Tullow Oil to Plug and Abandon Ethiopia

Tullow Oil reported fourth disappointing drilling outcome from Ethiopia. Expected to pack up and leave
Tullow Oil reported fourth disappointing drilling outcome from Ethiopia

By TesfaNews,

AFRICA – focused explorer Tullow Oil (LON:TLW) today reported that its fourth well which was drilled to test prospect onshore Ethiopia had resulted with disappointment.

Tullow Oil in its statement today said that its Gardim-1 exploration well drilled on the eastern flank of the Chew Bahir Basin in the South Omo licence onshore Ethiopia had turned out to be dry. 

According to the Ethiopian daily The Reporter, the drilling crew of  Tullow drilled Gardim-1 with Exalo 205 rig to a total depth of 1,900 meters and reached the bottom. Though the drilling crew conducted well-testing on Gardim 1 two weeks ago, the well turned out dry.

The company noted that the well would now be plugged and abandoned.

The company had previously posted three other drilling disappointment in both South Omo and Chew Bahir basins.

“We have now drilled two independent wildcat wells in the Chew Bahir Basin, neither of which encountered commercial oil,” Tullow Oil’s exploration director Angus McCoss said in the statement.

Sources told The Reporter that executives of  Tullow Oil decided to suspend drilling operation in Ethiopia.

“They will pull out their drilling crew out of Ethiopia. They will take out their core staff to other projects in other countries and lay off the rest of the staff in their Ethiopia office. They will only keep a skeleton office in Addis Ababa,” the source said.

Tullow has a successful exploration history in Ghana, Uganda and Kenya. The fact that Tullow discovered huge crude oil reserves in the Albert basin of Uganda, Turkana and Lokichar basins of Kenya raised the hope of industry experts for the discovery oil in Ethiopia. As the South Omo and Chew Bahir basins were adjacent to the oil prone Turkana basin, many thought that Tullow Oil will strike oil in South Omo.

Unfortunately, Tullow could not repeat its African success story in Ethiopia. After drilling four wild-cat wells in South Omo and Chew Bahir the company decided to suspend drilling operations in Ethiopia.

The company, which is due to update investors on its first-half performance on July 30, earlier this month warned that it had booked a $415 million (£242 million) write-off for the first half of the year following several exploration disappointments.

The company will soon issue a press release.

Tullow is the operator of the South Omo Block with a 50 percent stake and is partnered by Africa Oil with a 30 percent interest and Marathon Oil Ethiopia which holds the balance.

WellsDeapth (m)Result Loss (USD)
Sabis-12082Traces of Oil and Gas$65 million
Tultul-12101Dry$30 million
Shimela-11940water bearing reservoirs$30 million
Gardim-11900Dry$30 million
Table Source:Ethiopian Reporter