Exciting year for oil

Independent oil exploration and production company, Tullow Oil Ghana, has observed that 2010 was a transformational year for the company.

“First oil from the Jubilee Field in December, last year, has established the company as a successful deepwater operator,” said Kevin Quinn, Licence and Business Services Manager, Tullow Ghana.

He noted that future exploration in Ghana looked very promising therefore, the company, in 2011, would develop new major oil fields as well as undertaking exploration to open up new basins.

Tullow, with its Jubilee Field partners, had an exceptional performance in 2010 achieving gross production of over 69,000 bopd from five wells and full production capacity of 120,000 bopd is expected to be reached by July, this year, when remaining four production wells are completed and brought on line.

On 5 January 2011, the first lifting of Jubilee crude oil, a 650,000 barrel Tullow cargo was successfully completed and three liftings have now been completed to date, with total crude lifting estimated at 3.3 million barrels of oil.

The Ghana National Petroleum Corporation (GNPC) lifted its first consignment of 950,000 barrels on Wednesday. A lifting arrangement allows the four major Jubilee Field partners; Tullow, Anadarko, Kosmos and GNPC to offtake oil, in turns, from the floating, production storage and offtake vessel, FPSO Kwame Nkrumah.

Jubilee partners expect that once plateau production of 120,000 bopd is reached; there will be an average of three offtakes each month. Water injection to two wells is currently around 110,000 bwpd and a further four water injection wells will be completed during 2011 to maintain plateau oil production levels.

Gas injection will commence in March to a single well, the second injection well is expected to be completed in the third quarter of 2011. Quinn explained gas injection will be maintained for two years, by which time gas pipeline and other infrastructure, being undertaken by GNPC, would be ready to offtake gas from the FPSO Kwame Nkrumah.

"The business is well balanced and well funded to implement an exploration-led strategy," Quinn said, when he briefed the media, last Wednesday, on the performance of Tullow Ghana and the outlook for the oil and gas sector in the country.

Tullow Oil posted a 361 per cent rise in pre-tax profit for 2010 to $152 million from $33 million while sales revenue for the year to December was up 19 per cent to $1,090 million from $916 million.

Operating profit was $235 million, rising 56 per cent from the previous $151 million.
Quinn noted that the outlook for 2011 is very positive for Tullow and its Jubilee partners. The field, which commenced production in November 2010, is expected to ramp-up to 120,000 bopd (gross) during 2011 and plans for further development with potential new field developments, Enyenra and Tweneboa, in Ghana are under review.

Tullow is expecting 75,000 to 125,000bopd on the back of the development of the Enyenra and Tweneboa Fields and that first oil could follow in about two-and-a-half years after sanctioning of the project.

Mr Quinn said the commercial viability of the two fields would be confirmed by the end of this year after further appraisal and testing and "that if all went well Tullow would submit a plan of development by the first half of the 2012."

This development, he said, could double Tullow's output from Ghana by the end of 2014.

Additionally, Jubilee partners are planning work for Phase 1a of the Jubilee development, to comprise between five and eight further wells, commenced in the fourth quarter of 2010. This development will help maintain field production at plateau levels and develop further reserves.

It is anticipated that the investment decision will be made in the third quarter of 2011 following analysis of reservoir performance and submission of plans to government.

Quinn disclosed that sub-surface planning work is well advanced and has already identified the additional well locations. A deepwater rig to execute the programme starting early in 2012 is currently being tendered.

Operator of the West Cape Three Points (WCTP) licence, Kosmos Energy, also has submitted a Declaration of Commerciality for the Mahogany East, previously known as “Southeast Jubilee‟ area in September 2010. The Plan of Development for Mahogany East is currently under discussion with government.

The development of the Mahogany East reservoirs, which are extensive but generally thinner than in the main Jubilee reservoirs, is currently planned to consist of a four to six well tie-back to the existing Jubilee subsea infrastructure when capacity is available.

However, an accelerated development as part of an integrated project with other WCTP discoveries may be considered depending upon exploration and appraisal success in the WCTP licence, Field partners have disclosed.

Source: B&FT