Africa-focused Tullow Oil is stepping up its plans offshore South America after divesting interests in its Norwegian assets and exiting other areas.

The London-based E&P, which operates the TEN fields and its flagship Jubilee Field offshore Ghana, said it plans to drill the Araku prospect offshore Suriname, the smallest country in South America, in second-half 2017.

“This prospect is a large structural trap which has a resource potential estimated at over 500 MMbo [million barrels of oil],” the company said Feb. 8 in its 2016 full-year results. “It has been significantly de-risked by a 3-D seismic survey carried out in 2015, which identified geophysical characteristics that are consistent with potential oil or gas effects in the target reservoirs.”

Tullow is among the oil and gas companies that have kept some new frontiers in their exploration schemes, despite unfavorable market conditions that caused many to slow exploration spending. In 2016, Tullow halted frontier exploration efforts in Ethiopia, French Guiana, Greenland, Guinea, Madagascar and Norway.

“As we focus our free cash flow primarily on reducing our debt, capital discipline remains critical,” said CEO Aidan Heavey, who will take over as chairman when Paul McDade becomes CEO. “We have made excellent progress with our East African developments and are building a high-quality exploration portfolio to grow our business.”

With more than 25 exploration wells drilled offshore, Suriname has been described by state oil company Staatsolie as “virtually underexplored.” Commercial production has only come from onshore fields, which together produce about 17,000 barrels per day (bbl/d) of oil.

Tullow has interests in two licenses offshore Suriname covering a total of 10,849 sq km (4,189 sq miles). These include Block 54, where the Araku prospect is located, and the nearby Block 47. A drop core survey spanning the blocks was completed last year.

The company has said its Jubilee play could expand from West Africa across the Atlantic Ocean to   Block 47. That was the case for Tullow offshore French Guiana, where the Zaedyus exploration well hit oil in two turbidite fans five years ago. At the time, Tullow said the objective of the well was to test whether the Jubilee play was mirrored on the other side of the Atlantic.

Although the oil discovery offshore French Guiana opened a new hydrocarbon basin and helped lower exploration risks in nearby Suriname and Guyana, Tullow eventually shifted focus to Suriname after an unsuccessful drilling campaign in 2013. Other Suriname players include Apache Corp. (NYSE: APC), Cepsa, Chevron Corp. (NYSE: CVX), DEA, Kosmos Energy, Noble Energy Inc. (NYSE: NBL), Petronas, Statoil ASA (NYSE: STO) and  Staatsolie, which has invited others to farm in to blocks B and C—both located closer to the shoreline in water depths of up to 30 m offshore Suriname.

Citing a 2012 U.S. Geological Survey report, Staatsolie said the Guyana-Suriname Basin has an estimated resource potential of 13.6  Bbbl, placing it among the world’s largest basins in terms of prospectivity.

Many are already closely watching activity west of Suriname--offshore Guyana--where ExxonMobil’s exploration work in the Stabroek Block has pointed to recoverable resources of more than 1 Bboe.

Tullow, which has interest in two licenses offshore Ghana, said it plans to acquire 3-D seismic data over the offshore Orinduik license, which is updip of ExxonMobil’s Liza oil discovery.

Elsewhere offshore South America, Tullow said it began a 2,500-sq km (956-sq mile) 3-D seismic program offshore Uruguay. The company aims to “capture data over high-quality leads identified in Block 15 in the Pelotas Basin.”

In addition, Tullow said it plans to acquire another 680 km (423 miles) of 2-D seismic data offshore Jamaica. This follows the completion of a drop core and seep study in the Walton Morant blocks, which identified a live oil seep, the company said.

While the company works to build its exploration portfolio, it is still coping with the downturn’s aftermath.

Tullow reported an operating loss of $754.7 million for 2016, down 31% from 2015’s loss of $1.09 billion. The company’s exploration write-offs totaled $723 million in 2016.

Lower oil prices hit revenue, which dropped 21% to about $1.3 billion, despite bringing the TEN fields into production. Working interest production was down 9% for the year, averaging 67,100 boe/d.

“The impact of first oil from the TEN fields was offset by reduced production from the Jubilee Field as a result of the Turret Remediation Project, declines in U.K. and Netherlands gas production, as well as reductions across the nonoperated West Africa portfolio,” Tullow said.

The company reported capital investment of about $900 billion in 2016, mostly for development activities in Africa.

“2016 is likely to mark the low tide point for Tullow, with production set to increase in 2017 into a rising oil price environment," Mirabaud Securities analysts said in a Reuters article.

The analysts added that Tullow should be able to reduce its debt pile, which increased to $4.78 billion by year-end 2016 up from $4.02 billion, primarily due to TEN expenses.

Moving forward, Tullow said it intends to control capex, dropping spend to $500 million in 2017 from $900 million last year. Exploration and appraisal spending will be limited to about $125 million.

Velda Addison can be reached at vaddison@hartenergy.com.