Oil and gas output is now being added to an already buoyant economy. Hydrocarbon production will generate income that can help the government to balance its books and fund national infrastructural and social projects. Yet it can also provide the energy resources needed to diversify the economy, create skilled employment and further Accra’s aim of turning Ghana into a middle-ranking economy. By Neil Ford.
The first substantive commercial oil production came in 2010 from the Jubilee Field, which spreads over both the Deepwater Tano and West Cape Three Points offshore blocks. Investors comprising Tullow Oil, Kosmos Energy, Anadarko, state-owned Ghana National Petroleum Corporation (GNPC) and Sabre Oil & Gas, which is now owned by South Africa’s Petro SA created a joint consortium to develop Jubilee.
As a deepwater field, production is via a floating production storage and offloading (FPSO) vessel, which has been named the Kwame Nkrumah. The Jubilee project is to be developed in two phases, with each aiming to produce 125,000 b/d, although output during the early years of Phase 1 has fallen below target. Technical problems, including on the FPSO’s water injection system, initially held back production but output averaged about 100,000 b/d last year.
Minister of Energy, Emmanuel Armah Kofi Buah has revealed that improvements on five of the nine Jubilee production wells have boosted output. Accra is already benefiting from oil revenues, earning $1.4bn wby mid-2013, as oil overtook cocoa as the country’s second-biggest source of revenue.
By 10 September, 77m barrels had been produced on the field, of which 13m barrels were allocated to the GNPC. A string of other projects should add to national oil production. A development plan for the deepwater Tweneboa, Enyenra and Ntomme (TEN) project, which is located 30km west of the Jubilee Field on the Deepwater Tano area has now been agreed, with first production due in 2016.
As on Jubilee, an FPSO will be utilised and associated gas piped from the vessel to the onshore Atuabo gas processing plant. Reserves on the TEN fields are put at up to 500m barrels, which should yield production of 76,000 b/d of crude oil and 170m cubic feet of natural gas a day.
Aidan Heavey, the chief executive of Tullow, commented: “This is an important project that will give Ghana its second major offshore development. The government of Ghana has set us a number of important targets around local content and supply chain. I have every confidence that we will meet these targets.” The project is being developed by Tullow (47.175%), Kosmos Energy (17%), Anadarko Petroleum (17%), Sabre Oil & Gas (3.825%) and the GNPC (15%).
Aside from projects being developed by the Tullow-led consortia, additional oil production should come from fields operated by Italian firm Eni, including on the Offshore Cape Three Points (OCTP) Block. Eni holds a 47.62% stake in the venture, alongside partners Vital (37.38%) and GNPC (15%).
Production is expected to reach 50,000 b/d of crude oil and 160m cubic feet a day and it has been suggested that much of the gas could be dedicated for use at the Aboadze power plant. Eni estimates recoverable reserves on OCTP at 1.1 trillion cubic feet of gas and 150m barrels of oil.