Tullow Oil share price buoyant ahead of Ghana dispute ruling

on Apr 24, 2015
Updated: Oct 21, 2019

**Latest Update (26 April):**

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Tullow says Ghana Oil Project can move ahead after court ruling.
“Following this ruling, the TEN project can move ahead and we will now await instructions from the Government of Ghana with regard to implementing those provisional measures that have been ordered by ITLOS,” a Tullow spokesman said.

Tullow Oil Plc (LON:TLW) shares rose well above the market this week, as investors and analysts alike were confident that the company’s operations will not be hindered by the International Tribunal for the Law of the Sea’s ruling that is due on Saturday. The Tribunal will judge on the disputed maritime border between Ghana and Côte d’Ivoire – a conflict which has caused alarm in Tullow and had earlier hurt its share price.
Tullow’s shares had surged 2.15 percent to 426.80p as of 13:20 BST today, outperforming its bigger London-listed peers and the FTSE 100 blue-chip benchmark. The company’s stock has risen more than 18 percent so far this year, and seven percent this week alone, though it is still less than half of what it used to be two years ago.
The dispute at hand concerns the unspecified maritime border between the two African nations, and an adverse decision by the Tribunal could cause work at the so-called Ten fields to cease for up to two years while the case is considered. A two-year suspension will wipe as much as 16 percent of Tullow’s value, Goldman Sachs argued. Tullow owns about half of the project (which it has tried unsuccessfully to sell) and it is expected to produce up to 80,000 barrels of oil per day once fully operational.
When the dispute between Côte d’Ivoire and Ghana was first brought before the Tribunal earlier in March, eight percent of Tullow’s valuation dropped on the day (though it has since recovered). Soon after that the company dropped out of the FTSE 100 and had its stock rating downgraded by Moody’s, not least because of the maritime border dispute between the two African nations.
However, analysts were mostly in agreement that a compromise ruling will be made by the Tribunal, allowing work to continue at least until the case is finally settled. Goldman Sachs, meanwhile, also noted that in the context of the Shell’s £47bn recommended offer for BG Group, Tullow could also court takeover interest in the near future.
As of 14:59 BST, Friday, 24 April, Tullow Oil plc share price is 423.55p.


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