Know How Much Each Partner Has Spent

Development of Ghana’s Jubilee Oil Field

By J. Ato Kobbie, Managing Editor

Oil exploration and production is said to be a tortuous and expensive venture, therefore those considering to enter into that line of business ought to brace themselves, especially when their exploratory endeavours have yielded positive results.

The Business Analyst can authoritatively state that as of the beginning of the year 2010, the partners in the Jubilee Field, excluding the Ghana National Petroleum Corporation (GNPC), had altogether spent about 2.4 billion US dollars in the various processes towards the oil production slated to commence in the last quarter of this year.

Of the amount, $1.3 billion was spent on the West Cape Three Points (WCTP) block, whilst $1.1 billion was spent on the Deepwater Tano (DWT) block.
The two blocks were, before the consolidation of operations under a unitization programme, independently operated by Kosmos Energy and Tullow Oil respectively.
The Operator of the Jubilee Field, Tullow Oil, which is the majority stakeholder in the field with 34.7046%, is the leading spender in the field and had contributed almost $900 million to the total expenditure as of the beginning of this year.

The other major spenders in the field are Kosmos Energy and Anadarko, each of which had contributed US$630 million to the total expenditure at the beginning of the year. Out of the amount, about 70% was spent on the Kosmos-operated WCTP Block, where each of them holds a 29.9827% stake, which together with their 17% stake each in DWT has translated to a 23.4913% hold in the Jubilee field each.
Sabre Oil and Gas, with their 2.8127% stake in the unitized field, had contributed US$72 million, whilst the EO Group, the only partner with a stake in only the WCTP block, contributed US$50 million of the expenditure.
Over 50% of the expenditure by the companies was incurred in 2009.

It is estimated that a total of US$5 billion investment would be required to facilitate the production of oil in the Jubilee Field, which is estimated to have a reserve in the range of 800 million to 1.5billion barrels of crude oil, under the first phase.

Under this phase of production, some 120,000 barrels of crude oil per day is targeted, whilst the second phase, scheduled to commence in 2013, will see double that quantity of oil produced with additional infrastructure.

The second phase will also require an additional $5 billion worth of investment.

A total of 17 wells, comprising nine production wells, two gas injection wells and six water injection wells – all to be tied back via subsea infrastructure to the FPSO Kwame Nkrumah – are going to be in place during the first phase.

It is expected that the partners would recoup most of their investments within the first five years of the production process, during which period Ghana will benefit from income taxes, royalties and interest for the Government of Ghana.

Even though the country’s overall estimated benefit from the oil is in the region of 53% of net revenues, it has been emphasised that participation by Ghanaians in the various ancillary supply and service aspects of the production process is what will maximise benefits to the country.


Interest Holding in Unitized Area (Jubilee Field)
Tullow - 34.7046%
Kosmos - 23.4913%
Anadarko - 23.4913%
GNPC - 13.7500%
Sabre - 2.8127%
E. O. Group - 1.7500%