Following the earlier announced cut in exploration costs by Tullow oil the explorer has said it will focus on seismic surveying, processing and interpretation, high-grading and progressing leads to drill worthy prospects as oil prices continue to remain at an all-time low.
Tullow Oil which has set just $100 million for exploration adds it will also continue seeking low cost and highly prospective acreage in core areas to ensure that the business maintains its industry-leading exploration portfolio.
“Exploration will continue to be a key part of Tullow’s long-term growth strategy, however, given sustained low oil prices, capex will be around $0.1 billion in 2016,” says Tullow Oil CEO Aidan Heavey.
On development projects phase Tullow Oil which submitted a draft Field Development Plan to the Government of Kenya in December 2015 says the plan will form discussions towards potential FID for both the Kenya and Uganda.
The cut in exploration costs are part of Tullow’s plan to reduce its overall capital expenditure to just $300 million in 2017 from $1.1 billion in 2016.In the past year administrative costs expected to rise to $194 million and restructuring costs were up by $41 million.
Meanwhile the group has reported a full year loss after tax of $1.03 billion largely driven by costs from exploration writes off which stood at $749 million. The loss was however 37 percent lower compared to $1.64 billion loss in 2015 when costs from exploration writes off hit a staggering $1.65 billion.