Business

Tullow in 'important' oil discovery off South America

  • 9 September 2011
  • From the section Business

Oil has been discovered off the coast of French Guiana, exploration firm Tullow has said, potentially opening a major crude region in South America.

Although no details were given of the potential crude resources, Tullow's exploration director Angus McCoss, said it was "an important new discovery".

Drilling would continue, with further updates in coming months, he said.

Tullow, whose shares ended Friday 15% higher, partners Royal Dutch Shell and Total in the project.

Tullow has made significant discoveries off Ghana and Sierra Leone in West Africa, and was exploring across the Atlantic to French Guiana because there were similar rock formations.

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, which is leading the exploration, plans to drill another well in neighbouring Guyana next, and the French Guiana find makes success there look more likely.

In a separate statement, Shell's executive vice president for exploration and commercial, Dave Lawrence, welcomed the discovery.

"We are early in the evaluation, but the initial results are encouraging for this new play. The joint venture will continue to drill ahead, evaluate the well results, and determine next steps," he said.

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