Tullow to boost North Sea output

TULLOW OIL is set to boost production from the North Sea with a €300 million purchase of assets from Scandinavian utility, Vattenfall.

Tullow said yesterday it had agreed to buy Dutch group, Nuon Exploration and Production, from Vattenfall for €300 million. Nuon will add 25 licences in more than 30 natural gas fields off the Dutch coast in the North Sea to Tullow’s existing portfolio in the area, where it already has interests in a number of wells producing natural gas, which contributed $218 million to Tullow’s revenues last year.

The deal announced yesterday will add the equivalent of 9,000 barrels of oil a day to the company’s production from the region, bringing that to a total of 23,000 a day. The purchase will increase reserves there to the equivalent of 28 million barrels of oil.

The deal is expected to be completed in July. Tullow expects production this year to hit 100,000 barrels a day as output from its field off the coast of Ghana gathers momentum. Production from this area began late last year and is ultimately expected to reach 120,000 barrels a day.

The company’s chief operating officer, Paul McDade, acknowledged the Nuon deal was modest from an overall group perspective, but said it would boost the value of its overall North Sea holdings.