The Jubilee field is one of West Africa’s biggest oil strikes in years, likely containing recoverable reserves of at least 1.2 billion barrels of oil equivalent, with first output scheduled for the second half of 2010.
I thought I’d put together some information on Ghana’s Jubilee oil field, as it will have a powerful effect on Ghana, and change Ghana in ways we may not anticipate.
From the Ghanaian Times via Ghanalinx, source of the offshore map above:
“The International Monetary Fund predicts government revenues from oil and gas could reach a cumulative $20 billion between 2012 and 2030 in the Jubilee field alone,” a statement issued jointly by the Integrated Social Development Centre (ISODEC) and Oxfam America said.
The statement signed by Ruby Kissiedu for the Co-odinator, Media and Campaigns of ISODEC has, therefore, commended President John Evans Atta Mills for his commitment to increase transparency and public participation in the oil sector.
It said the exploitation of national resources in Africa, has often led to increased poverty and conflict, a phenomenon often referred to as ”resource curse”,
The statement said President Mills could help Ghana to avoid corruption, underdevelopment, social conflict and environmental damage brought on by too many oil booms around the world.
It recalled President Mills’ recent announcement in which he promised accountability on the part of all public officials and asked Ghana’s development partners and non-government agencies to support government’s efforts to build transparent and anti-corruption initiatives.
“This is an important step to preserve Ghana’s record of good governance and stability by preparing Ghana to support accountable and efficient development of the oil industry and the billions in government revenue it will generate.”
It said the two bodies were ready to work with the government to improve revenue generation especially by reviewing the mineral’s fiscal regime to ensure that mining companies pay more than the current minimum of three per cent royalties and to monitor the Jubilee Oil Field and other oil projects to ensure a maximum oil recovery at minimum cost.
“We are also ready to support government in the protection of the livelihoods of fisher folk and other communities around the Jubilee Oilfield as well as the larger marine ecological zone of the Gulf of Guinea,” it pledged .
The statement said the World Bank has committed 215 million US dollars in financing Kosmos Energy and Tullow Oil in support of the development of the Jubilee field.
It said, there was therefore the need for transparent revenue and payment practices, open and competitive contract bidding, active participation by civil society, and adequate legal and regulatory regime of the oil sector.
Let us hope these promises are fulfilled, and do what we can to see that they are fulfilled.
And from Ghana’s coming oil boom by Masahudu Ankiilu Kunateh:
The Jubilee field, named for the fact that it was discovered in the same year the country celebrated 50years of independence, may reach a production level of 120,000 barrel per day (bpd) by 2011. (Ghana’s current consumption of oil is 40,000 to 60,000 bpd, almost imported.)
Depending on oil prices and future production levels, Ghana could soon see more than $1billion added to government revenues each year, according to conservative estimates by the German Technical Cooperation Organisation (GTZ). Even much lower estimates will easily eclipse current revenues from mining (largely gold) exports.
It is important to point out that, Ghana’s life as an oil producer may be relatively short-20-30 years-and the country must move rapidly to beef up its legal and administrative framework to meet the significant managerial, administrative, political, and financial challenges the oil rush presents.
Ghana ’s birth as an oil producer coincides with a political transition-with a new presidential administration, cabinet ministers, and parliament installed in January 2009.
Because the Jubilee field straddles two blocks governed by two petroleum agreements, the oil companies involved and the Ghana National Petroleum Corporation (GNPC) have had to develop a “unitization agreement” to develop a joint contractual framework and geographically delimit the Jubilee field area.
Instructively, beyond the Jubilee field, there is active exploration and licensing interest in Ghana ’s offshore areas, much of this spurred by the 2007 discovery.
Kosmos, Chief Executive Officer, Musselman told African Energy during an October 2008 visit to Ghana that “We have been able to identify a couple of areas with the attributes as Jubilee field, and we have a high degree of confidence of making another find as big as Jubilee”.
In October 2008, Kosmos said the company would sink five wells in the coming 200 days in the Jubilee field, spending up to $100million in the process. Tullow drilled a successful exploration well-Ebony 1-in the shallow water Tano license area.
Anadarko’s CEO has said, “The partnership expects to be active in the area in 2009 and anticipates drilling development, appraisal, and at least three additional high impact exploration wells, including Tweneboa, Teak, and Onyina”. The drilling of Tweneboa was planned to begin in January 2009.
Other exploration wells have been drilled or are being planned for the Keta block and the South Deepwater Tano block.
Added July 17
Kosmos Energy was originally scheduled to auction off its 30% stake in the Jubilee Field today. A number of major corporations and countries, including India and China, were interested in bidding. But this week Kosmos was able to obtain funding to develop it themselves:
Financing to Fully Fund Company’s Share of Jubilee Oil Field Phase-One Development Offshore Ghana DALLAS, Texas, July 14, 2009 – Kosmos Energy announces today that it has signed definitive documentation for US$750 million project finance debt facilities.
The facilities are to be secured by the shares of the company’s subsidiary Kosmos Energy Ghana and its interest in the world-class Jubilee oil field offshore Ghana. This financing will fully fund Kosmos’ share of Jubilee’s phase-one development.
Kosmos, operator of the West Cape Three Points Block, drilled the Mahogany-1 exploration well that discovered the Jubilee Field, the world’s biggest oil find in 2007 and one of the largest oil discoveries offshore West Africa during the last decade.
Kosmos has drilled seven consecutive successful exploration and appraisal wells for a 100 percent success rate for all the wells the company has drilled to date offshore Ghana. (more) Kosmos and its partners are executing a phased development plan for the Jubilee Field, which is located on the West Cape Three Points Block and adjacent Deepwater Tano Block. The company believes that phase-one development will produce in excess of the planned 300 million barrels of recoverable oil. The designed production capacity of phase one is 120,000 barrels of crude per day.
At the same time the Ghana government is taking steps to provide accountable and efficient development of the oil industry, Ministry issues a stern warning:
Accra, July 15, GNA – Dr. Edward Kofi Omane Boamah, Deputy Minister of Environment, Science and Technology, on Wednesday said the ministry would not stand by and watch players in the oil and gas exploration industry destroy the country’s ecology and sacrifice the health and safety of citizens.
It appears the current government is serious about trying to protect the citizens of Ghana. I hope they are truly serious and this continues. I feared the previous government was setting itself up to loot the country. President Kufuor invited Barclays to establish an offshore tax haven. That danger is still present, I wrote more on it in this post: Barclays Bank To Support Poverty & Crime In Ghana & West Africa. A nearby tax shelter would be a powerful and convenient tool to steal from the Ghanaian people, and to hide the bribes that fuel corruption.
With tax havens and banking secrecy, the big corporations, already richer than many countries, the big money players:
… can quite legally cut themselves loose from pesky full taxation and grow explosively, leaving smaller competitors, who pay their full dues along with the rest of us, choking in their dust. This undermines the very notion of capitalism: the big companies’ advantage has nothing to do with the quality or price of what they produce. If you are worried about the power of big global corporations, don’t always attack them directly, but attack bank secrecy instead.
(Poisoned Wells: The Dirty Politics of African Oil, by Nicholas Shaxson, p.225&227, ISBN 978-1403971944)
The most obvious way corruption hurts society is its neutralizing effect on public servants, be they police or politicians, or anyone in between. Nigerians have their own word for when that happens; those on the take are said to be “settled.”
Nuhu Ribadu was a crusading prosecutor in Nigeria before an attempt on his life forced him to leave the country.
“When you fight corruption, it fights you back,” he says matter-of-factly. … “Unless we address the problem of corruption,” he says, “there is no hope, there is no future.”