by the fourth quarter 2010.
For more BNET Energy coverage on the Jubilee field: