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Business News of Monday, 14 January 2013

Source: B&FT

Jubilee close to peak production

Crude oil production from the Jubilee field is inching close to its peak of 120,000 barrels per day, after two new wells were started and existing well challenges were resolved, Tullow Oil Plc, principal field operator, has said.

The company now has working-interest production of 39,000 barrels per day in the field, according to a trading statement issued last Thursday.

“Jubilee production issues were successfully and cost-effectively resolved and gross production from the field is now around 110,000 bopd,” chief executive Aidan Heavey commented in the statement, which also revealed that the production capacity of the wells has actually exceeded 120,000 barrels per day, allowing the current FPSO capacity to be tested over the coming weeks.

Tullow had said last year it was expecting to reach peak production at Jubilee in 2013, after missing previous timelines due to well problems. It plans to drill more than 40 wells across its operations this year, representing an investment of US$0.9 billion, with two of the wells – Enyenra-6A and Sapele – located in the Deepwater Tano licence in Ghana.

Exploration and appraisal of wells will also be continued in the emerging East African energy frontier, where Tullow has licences in Kenya, Uganda and Ethiopia.

The gradual surge in output at Jubilee gives indication of a healthy outlook for the oil sector, which has become an important economic-growth driver and revenue source for government. The inability of Jubilee to ramp up production to 120,000 barrels per day in 2012, as Tullow had projected initially, partly explained the downward revision of the growth forecast by the Ghana Statistical Service (GSS).

In September, the GSS projected that the economy would expand by 7.1 percent in 2012, sharply revising an earlier forecast of 9.4 percent. In 2013, real Gross Domestic Product (GDP) is seen rising at 8-9 percent, interim Finance Minister Dr. Kwabena Duffuor said.

More than 15 oil wells will come on stream in four to five years from blocks currently being explored or developed, said Dr. Albert Kofi Asamoa-Baah, a senior advisor at the Finance Ministry in an interview in Accra on November 27.

Tullow said it has submitted a Plan of Development to the government for the Tweneboa-Enyenra-Ntomme (TEN) wells, which has boosted its total commercial reserves to 380 million barrels of oil equivalent (mmboe).

At least US$4 billion is expected to be invested in TEN’s development by Tullow – which owns a 49.95 percent stake – and its partners, including the Ghana National Petroleum Corporation (GNPC).