Tullow Oil Confirms Insurance for Jubilee Field Output Losses

ACCRA (Capital Markets in Africa) – Tullow Oil Plc confirmed that insurance would cover losses associated with a technical issue that disrupted output at its flagship asset in Ghana.

The Africa-focused oil explorer and producer received confirmation from its lead insurers that they accept there is a recoverable claim, according to a statement Friday. The London-based company did not disclose the scale of losses caused when production was halted at the Jubilee field from March 20 to May 3, following the discovery of a fault in the floating production, storage and offloading vessel’s turret, which is moored to the seabed and allows the ship to rotate.

“The business interruption policy, which is procured for Tullow’s interest in its major producing assets, covers loss of revenue,” according to the statement. “Cover includes production losses at the Jubilee Field associated with the failure of the bearing and the downtime associated with the work program to re-establish normal operations.”

Shares of Tullow initially rose as much as 1.2 percent to 242.9 pence in London, then traded 0.9 percent lower at 238 pence at 8:05 a.m. amid a broader market slide. The stock has gained 44 percent this year, making it the best performer on the 20-member STOXX Europe 600 Oil & Gas Index.

Tullow last week confirmed insurance would cover operational costs related to the mechanical fault. The company has said it will work with its partners to install a spread mooring next year, which will require the field to be shut down for eight to 12 weeks at a cost of $100 million to $150 million. It will provide its next update on progress of the project on Nov. 9, according to the statement.

Source: Bloomberg Business News

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