Tullow: Jubilee Insurance Will Pay Out
UK-listed Tullow Oil said September 23 that an insurance policy covering a fault on its Jubilee field producer ship, offshore Ghana, will definitely pay out.
The news will be a relief to all Jubilee joint venture partners: Tullow, US firms Kosmos and Anadarko, Ghana state GNPC, and South Africa's PetroSA. Jubilee produces oil and associated gas, the latter being piped onshore to Ghana.
Tullow said the Hull & Machinery insurance cover has been confirmed for the FPSO Kwame Nkrumah by its reinsurers, following the failure of the turret bearing earlier this year. It said the policy was procured on behalf of the Jubilee joint venture and covers relevant operating and capital costs associated with both current operating procedures at the FPSO and the long-term solution. As operator of the Jubilee field, Tullow said it will now work closely with the loss adjusters and reinsurers to establish an efficient payments schedule as remedial work continues. Tullow added that 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.
The Jubilee producer ship offshore Ghana (Photo credit: Tullow Oil)
Tullow remains in talks with Ghana's government about an 8-12 week shutdown of Jubilee during 1H2017 to effect a long-term solution to the turret bearing problem. In order to mitigate the resultant shortfall of associated gas flows from Jubilee to shore, the company has offered to bring forward first gas by several months to late 2016 from the nearby TEN field, which produced first oil this August.