Tullow Oil names Paul McDade its new CEO
London — Africa-focused oil producer Tullow Oil said chief operating officer Paul McDade will be its next CEO, replacing founder Aidan Heavey who will become chairman.
In a separate trading statement, the oil producer said on Wednesday that 2016 full-year revenue was expected to have fallen 19% year on year to $1.3bn as weak oil prices continued to eat into sales.
Tullow also said production from its new TEN oilfields in Ghana was expected to average 50,000 barrels a day this year, lower than previously expected, due to problems with managing pressure in one of the reservoirs.
The fields started pumping oil in mid-August and once at full capacity they will be able to produce 80,000 barrels a day.
McDade’s appointment, which will take effect after the company’s annual general meeting on April 26, means Heavey, CEO for 31 years, will gradually retire from the company he set up as his chairmanship is limited to two years.
Earlier this week French oil major Total agreed to buy a stake in a Ugandan project from Tullow for $900m, as a recovery in crude prices accelerates the pace of deals in the energy industry.
Total will acquire a controlling stake in the Lake Albert development, the companies said on Monday.
Total will pay an initial $100m in cash, with another $100m split equally when the project gets sanctioned and when it first starts pumping oil. The remaining $700m is a "deferred consideration", used by Tullow to fund its share of the costs.
Heavey said he hoped the deal would increase the likelihood of the project being sanctioned this year so that first oil can happen by the end of 2020.
Tullow will no longer be the principal operator of the development in Uganda once the deal closes.
UK-listed Tullow will write down about $400m following the asset sale, an amount to be included in its full-year results. That amount "should largely be considered as noise" as the deal confirmed RBC Capital Markets’ asset valuation, said Al Stanton, an analyst at the bank.
The agreement is backdated to January 1.
Reuters and Bloomberg