Tullow Oil discovers new well in Uganda
Tullow Oil, the London-based Irish exploration company, has discovered a further oil well in Uganda, cementing the
company's optimism that the East African country could become a major oil producer.
Meanwhile, Petroceltic International, a smaller Irish-based exploration company, said that it had made progress in
its search for gas in Algeria.
Tullow's engineers found the oil in the Butiaba region which is close to the Congo and was the scene of a plane crash
which almost killed the American writer Ernest Hemingway. Tullow and partner Heritage Oil are now preparing to drill
for oil later this year, Exploration Director Angus McCoss said. Tullow has found oil at 24 out of 25 sites where it
has drilled in the area around Lake Albert.
The discovery is a further step in Tullow's campaign to become the biggest player in Africa's oil business. The
company, which is also looking for oil in 14 other African countries, has found large quantities in Ghana. The
company is investing about $ 3.1 bn with partners to start crude extraction in Ghana next year.
"This is a small discovery," said Rohit Agarwal, a London-based analyst at UBS who has a "buy" rating on Tullow, in a
note to investors. "The more important takeaway for us is that Tullow maintains its excellent track record of 90
%-plus drilling success in the region."
The well was found three km from another Tullow well and then drilled to a total depth of 741 metres and has been
successfully logged and sampled, Tullow said. Tullow has said previously that it believes there are more than 700 mm
barrels of oil in the area which would allow for commercial development.
Petroceltic said, meanwhile, that it had encouraging results from a drilling exercise in Algeria where it is looking
for gas.
"We are pleased that our Isarene drilling operations are on time and on budget," said chief executive Brian O.
Cathain. Further tests will be carried out in September. The company is now moving drilling equipment to a second
well in the area.
