Addis Ababa (HAN) December 4, 2014. Public diplomacy and National Investment news. Following sustained rumours of a possible takeover, London based and Africa’s leading independent oil company, Tullow Oil, has seen further drop in its share price. The oil exploring company witnessed a 10 percent drop in its share price from 464.9 pence to 418.90 pence on Thursday.
The recent fall in share price is not alien to the company. Since a peak in June, it has witnessed a sustained fall period, slowly been erasing any gains it had previously recorded.
Fears that oil exploration firms could shelve work due to the drop in the commodity’s price on the international market has been tabled as a key reason for the gradual drop in share price. Currently oil prices are on a fringe of about $70 per barrel. This falls $20 short of the $90 per barrel level analysts say is the least price needed to sustain local development.
But Tullow, according to Aiden Heavey, the company’s founder and CEO, isn’t willing to succumb to market pressures just yet. Aiden believes the company can weather its current storm. Tullow has had quite a success in its northern Kenya operations having struck eight wells with positive finds out of 11 drilled. “Our exploration-led growth strategy continues to be successful with major discoveries onshore Kenya and a new potential basin offshore norway,” Aiden said.
On Monday, the Financial Times of London reported the pending loss of about 1000 jobs in the company due to end of seismic survey or exploration as the company plans to explore new assets and operations. “With the end of seismic surveys, Tullow expects to let go of about a third of its 3,000 employees and contractors, and it is not clear how impoverished local communities will respond after coming to rely on the oil industry for much-needed jobs and social services,” the reported explained.
The company said the reduction of staff numbers at the end of seismic activities is not an unusual occurrence as it has happened in previous times. Naturally, as specific activities end on some sites, locals in that area will lose their jobs.
VENTURES AFRICA By Hadassah Egbedi
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