Govt approves US$1.9bn for Greater Jubilee devt
The government has given Tullow Oil Ghana Limited and its joint venture (JV) partners the green light to use US$1.9 billion to integrate the Mahogany and Teak discoveries with the Jubilee Fields into the Greater Jubilee.
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Known as the Greater Jubilee Plan of Development, (PoD) the expenditure itemisation and revenue estimates were approved on October 20 after an earlier one was rejected for being “too expensive”.
The earlier PoD quoted the full cost of development at US$2.3 billion.
Tullow Ghana said in an email that the current approval now “paves the way for the partners to start the integration process next year”.
The project will deliver additional 140 million barrels of oil, the company said in response to questions from the paper on the approval of the PoD.
Although an investment, the US$1.9 billion expenditure will be recouped as capital gains once full development is completed and commercial production on the integrated project commences.
Cost breakdown
It added that the development process would take about three to five years to complete, within which some seven to 14 wells will be drilled.
“The Greater Jubilee Plan of Development, which was approved on October 20, 2017, will be an integrated development of the resources of Mahogany and Teak, as well as the remaining resources of Jubilee,” the company said.
It explained that the project would be executed in three phases at the approved cost of US$1.9 billion.
On the cost breakdown, Tullow said: “Two-thirds of the investment will be spent on drilling and completion of wells and one-third on subsea infrastructure to tie the wells to the FPSO.”
Number of wells
Under the PoD, the JV partners are expected to integrate the two discoveries into the Jubilee Fields production and floating vessel to help extend the field’s lifespan and increase its commercial reserves.
The development includes the drilling of seven to 14 wells, with room to increase it to “29 on Jubilee depending on the results of the initial wells”.
The company added that the partners were already in the final stages of securing a rig that would be used to drill the wells early next year.
On the impact to the fortunes of the partners the national economy, Tullow said: “The project will develop the remaining reserves of Jubilee plus Mahogany and Teak.”
“This will extend the life of Jubilee and deliver more oil and gas for Ghana and the Joint Venture partners.”
Jubilee Fields FPSO
The Mohogany and Teak areas are outside the Jubilee Fields’ ring-fenced area but closer to Jubilee Fields, which is the country’s maiden commercial field.
Discovered in 2007, the Jubilee Fields straddles the West Cape Three Points (WCTP) and the Deep Water Tano licences, which are held separately by Kosmos and Tullow Ghana respectively.
Following the discovery, the two partners made extra four drillings in Hyedua 1&2 and Mahogany 1&2.
The drillings were five kilometres apart and revealed that the Jubilee Fields extended to such areas, making it a commercial discovery.
This prompted the government to ask the two companies to develop Jubilee but undertake full appraisals to discover the full extent of the field.
Those appraisals have now concluded that the nearby reserves could be integrated into the Jubilee Field and produced through the current FPSO Kwame Nkrumah.