By Ed Ballard
LONDON--Shares in Tullow Oil PLC (TLW.LN) gained as much as 9%
on Monday after an international tribunal ruled that oil and gas
development work can continue on its offshore TEN project, located
in territory disputed by Ivory Coast and Ghana.
The Hamburg-based Special Chamber of the International Tribunal
of the Law of the Sea, or ITLOS, ruled Saturday that Ghana must
stop all drilling in the disputed area, but dismissed Ivory Coast's
call for a suspension of all petroleum operations. Tullow has
already completed the drilling required for oil to flow next year
from its own $4.9 billion development in the disputed zone.
"Development work on the TEN Project continues," the U.K. oil
explorer said. "The project is now over 55% complete with all 10 of
the wells expected to be online at first oil already drilled. The
project remains within budget and on schedule with first oil
expected in mid-2016," it added.
At 0722 GMT, shares were trading 18 pence, or 4.3%, higher at
436 pence, having earlier risen as high as 457 pence apiece.
ITLOS has called for "continued cooperation" from the two
countries until it reaches a final decision on the boundary
dispute, which is expected in late 2017.
"Tullow is not a party to this arbitration process and will now
await a decision by the Government of Ghana on how it will
implement the provisional measures order," the company added.
Marc Anis-Hanna, oil and gas analyst at VSA Capital, said,
"Having this project on stream by mid-2016 is important for Tullow
as it would provide the necessary cash flow for the company to
support its debt related payments."
"We think that whatever the final outcome is, TLW will be able
to pursue the development of the TEN field within either country,"
he added.
The Jubilee field, a development operated and 35% owned by
Tullow which produced 102,000 barrels a day on average in 2014,
isn't affected by the dispute, the company said.
Write to Ed Ballard at ed.ballard@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires