Ghana has commenced oil production and export right on schedule raising the country’s economic growth potentials, reports TOMA IMIRHE
Finally, Ghana has become an African oil producer. In December last year, Tullow Oil and its partner companies kept to their promise of commencing oil production before the end of 2010, with a lavish official first oil pour ceremony on December 15.
The significant of the ceremony was illustrated by the fact that it brought together the incumbent President of Ghana, John Atta Mills, and his two predecessors, Jerry John Rawlings and John Agyekum Kufuor, for the first time since American President Barrack Obama visited the country in mid-2009. Considering that there is little love lost among the three men, this emphasizes just how much the Jubilee oilfield means to Ghana.
Initial production from the Jubilee Oilfield off the shores of Cape Three Point in the Western Region of Ghana is just 55,000 barrels per day (bpd) but by the second quarter of this year, production is expected to rise to and stabilize at 120,000 bpd.
The Jubilee field was discovered in June 2007 and was developed up to production stage in a record time of just three and a half years, compared with five to seven years usually required for such a project. The Jubilee partners are Tullow Oil (34.70%), Anadarko Petroleum Corporation (23.49%), Kosmos Energy (23.49%), Ghana National Petroleum Corporation (13.75%), Sabre Oil and has (2.81%) and E.O. Group (1.75%).
The first cargo of oil from the Jubilee Field for export to the international market, made up of 650,000 barrels of light sweet crude, is scheduled for January 2011. It is being lifted by Tullow Oil, the lead partner in the Jubilee oilfield project, through Vital S.A., a global oil trader and transporter, which has been on a contract to be the exclusive marketer of Tullow Oil’s share of production from the Jubilee Field.
Tullow Oil is bullish on all this, saying that Jubilee crude will be highly attractive to refiners around the world, including North America, Europe and the Far East. So is the Government of Ghana, although for a different reason. To be sure, its 2011 budget estimates oil revenues at just GH¢584 million which is a mere 6% of its total anticipated revenue for this year. However this is because the production is just starting from the second half of the year, production will be more than twice what it is now and this means much bigger revenues in subsequent years. Besides, with oil prices surging again, even this year’s oil export revenues may turn out to be higher than anticipated, since the budget projections were arrived at using an expected oil price of well below US$80 a barrel, whereas light crude prices have climbed to about US$90 currently.
More importantly, though government is looking to the economic knock-on effects of oil production to fuel unprecedented growth in Ghana’s real Gross Domestic Product. While the government is targeting GDP growth from the non-oil economy of 7% for 2011, it expects the oil industry to add on another 5.3% to this bringing total real GDP growth to a record high of 12.3%. This would result from huge new investment and activities in both the upstream and downstream sectors of the oil and gas industry.
Already, government is looking up to establishing a petrol-chemicals industry, which will feel into the production of plastic products and pharmaceuticals. It is using the industry for the exploitation of important natural resources such as sea salt, iron ore, bauxite, limestone for cement, silica sand, pethonal, ethanol, ammonias’ and wee for fertilizers. Add to this manufacturing including the production of glass bottles, steel mills operations, and aluminium smelting, and rolling mill operations.
Key to much of this though are the plans to exploit the gas that is being released in conjunction with the Jubilee oil. Phase one of the Jubilee project contains an estimated 120 million standard cubic feet (MMscfd) of natural gas of which 20 MMscfd is to be used to power Ghana’s industrialization efforts while leaving up to 100 MMscfd of gas for re-injection or future export.
Ghana’s oil and gas industrialization plan aims to increase electricity generation to 5,000 megawatts (MW) or more within the medium term to power industrial operations. It also aims to spread development to some of the most resource rich yet still deprived areas of the economy such as the Keta and Songhor basins, Ada, Prampram, Sekondi-Takoradi, Axim, Kibi, Nyinhin, Buipe, Yendi, Sandema, Opan Manso and Aboso which will be opened up for heavy industrialization. Just as importantly major manufacturing concerns already in operation will enjoy much cheaper energy, by becoming direct bulk gas buyers, than is currently the case with their purchase of largely diesel oil driven electricity from the national grid.
However government has to get the gas processing and distribution infrastructure up and running first, which is the responsibility of the GNPC.
“It will take some 18 to 24 months to get the gas infrastructure in place,” says Nana Asafu-Adjaye, GNPC’s Chief Executive. In the meantime some of the gas will be used on Floating Production and Storage platform (FPSO) (the Kwame Nkrumah), for power generation. The rest will be injected into the wells to optimize their output.
He also admits that contrary to government’s policy of no gas flaring “there will be a bit of flaring too.”
That will change though when a processing plant is built at Bonyere in the Western Region and a 123 kilometre gas pipeline is constructed linking it with the Aboadze thermal power station near Takoradi.
Next on the agenda is phase two of the Jubilee oilfield which will ultimately doubles oil production to some 250,000 bpd, when it takes off, expectedly in 2013. This involves major new investment by all the Jubilee partners but so far all of them have shown commitment. The only uncertainty is Kosmos Energy, the American firm that made the first Jubilee discovery, but which specializes in exploration rather than production and which has had several squabbles with GNPC which serves not just as an operator but as an oil industry regulator as well. However several major international oil firms including Exxon-Mobile and Chinese National Oil Jubilee Corporation are queuing up to buy the Kosmos stake in the Jubilee.
Finally, Ghana has become an African oil producer. In December last year, Tullow Oil and its partner companies kept to their promise of commencing oil production before the end of 2010, with a lavish official first oil pour ceremony on December 15.
The significant of the ceremony was illustrated by the fact that it brought together the incumbent President of Ghana, John Atta Mills, and his two predecessors, Jerry John Rawlings and John Agyekum Kufuor, for the first time since American President Barrack Obama visited the country in mid-2009. Considering that there is little love lost among the three men, this emphasizes just how much the Jubilee oilfield means to Ghana.
Initial production from the Jubilee Oilfield off the shores of Cape Three Point in the Western Region of Ghana is just 55,000 barrels per day (bpd) but by the second quarter of this year, production is expected to rise to and stabilize at 120,000 bpd.
The Jubilee field was discovered in June 2007 and was developed up to production stage in a record time of just three and a half years, compared with five to seven years usually required for such a project. The Jubilee partners are Tullow Oil (34.70%), Anadarko Petroleum Corporation (23.49%), Kosmos Energy (23.49%), Ghana National Petroleum Corporation (13.75%), Sabre Oil and has (2.81%) and E.O. Group (1.75%).
The first cargo of oil from the Jubilee Field for export to the international market, made up of 650,000 barrels of light sweet crude, is scheduled for January 2011. It is being lifted by Tullow Oil, the lead partner in the Jubilee oilfield project, through Vital S.A., a global oil trader and transporter, which has been on a contract to be the exclusive marketer of Tullow Oil’s share of production from the Jubilee Field.
Tullow Oil is bullish on all this, saying that Jubilee crude will be highly attractive to refiners around the world, including North America, Europe and the Far East. So is the Government of Ghana, although for a different reason. To be sure, its 2011 budget estimates oil revenues at just GH¢584 million which is a mere 6% of its total anticipated revenue for this year. However this is because the production is just starting from the second half of the year, production will be more than twice what it is now and this means much bigger revenues in subsequent years. Besides, with oil prices surging again, even this year’s oil export revenues may turn out to be higher than anticipated, since the budget projections were arrived at using an expected oil price of well below US$80 a barrel, whereas light crude prices have climbed to about US$90 currently.
More importantly, though government is looking to the economic knock-on effects of oil production to fuel unprecedented growth in Ghana’s real Gross Domestic Product. While the government is targeting GDP growth from the non-oil economy of 7% for 2011, it expects the oil industry to add on another 5.3% to this bringing total real GDP growth to a record high of 12.3%. This would result from huge new investment and activities in both the upstream and downstream sectors of the oil and gas industry.
Already, government is looking up to establishing a petrol-chemicals industry, which will feel into the production of plastic products and pharmaceuticals. It is using the industry for the exploitation of important natural resources such as sea salt, iron ore, bauxite, limestone for cement, silica sand, pethonal, ethanol, ammonias’ and wee for fertilizers. Add to this manufacturing including the production of glass bottles, steel mills operations, and aluminium smelting, and rolling mill operations.
Key to much of this though are the plans to exploit the gas that is being released in conjunction with the Jubilee oil. Phase one of the Jubilee project contains an estimated 120 million standard cubic feet (MMscfd) of natural gas of which 20 MMscfd is to be used to power Ghana’s industrialization efforts while leaving up to 100 MMscfd of gas for re-injection or future export.
Ghana’s oil and gas industrialization plan aims to increase electricity generation to 5,000 megawatts (MW) or more within the medium term to power industrial operations. It also aims to spread development to some of the most resource rich yet still deprived areas of the economy such as the Keta and Songhor basins, Ada, Prampram, Sekondi-Takoradi, Axim, Kibi, Nyinhin, Buipe, Yendi, Sandema, Opan Manso and Aboso which will be opened up for heavy industrialization. Just as importantly major manufacturing concerns already in operation will enjoy much cheaper energy, by becoming direct bulk gas buyers, than is currently the case with their purchase of largely diesel oil driven electricity from the national grid.
However government has to get the gas processing and distribution infrastructure up and running first, which is the responsibility of the GNPC.
“It will take some 18 to 24 months to get the gas infrastructure in place,” says Nana Asafu-Adjaye, GNPC’s Chief Executive. In the meantime some of the gas will be used on Floating Production and Storage platform (FPSO) (the Kwame Nkrumah), for power generation. The rest will be injected into the wells to optimize their output.
He also admits that contrary to government’s policy of no gas flaring “there will be a bit of flaring too.”
That will change though when a processing plant is built at Bonyere in the Western Region and a 123 kilometre gas pipeline is constructed linking it with the Aboadze thermal power station near Takoradi.
Next on the agenda is phase two of the Jubilee oilfield which will ultimately doubles oil production to some 250,000 bpd, when it takes off, expectedly in 2013. This involves major new investment by all the Jubilee partners but so far all of them have shown commitment. The only uncertainty is Kosmos Energy, the American firm that made the first Jubilee discovery, but which specializes in exploration rather than production and which has had several squabbles with GNPC which serves not just as an operator but as an oil industry regulator as well. However several major international oil firms including Exxon-Mobile and Chinese National Oil Jubilee Corporation are queuing up to buy the Kosmos stake in the Jubilee.
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