Paul McDade, Tullow Oil Group CEO
Local shareholders of Tullow Oil Plc on Wednesday expressed discontent at management’s decision not to pay dividend to them for the 2016 financial year.
The company announced that dividend payments were not possible for the period under review due to some financial constraints.
Tullow Oil’s profits declined by eight percent between 2015 and 2016, and this represents a drop from $591 million to $546 million within one year.
This led to an after-tax loss of about $600 million at the end of 2016.
Although Tullow said it made profit in its operations in Ghana, payment of dividend to shareholders has not been done.
A disgruntled shareholder blurted: “The staff of Tullow is benefitting, you are doing the corporate social responsibility, you are doing all those things…but the sweetness of the pudding is in the eating, can we have a little of the pudding to eat please.”
Another shareholder said the company cannot continue keeping their benefits with the explanation that oil prices in the world market have dipped.
The shareholders told the company to reduce its corporate social responsibility (CSR) and re-channel the funds into the payment of dividend.
Reacting Tullow Group CEO, Paul McDade said when the oil prices dipped in 2014, the company was already working on the $4 billion Tweneboa, Enyeba, Ntomme (TEN) field offshore so it could not stop its investment.
A decision, Mr McDade said, was then taken to reset the company, suspend dividend, and curtail exploration activities, which led to a reduction in the number of staff by 40 percent.
The Tullow Group CEO said these measures were taken to ensure that the company had the right liquidity to see to the development of the TEN field.
Chairman of Tullow Ghana and Kenya, Ike Duker added that the company was at “pains” when it decided to suspend payment of dividend to shareholders.
He expressed optimism that payment would be reinstated if the oil industry recovers from the price shock.
“We are seeing how quickly the industry will recover so that we can reinstate the dividend.”
According to Charles Darku, CEO of Tullow Ghana, the company was working closely with the Ghana Gas company to optimize gas supply in Ghana.
The joint venture project, led by Tullow Ghana, would produce about 300 million barrels of oil over its lifetime, approximately 20 years.
By Samuel Boadi