September 9, 2011 / 7:55 AM / 6 years ago

Tullow strikes oil in French Guiana

LONDON (Reuters) - London-based explorer Tullow Oil (TLW.L) said it had struck oil offshore French Guiana, raising the prospect of the opening of a new major offshore oil producing province in South America.

Tullow shares traded up 7.0 percent at 8:06 a.m.

The company, and others, have made big discoveries offshore Ghana, namely the multi-billion barrel Jubillee field, and an oil strike in Sierra Leone that suggests the finds extend all along the coast.

Tullow’s Zaedyus well in French Guiana, drilled in over 2,000 metres of water, was tapping rock formations laid before Africa and South America separated millions of years ago.

The company and partners Royal Dutch Shell Plc (RDSa.L), with 45 percent and France’s Total (TOTF.PA) with 25 percent, believed the oil-rich West African geology would be replicated in South America.

“The discovery at Zaedyus has proved the extension of the Jubilee-play across the Atlantic and made an important new discovery in French Guiana,” said Tullow’s exploration director Angus McCoss.

Tullow, Europe’s largest listed explorer by market capitalisation, plans to drill another well in neighbouring Guyana next, and the French Guiana find makes success there look more likley.

Tullow operates the Guyane Maritime licence and holds a 27.5 percent stake. Northpet -- a company owned by Northern Petroleum and Wessex Exploration -- with a 2.5 percent holding.

“We are pleased with the preliminary results of this first ever deepwater well offshore French Guiana,” said Dave Lawrence, executive vice president of exploration and commercial at Shell. “We are early in the evaluation, but the initial results are encouraging for this new play.”

The well was drilled to a depth of 5,711 metres and drilling will continue beyond 6,000 metres.

Editing by Paul Sandle and Mike Nesbit

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