Tullow Oil to realise £35m from sale of drilling blocks in North Sea

TULLOW OIL will realise £35 million (€44.61 million) from the sale of 10 drilling blocks in the North Sea to Venture Production, an Aberdeen-based oil and gas company.

Tullow, which is concentrating on major development projects in Uganda and Ghana, said the sale was part of an ongoing portfolio management process.

The FTSE 100-listed company said the objective of this exercise was to enable the group to allocate capital to "more material" exploration, appraisal and development projects in its portfolio of international interests.

The deal with Venture Production, which is subject to the approval of Tullow's partners, is likely to close by the end of next month. The blocks in question are in the western part of the Caister-Murdoch System (CMS) in the southern North Sea area.

They include six proven but undeveloped discoveries and two pure exploration blocks.

"Any future development on these 10 blocks are likely to pass through the CMS infrastructure, thereby generating additional tariff income for Tullow," the company said.

Tullow said it remained committed to the southern gas basin region of the North Sea and would continue to invest in the CMS area in producing fields and new developments.

"Tullow is also extending its exploration efforts to focus on the more material carboniferous prospectivity identified in the adjacent Dutch sector, using the expertise in the CMS area," the company said.

Venture Production said the estimated recoverable resources net to the company arising from the deal amount to 266 billion cubic feet.

Two of the fields to be acquired are anticipated to have field development plans submitted later this year, it said.

© 2008 The Irish Times

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