The recent announcement of ‘first oil’ from the Jubilee South East (JSE) project has sparked excitement and showcased the rewards of committed partnerships with government support.
Tullow Ghana, the operator of the Jubilee Oil field, proudly shared a few weeks ago that it had successfully delivered first oil from the JSE area – an extension of Ghana’s Jubilee Fields – located offshore Cape Three Points in the Western Region.
“A big field just got bigger, and we are looking at the possibility of Jubilee as a billion barrels recoverable,” said Wissam Al-Monthiry, Managing Director of Tullow Ghana Limited.
The news was significant – Ghana was at last headed back to the heady and lofty days of its oil find when it was producing 100,000 bpod. It was good news for all the partners: Tullow Oil, GNPC, Kosmos Energy, Petro SA, and Jubilee Oil Holdings. What was even more exciting was the fact that majority of the complex sub-sea infrastructure involved in the JSE project development was fabricated in Ghana, with more than 90 percent local participation – a triumph for the local content agenda in the oil and gas industry.
However, this remarkable success wasn’t always anticipated. After Ghana’s ground-breaking oil find in 2007, the Jubilee Field was celebrated globally as a flourishing oil-rich reserve. Geologists saw it as a shining beacon in the Tano WCTP basin, poised to become one of the world’s most prosperous oil fields.
Yet, after nearly a decade of significant production, the field’s output started to decline, as is common in many oil fields worldwide. The consequent dip in expected revenues was troubling for partners, stakeholders, the government, and the people of Ghana.
In spite of this, Tullow Ghana remained undeterred, believing that sustained investment and diligent development of the field would bring previously undeveloped resources into production to achieve full potential. This strong conviction led to a redefined focus to prioritise capital investments on existing producing assets, instead of new fields. It was a pure stroke of inspiration that also reflected the strength of its new leadership.
Subsequently, Tullow, along with its partners, announced a US$4billion value maximisation plan to continue drilling and developing various facets of the Greater Jubilee Fields, with particular attention on the south east area of the field.
Previous engagements with the Ghana Government had already led to a revised plan of development – the Greater Jubilee Full Field Development Plan – which was approved in 2017 by the Ministry of Energy. This approval paved the way for enhanced investments in the JSE area project, and is now expected to deliver more than US$13billion in net value to the Ghana Government through taxes, royalties and other payables – assuming a conservative per barrel price of US$65-70 – in the next decade.
Today, the JSE project has surpassed initial expectations, successfully delivering first oil and increased daily production rate in the Jubilee Field beyond 100,000 bpod. The impact is substantial, boosting Ghana’s revenues, partners’ businesses, job creation, and overall economic stability. The ensuing proceeds will help the government fulfil its obligations and enhance its infrastructure development.
For Tullow, the success signals a transition to a low-debt business, providing financial flexibility for investment in value-enhancing accretive projects.
There is definitely cause for sunny optimism in the medium to long-term future. The Jubilee North-East area remains undeveloped, holding more reserves that could put Ghana in the big leagues of West African oil and gas industry players for years to come.
Additionally, this positive news gives the assurance that a revised plan of development for the TEN field – the other big oil field operated by Tullow – can deliver even greater benefits for all the stakeholders involved. Work is currently ongoing to submit a revised Field Development Plan for the TEN field that would produce comparable beneficial returns for Ghana in the same manner as the JSE.
As the shared prosperity agenda for Ghana takes centre-stage, these remarkable achievements serve as catalysts for progress and development, propelling the nation toward a brighter future. It also shows that with the right business environment – the kind that gives confidence to the partners, more successes can be achieved in the industry.
As we celebrate the success of the JSE project, let us be reminded of the potential to unlock Ghana’s vast oil potential, and how this endeavour can drive positive transformation for the West African country.
