Tullow Oil has slipped back after it temporarily suspended drilling operations in northern Kenya following demonstrations by local communities regarding concerns around employment in Turkana county. Tullow said:
The decision...was taken to prevent further escalation of the demonstrations while discussions to resolve this issue for the long term are ongoing. The company is fully committed to utilising as many local workers and local services as possible, and currently employs over 800 people from the Turkana region out of the 1,400 people currently employed on Tullow's Kenyan operations.
Andrew Whittock at Liberum Capital said:
The key discussions are with local communities and Tullow is confident that the issues are manageable and that a satisfactory solution can be reached with the local communities. Shares look very good value. This is likely to make them look even more attractive.
Tullow is currently down 13p at 965.5p.
Elsewhere Cairn Energy has dipped 1.4p to 279.6p as it agreed with US group Kosmos Energy and the Moroccan National Oil Company to take a 20% stake in an exploration block in the Atlantic. Drilling on the Cap Boujdour site off Morocco is due to start in the second half of 2014. Analyst Justin Jordan at Jefferies said:
Cairn has announced a Moroccan farm-in agreement with Kosmos, adding further frontier exploration acreage to its Atlantic Margin portfolio. In addition, Cairn's long awaited 12-month multi-well high-impact exploration programme has commenced, targeting over 4bn barrels of oil equivalent, offering material upside potential. The shares' current 33% discount to our overall Cairn valuation offers an appealing entry point, in our view.
