Ghana has formally approved the first development phase of giant Jubilee oil field, which will tap 300 million bbl and is to begin producing in the second half of 2010.
Tullow Oil PLC, which operates the deepwater Tano block that contains part of the field, said Ghana’s energy ministry had also sanctioned the unitization agreement.
Jubilee will come on stream via a floating, production, storage, and offloading vessel with a plateau oil rate of 120,000 b/d, water injection capacity of 230,000 bw/d, and gas export and injection capacity of as much as 160 MMscfd.
“By securing rig capacity and commencing the construction and drilling phases in advance,” said Paul McDade, Tullow Oil chief operating officer, “Tullow is confident that it will deliver first oil from this deepwater project just over three years since the first discovery well was drilled.”
The unitization agreement will allow the partners to reallocate their shares in the Jubilee unit as further field data become available.
Currently, Tullow’s share is 34.7%. Other partner interests are Kosmos Energy 23.49%, Anadarko Petroleum Corp. 23.49%, Sabre Oil & Gas 2.81%, EO Group 1.75%, and Ghana National Petroleum Corp. 13.75%.
Kosmos Energy operates the West Cape Three Points block, which Jubilee extends into, and it has secured a $750 million loan from the International Finance Corp. and other banks to fund its share of the first phase of the project.
Kosmos will have to repay the loan by December 2015.
Financing confidence
W. Greg Dunlevy, Kosmos executive vice-president and chief financial officer, said the loan was a major achievement considering the drying up of the credit market. “This is evidence of the confidence of the international financial community in Kosmos’ team of seasoned executives and employees, as well as its strong support of investment in the emerging Ghanaian oil sector.”
Kosmos operates the West Cape Three Points block and drilled the Mahogany-1 exploration well in 2007 which discovered Jubilee field. It has drilled seven consecutive successful exploration and appraisal wells, which has proved oil in all of them.
Although it has the cash to proceed with Jubilee, Kosmos has been dogged by reports of seeking buyers for its interests in the Ghanaian licenses it holds. Companies rumored to be interested include GNPC and India’s Oil & Natural Gas Corp.
Industry sources told OGJ that Kosmos did not need to sell its assets because it has obtained funding. A company spokesman told OGJ that its strategic alternative process continues. “Our debt placement was an integral part of the process,” he said.