Tullow Oil Plc (LON:TLW) shares surged this morning, after the weekend ruling by the International Tribunal for the Law of the Sea (ITLOS) rejected Côte d’Ivoire’s demand that work on a Tullow-operated field in disputed waters off the coast of Ghana be stopped.
Tullow’s shares had jumped 4.43 percent to 436.50p though they had earlier surged as much as nine percent.
The company’s stock is still down more than 40 percent on an annual basis. ITLOS, based in Hamburg, Germany, on Saturday told Ghana not to begin any new drilling in the disputed waters, but ruled that existing work should continue, as the opposite would risk “considerable financial loss” to the nation.
The tribunal also advised the two African nations to “pursue co-operation and refrain from any unilateral action that might lead to aggravating the dispute”.
Côte d’Ivoire had requested all work be stopped until the final verdict, expected in late 2017. Such a ruling would have been a massive blow to Tullow, owner of about half of the so-called TEN Project, which is located in the disputed waters.
Tullow released a statement today, noting ITLOS’ decision. The company said work on the TEN continues and is 55 percent complete, with the project “within budget and on schedule with first oil expected in mid-2016”.
When the dispute between Côte d’Ivoire and Ghana was first brought before the Tribunal earlier in March, eight percent of Tullow’s valuation dropped on the day, while Goldman Sachs argued that a two-year suspension of work at TEN, as demanded by Côte d’Ivoire, would have wiped as much as 16 percent off Tullow’s value.