At a Glance
- Tullow Oil’s reserves fell 11% in H1 2025, highlighting dependence on Ghana assets.
- Licence extensions could unlock 18.2 million barrels, boosting reserves at Jubilee and TEN.
- Heavy debt, tax disputes, and weaker oil prices add financial strain to operations.
Tullow Oil Plc, the Africa-focused London-listed oil and gas explorer, reported an 11 percent drop in reserves for the first half of 2025 as it negotiates with Ghana to extend licences for its Jubilee and TEN fields, the company’s two core assets.
As of June 30, Tullow’s proved and probable reserves, excluding Gabon, stood at 113.8 million barrels of oil equivalent, down from 128.5 million at the end of 2024. The decline was driven by 7.4 million barrels of production in the first half and 7.3 million barrels in revisions, mostly linked to well performance at Jubilee and TEN.
Licence extension could unlock new reserves
The company, founded in Tullow, Ireland, with its headquarters in London, United Kingdom, sees a way to recover part of the loss. If licence extensions are agreed with Accra, nearly 18.2 million barrels of contingent resources could be reclassified as reserves in a country where it stands as the largest operator.
A memorandum of understanding signed in June laid the groundwork for a development plan covering new drilling, enhanced recovery and gas commercialization. Reserves auditor TRACS International estimates the extensions could add 14.7 million barrels from Jubilee and 3.5 million from TEN.
Tullow has been laying technical groundwork to support this. A 4D seismic survey was completed in the first quarter, and an Ocean Bottom Node survey is scheduled later this year to identify untapped reserves and sharpen drilling plans.
Financial pressure adds to operational challenges
The decline comes as the London-listed explorer faces financial strain. Tullow carries heavy debt while it works to simplify its portfolio, including the sale of its Gabon assets.
Tax disputes and arbitration cases with the Ghanaian government have added pressure, while weaker oil prices earlier in the year weighed on earnings.
Dhir, who has led the company since 2020, stressed the stakes in Ghana. “The licence extensions are pivotal,” he told investors. “They secure our ability to invest in new wells, unlock volumes, and deliver sustained value for Ghana and shareholders.”
Pathways to growth
If negotiations conclude successfully and surveys confirm new drilling opportunities, Tullow could rebuild reserves to above 130 million barrels.
A phased drilling program and partner contributions would help ease funding needs. But prolonged talks or disappointing survey results could deepen concerns about declining output.
Ghana remains the centrepiece
Since the landmark Jubilee discovery in 2007 and first oil in 2010, Ghana has anchored Tullow’s business.
The TEN fields, which began production in 2016, reinforced that reliance. Today, almost all of Tullow’s output comes from the country, making the outcome of licence talks and drilling plans central to its future.
