Tullow, Interoil Find Oil, Gas at Ghana's Tano Block

By Eduard Gismatullin and Maher Chmaytelli

Nov. 20 (Bloomberg) -- Tullow Oil Plc, the U.K. explorer with the most licenses in Africa, and Interoil Exploration & Production ASA found oil and natural gas at Ghana's Tano Block, boosting prospects for oil recovery at the nearby Tweneboa field.

The Ebony-1 shallow-water well found a 4-meter (13-foot) layer of oil at a depth of 2,053 meters and a 2-meter layer of gas condensates at 2,570 meters, Lysaker, Norway-based Interoil said today in a statement.

The deeper gas condensate layer may be linked to the deep- water Tweneboa oil deposit, ``a big prospect'' that Tullow plans to drill in January, Ian Springett, chief financial officer of the London-based company, said today by telephone.

``The gas condensate has very high pressure'' at the bottom of the well, where it's ``definitely worth a lot of money,'' Springett said, adding that the top oil layer may not be commercially viable.

Tullow plans to invest about $3.2 billion to develop the nearby Jubilee field and produce the first oil there in 2010. The company is targeting about 4 billion barrels of oil and gas resources in the Gulf of Guinea, offshore Ghana and Ivory Coast. It intends to supply the first gas from Jubilee to Ghana in 2011.

Tullow is working with Ghana National Petroleum Corp. on Jubilee's gas development plan, Springett said. ``Any of the gas found in the area will be very beneficial to that plan.''

Chance of Success

The Ebony-1 discovery ``has improved the chance of success at Tweneboa from around 30 percent to around 40 percent,'' Exploration Director Angus McCoss said today in a phone interview. Tullow targets as much as 800 million barrels of oil resources at Tweneboa and will announce drilling results in March, he said.

Tullow fell as much as 4.2 percent to 424.75 pence in London trading and was at 440 pence as of 12:50 p.m. local time. The stock earlier climbed as much as 1.2 percent.

``While activity from a Tullow perspective in the shallow- water Tano license ranks secondary to drilling around'' Jubilee, ``the result is nevertheless positive in that it opens up the prospect of further exploration in the shallow-water area,'' Gerry Hennigan, an analyst with Goodbody Stockbrokers in Dublin, said today in a report.

Tullow, the operator of the Tano license, and Interoil each hold a 31.5 percent interest in the field. The other partners are Thani Ghana, Sabre Oil and Ghana National Petroleum.

``The potential volumes associated with this discovery will be subject to an ongoing evaluation and further appraisal drilling will be discussed with our license partners,'' Interoil Chief Executive Officer Nils Trulsvik said in the statement.

To contact the reporters on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net; Maher Chmaytelli in Nicosia at mchmaytelli@bloomberg.net