Tullow Oil Says Insurance Cover Confirmed for Jubilee Vessel

By Razak Musah Baba

LONDON--Oil and gas explorer Tullow Oil PLC (TLW.LN) Friday said that Hull and Machinery insurance cover for the floating production, storage and offloading vessel that serves its 35%-owned Jubilee field offshore Ghana has been confirmed following the failure of the turret bearing earlier this year.

Tullow said earlier in the year that it was changing some of the operational procedures at the Jubilee field in Ghana after detecting a potential issue with a piece of equipment, but said oil and gas exports from the field would continue as normal.

However, Tullow Oil later cut this year's oil output guidance after the setback at the Jubilee field, but said it had a plan to restore output.

The plan, which needs approval from the Ghanian government, would result in the company spending between $305 million to $355 million (excluding fees related to a buoy) on the field this year and next. All these costs including production losses would be recouped via insurance, the company said.

The Hull and Machinery policy, which is procured on behalf of the joint venture, covers relevant operating and capital costs associated with both current operating procedures at the FPSO and the long-term solution, Tullow said Friday.

As operator of the Jubilee field, Tullow will now work closely with the loss adjusters and reinsurers to establish an efficient payments schedule as remedial work continues, it said.

Tullow said it also continues to work with its Business Interruption reinsurers on confirming cover for loss of production and revenue caused by the turret bearing failure.

Write to Razak Musah Baba at razak.baba@wsj.com; Twitter: @Raztweet

(END) Dow Jones Newswires

September 23, 2016 02:49 ET (06:49 GMT)

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