Anglo-Irish explorer Tullow Oil has cut its 2019 oil production forecast for the year amid ongoing problems at its Ghana fields.

Tullow said on Wednesday its net oil production was around 87,000 barrels a day in 2019, down from an earlier forecast of 89-93,000 bpd.

Full-year capital expenditure is forecast to hit $540 million with free cash flow of $350 million, down from an earlier forecast of $400 million. The company said it expects full-year net debt to stand at $2.8 million.

Tullow has been struggling with its operations in Ghana due to mechanical issues at its Jubilee field and a delay in completing a well at TEN offshore field.

In its November trading update, Tullow acknowledged that its proposed farm-down of Ugandan acreage to partners Total and the China National Offshore Oil Corporation (CNOOC) had lapsed, however, the company indicated their continued commitment to the 230,000 barrel-a-day Albertine Graben oil development.

Tullow reported that “conversations with the Uganda government are ongoing”, and that it remains committed to reducing its equity ahead of a final investment decision (FID) and will initiate a new sales process to achieve this.”

In addition, the outlook for gross output at its Jubilee and TEN fields in the West African country has been reduced for 2019 because of the mechanical issues.

The constrained water injection issue at Jubilee will return to full capacity by the end of this month, but enhancements to the gas handling system are planned for early 2020, Tullow said.

“At Jubilee, gross full year 2019 production is forecast to be around 89,000 bpd. The lower than forecast full year outcome is predominantly due to topside issues which have constrained water injection and gas handling,” Tullow said.

“Water injection will be returned to full capacity by the end of November and enhancements to the gas handling system are planned for early 2020 to increase gas throughput capacity which will reduce gas management constraints,” the company added.

Meanwhile, the first 240,000-barrel cargo of Lokichar crude oil export had been trucked out and shipped from Mombasa on the Indian Ocean and the FID on Project Oil Kenya, including a proposed pipeline to Lamu, is now expected in the second half of 2020.

Production

Tullow cuts oil output forecast