The oil find in neighbouring Ivory Coast will have no impact on Ghana’s fields, Tullow Oil, operator of the Jubilee Field, has said.
France’s Total announced about three weeks ago it has struck oil on a block off Ivory Coast adjacent to Ghana’s giant Jubilee oil and gas field, leading to questions about whether a possible territorial dispute could arise between the two countries. Total said it discovered oil in the western part of the CI-100 block, which it acquired in 2010.
“Ivory Coast’s recent discovery of oil will have no effect on our business operations in any way. This is because of different geological basing; so it doesn’t have any impact on us but it is good for Côte D’Ivoire,” Dai Jones, President and General Manager of Tullow Ghana Limited, said at an investor forum in Accra.
Oil exploration in Africa’s Gulf of Guinea has risen sharply since Ghana discovered Jubilee in 2007 and brought it into production in record time in late 2010. The field holds around 2 billion barrels of oil reserves and another 1.2 trillion cubic feet of natural gas.
Jubilee, which averaged production of 72,000 barrels of oil per day, has seen output rise to above 110,000 barrels per day in 2013.
Aidan Heavey, Chief Executive of Tullow Oil plc, said the company has submitted a Plan of Development to Government to allow for the start of its second deepwater development, the Tweneboa, Enyenra and Ntomme (TEN) fields. About US$4billion is expected to be invested in the TEN project by Tullow and its partners.
Mr. Heavey said though Ghana and Uganda have been the focus of the company’s operations since 2007, a new area of focus for the Group will be Kenya and Ethiopia following a successful exploration campaign in the two countries in 2012.
Local content
Mr. Heavey said local content forms an integral part of Tullow Oil’s operations, and the company is helping to raise standards among local businesses to ensure that they can compete genuinely for contracts.
“This is capacity building, and it is good for Tullow because it drives down cost in the supply chain. And it also good for the businesses involved, which learn to produce better-quality goods and services,” he added.
Tullow Oil contributed US$5million toward establishment and running of the Enterprise Development Centre at Takoradi to act as a focal point for coordinating business contacts between oil and gas companies and SMEs.
The company is operational in countries including Ghana, Equatorial Guinea, Gabon, Côte d’Ivoire, Congo Brazzaville and Mauritania, with its main development and operating focus on the Jubilee and TEN projects offshore Ghana.
In 2012 Tullow’s revenues increased by 2 percent to US$2.3billion, and working interest production jumped 1 percent to 79,200 barrels per day. Its net profit however decreased by 3 percent to US$666million.
Source: B&FT
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Ever since the late 1950s, when commercial quantities of oil were first discovered in Nigeria’s Niger Delta basin, West Africa has been an area of interest for oil and gas exploration and production companies. But a host of challenges, many of them related to threats of violence and corrupt political regimes, dissuaded many of the world’s leading energy companies from prospecting areas of Africa more thoroughly.
However, that reluctance quickly changed to renewed optimism when Tullow Oil discovered the Jubilee oil field in Ghana back in 2007 – a find hailed as one of the largest recent discoveries on the continent. Jubilee, which has an estimated reserve potential of about 5 billion barrels of oil, piqued the interest of a bevy of global exploration and production companies, who subsequently rushed into neighboring Gabon, Liberia, and Sierra Leone, eager to exploit the continent’s vast natural resources.
Energy companies exploring in Africa
Initially, it was mostly smaller, foreign exploration and production outfits, including Ophir Energy, Kosmos Energy, Africa Oil and others, that dominated exploration off the coast of sub-Saharan Africa. Mid-sized international oil and gas companies, such as Anadarko (NYSE: APC ) , which made an explosive move into exploring offshore Tanzania, where one of its deepwater exploration wells reported promising results last year, also played important roles.
But over the past few years, the world’s largest integrated oil companies have also joined the party. For instance, Brazilian oil major Petrobras (NYSE: PBR ) is preparing to drill exploration wells offshore Tanzania, where it holds 50% stakes in two offshore exploratory blocks, while ExxonMobil (NYSE: XOM ) has turned its attention to exploratory prospects off the coast of South Africa, where it acquired a 75% stake in blocks owned by Impact Oil & Gas late last year.
And Chevron (NYSE: CVX ) announced in March that it will proceed with the development of the Moho Bilondo “Phase 1 bis” and Moho Nord projects offshore the Republic of Congo. The projects, situated roughly 50 miles southwest of Pointe-Noire in water depths ranging from 1,500 to 4,000 feet, are expected to cost about $10 million and produce a combined 140,000 barrels of crude oil per day at their productive peak, which Chevron reckons will be attained in 2017.
Final thoughts
Chevron and the other integrated oil majors’ willingness to take on the high level of risk by prospecting acreage often tied to unstable political regimes highlights their urgent need to find new reserves and boost production. Many are struggling to replace the oil they produce with new reserves, as reflected by some of their weak reserve replacement ratios.
For instance, Royal Dutch Shell (NYSE: RDS-A ) reported a reserve replacement ratio of just 85% last year, while Total’s (NYSE: TOT ) came in at 93%. A ratio that is consistently under 100% generally indicates trouble further down the line. As the majors continue to struggle to boost their oil and gas production, future growth will increasingly come from unconventional sources, such as offshore Africa and Brazil, U.S. shale, and Canada’s oil sands.
According to the consultancy Wood Mackenzie, sub-Saharan African nations could be pumping out an additional 400,000 barrels of oil per day by 2018. That would bring the sub-Saharan region’s total crude oil output to 6.6 million barrels per day, equivalent to daily field production of crude oil in the U.S. last year.
In my view, it will be most interesting to see whether or not the wealth generated from sub-Saharan Africa’s oil and gas production will translate into higher standards of living for its citizens, or whether the region will fall prey to the infamous “resource curse”, where wealth is accumulated by just a handful of already wealthy politicians, their circle of privileged friends, and the companies they hand out contracts to. Unfortunately, the latter looks more likely to be the case.
Source: Graphic Business
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Crude oil is now Ghana’s second main export, increasing moderately in the past two years from $2.7 billion in 2011 to $3 billion in 2012, according to Standard Chartered Research.Gold is the country’s highest foreign exchange earner.
In its Outlook on Ghana released May 14, 2013, it noted that Ghana became an oil producer in December 2010, with an estimated 85,000 barrels per day being pumped at the country’s main Jubilee field.
“In 2011 and 2012, oil production averaged 90,000 barrels per day, missing production targets due to technical factors stemming from the absence of gas infrastructure (the prohibition on flaring means that gas must be re-injected into the Jubilee field for the time being, leaving Ghana vulnerable to output volatility),” it said, adding that “the discovery of new sites, adjacent to the Jubilee field development, which targets 500 million barrels in estimated oil reserves, should enable the country to increase production to about 250,000 barrels per day of oil equivalent by 2021. Current production is estimated to be around 110,000 barrels per day.”
According to Stanchart Research, although Ghana remained a marginal net importer of oil in 2012 (oil imports totalled $3.3 billion in 2012), the expected increase in domestic oil production should be enough to allow Ghana to become a net exporter of oil by 2014.
“This, together with a still well-diversified export base, should reduce Ghana’s sensitivity to oil prices,” it says.
Source: Ghanabusinessnews
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]]>The Centre will provide the small scale enterprises a range of services such as business training, capacity building, advisory services, access to market and information about new developments in the industry.
Speaking at the ceremony, the Minister of Energy and Petroleum, Mr Emmanuel Armah Kofi Buah said the Centre was one of government’s initiatives to provide support to Ghanaian SMEs to take active part in the new industry.
The government is being supported by Jubilee partners made up of Kosmos Energy, Ghana; Tullow Oil; Anadako; Ghana National Petroleum Corporation (GNPC) and PetroSA.
Source: Graphic Business
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The Revenue Watch Institute (RWI) has launched the 2013 Resource Governance Index (RGI) report which is a measure of transparency and accountability in the oil, gas and mining sector of 58 countries. The report seeks to promote the effective, transparent and accountable management of oil, gas and mineral resources.
One of the key findings in this year’s report is that only 11 of the countries( less than 20 percent) have satisfactory standards of transparency and accountability. In the rest, the public lacks fundamental information about the oil, gas and mining sector. Even countries with generally satisfactory standards exhibit weaknesses in some dimensions.
Read the full report here
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As part of its commitment towards the socio-economic development of the country, Tullow Oil plc in 2012 invested 669 million dollars as part of its corporate social responsibilities.
Out of the amount 114 million dollars was spent on developing the capacity building of Ghanaian registered businesses, which supply and provide services to the company.
This became known when Mr Aidan Heavey, Chief Executive Officer, Tullow Oil plc, addressed shareholders of the Tullow Ghana in Accra on Tuesday.
He said Tullow Ghana had also contributed 5 million dollars towards the establishment and the running of the Youth Enterprise Centre, which has been established by Government at Takoradi to train unemployed youth.
Mr Heavey said oil production from the Jubilee Fields in 2012 averaged 72,000 barrels of oil per day (bopd) adding that by February production was in the excess of 110,000 barrels.
He said following successful exploration, appraisal and testing at the Tweneboa, Enyenra and Ntomme fields, the company had submitted Plan of Development to government to allow the company starts its second deepwater development.
He said Ghana and Uganda have been the focus of the company’s focus since 2007, as major fields have been discovered in the two countries.
“A new area of focus for Tullow Group would be in Kenya and Ethiopia following the successful exploration campaign in those countries in 2012”, he said.
Mr Heavey said Tullow is operational in Ghana, Equatorial Guinea, Gabon, Cote d’Ivoire, Congo
Brazzaville and Mauritania with its main development and operating focus on the Jubilee and TEN projects offshore Ghana.
He said the company expects to increase its jubilee field production from 72,000 bopd in 2012 to 120,000 bopd by the end of 2013.
He noted that local content formed an integral part of the activities of Tullow Oil as it helps to raise standards in local business to ensure that they could compete genuinely for contract.
“This is capacity building, and it is good for Tullow because it drives down cost in the supply chain, and it also good because for the businesses involved, which learn to produce better quality goods and
services,” he added.
He said developing local content also helps to develop the national economy and provide opportunities for all.
Mr Ike Duker, Executive Chairman, Tullow Ghana, appealed to the shareholders to keep faith with the company.
He said the company managed business in a responsible way in order to maximise sustainable development opportunities for their host countries.
Source: GNA
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Fisher folks in the coastal communities of the Western region have complained about the dwindling fish catch due to the negative impact of the oil and gas exploration and production.
The operations of the Jubilee Oil and Gas field, and fishing activities of surrounding communities in the Jomoro District is intertwined. The imposition of a ban on fishing within 500 metres radius of the Jubilee fields has affected the fishermen’s catch and income.
A SEND Ghana report on the extractive industry revealed that fishmongers in the Enosie Community in Half Asini, the capital of the Jomoro District have resorted to petty trading and farming for alternative livelihoods, while others do not have any other means of survival aside fish mongering.
Petty trading including the sale of iced water and groceries is becoming a popular alternative economic activity among fishmongers and processors in the area, a situation they attributed to the dwindling fish catch.
The report, “Our Money, Our Share, Our Say: The Extractive Industry in Perspective,” was to assess the extent to which transparency, accountability and equity exist in the use of public resources by the Tarkwa Municipal Assembly, the Jomoro and Tolon-Kumbugu District Assemblies.
It recommended that the Ministry of Fisheries and Aquaculture Development and the Fisheries Commission must come up with a clear policy to save the fishing industry from collapse and the consequential losses in livelihoods of fishing families in coastal communities in the Western region in the light of the oil and gas discovery.
Also, efficient investment in smallholder agriculture and direct support for alternative livelihood ventures will improve the incomes and livelihood security of the larger proportion of the population engaged in agricultural production including fishing.
The report said the impact of oil spill on marine life and livelihoods of the communities can be disastrous. Such potential threats to livelihoods justify adequate compensation to local assemblies to stimulate development in the locality.
Although mineral exploitation is a major source of income to both Tarkwa Nsuaem and Tolon-Kumbugu Assemblies, the environment and social cost far outweigh the benefits, such that citizens have not seen significant development accruing from the exploitation of minerals.
In Tolon-Kumbugu District Assembly, sand winning is posing a serious environmental challenge to the people. The activities have fast degraded farm lands and affected farmers can no more cultivate crops. Citizens indicated the unregulated sand winning in the Dalun area is affecting farming activities which is their main source of livelihoods.
In Tarkwa-Nsuaem, polluted water bodies have been associated with skin diseases and type 11 diabetes caused by intake of arsenic, a carcinogen associated with gold ores. A baseline study conducted showed that all the 117 rivers and streams in the Municipality were perceived to have been polluted by mining companies and small-scale mining operators (galamsey) (Obiri 2012).
In the Jomoro District, citizens are concerned that the oil rigs and the Floating Production Storage and Offloading (FPSO) vessel use very high lightening system which crowds most of the fishes around it leaving the fishable areas almost empty. The situation, the fishermen stated is the principal cause of their low harvest making fishing activity unattractive and unprofitable.
A fisherman at Half Asini said “the oil and gas companies have taken full control of the sea and they are destroying our fishing business, how can we survive with our children and wives with all these restrictions on fishing around the oil rig and FPSO”?
The study restricted itself to the use internally generated fund (IGF) with special emphasis on royalties that are generated from minerals, including oil and gas exploration and exploitation. Clearly, these communities have invariably suffered both negative environmental and socio-economic consequences from the activities of the extractive sectors in their localities.
The report therefore expects that the funds that accruing from the mining and drilling activities will inure to the benefit of the affected communities in a way that engender greater development results.
It stated the vehicle for translating these gains into on-the-ground-development benefits for the affected communities is a function of the assemblies’ ability to benefit from royalties and taxes paid by the exploration and exploitation companies.
Indeed, the report makes it clear that there are challenges with the existing laws guiding the distribution of royalties; a lack of harmony in the legal; framework for administering royalty distribution is ripping some assemblies of, yet the report established instances where communities suffer without any form of compensation.
Section 111 (1) of the Mining and Minerals Act defines mineral as a substance in liquid or solid form that occurs naturally in or on the earth, or on under the seabed, formed by or subject to geographical process including industrial mineral but does not include petroleum.
Although this and other laws on natural resources vest ownership of mineral resources in the state, sand winning like other small scale mining activities escape rigorous regulation from state institutions.
The SEND study recommended that the oil revenue must be managed in such a way that it benefits Ghanaians in general and the coastal communities along the western coast line of Ghana in particular because they are currently bearing all the negative environmental, social and economic effects of the oil exploitation including livelihoods losses.
For this to be achieved, it is recommended that the Petroleum Revenue Management Law be amended to make provisions for the payment of royalties to the coastal districts in the Western region. The proportion should be arrived at through consultation with all stakeholders.
Source: Daily Graphic
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The multi-million dollar Atuabo gas project is poised to become the number one revenue generating venture by the government, industry experts have said.
They said the project, when fully functional by December this year, could pay off the investment cost and other projects financed by the loan from China in less than five years.
The experts say the decision by Ghana to process the gas to power its generating units was a smart move.
Speaking to the Daily Graphic in an interview, the Chief Executive of the Ghana National Gas Company, Dr George Sipa Yankey, assured the country that the country’s gas would be delivered on schedule.
He said the investment was one of the best the government had embarked on to ensure that the country’s gas was harnessed to the advantage of the country, and that there was enough gas deposit to justify the investment in the infrastructure.
“At the moment, the total natural gas deposit offshore Ghana is more than 5-trillion standard cubic feet, and other exploratory works are still going on, which has an associated gas or non-associated gas,” he said.
He said the first phase of the gas plant was designed to process 150 million standard cubic feet, and that the second phase in 2016/2017 was expected to increase production to 300 million cubic feet a day.
He said the gas would be sold and transported to the thermal generating units at the current market price.
Asked if generating units in the country would be in the position to consume the volume produced daily, he said, “We will even be producing below the current demand for the thermal units, the daily need of the thermal units operating in the country is about 400 million standard cubic feet and we will be producing 150 million.
He said the authority had signed seven memoranda of understanding with seven independent power producing (IPPs) companies to supply them with the product upon completion.
Asked what happens to the investments of the companies that did not discover oil but non-associated gas Dr Yankey said “ the government and Ghana Gas are very much aware of the motives of the investors who came to explore offshore.”
He said the government had been engaging with the international oil companies (OICs) to ensure that the companies agreed on the future of the gas as more discoveries were being made.
Source: Daily Graphic
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Kofi Annan, the former UN secretary-general, is urging David Cameron to use Britain’s chairmanship of the G8 to end some of the “unconscionable” practices of companies exploiting Africa’s vast reserves of natural resources.
The prime minister has promised to put trade, transparency and tax at the top of the G8′s agenda when he hosts the leaders of the world’s major nations in Belfast next month.
Annan said he would be sending him a copy of the annual Africa Progress Report, which shows how the economic benefits of extracting natural resources such as oil and iron ore often fail to flow through to the local population.
“Africa loses twice as much in illicit financial outflows as it receives in international aid,” said Annan, in his foreword to the 120-page report. “It is unconscionable that some companies, often supported by dishonest officials, are using unethical tax avoidance, transfer pricing and anonymous company ownership to maximize their profits, while millions of Africans go without adequate nutrition, health and education.”
While a number of resource-rich African states such as Equatorial Guinea and Angola have achieved impressive economic growth rates in recent years, widening inequality has often meant that development indicators, such as infant mortality, have failed to keep pace. Average GDP per head in Equatorial Guinea, at $21,715 (£14,015), now exceeds the $17,776 of Poland, for example; but life expectancy is just 51, against 76 in Poland.
The Africa Progress Panel, which is chaired by Annan, and includes Sir Bob Geldof and the chief executive of the Prudential, Tidjane Thiam, is calling on G8 countries – and their fellow G20 members, including China and Brazil – to enforce corporate transparency so that citizens in developing countries can see exactly who owns the companies involved in mining deals. They would also like to see a crackdown on the international tax rules that allow multinationals to shift profits from one country to another with impunity.
Rosie Sharpe, of campaign group Global Witness, said: “It is hugely significant that such a prominent and respected figure as Kofi Annan has come out publicly to criticise the lack of transparency in natural resource deals and highlight the importance of increased financial transparency and better governance for African development. What’s needed is for the names of the real, ‘beneficial’ owners of companies and trusts to be put in the public domain.”
As an example of the way in which the full benefits of exploiting natural resources can disappear offshore, the report analyses five mining deals in the Democratic Republic of Congo signed by the state-owned company Gécamines between 2010 and 2012. Mineral rights were initially sold to a series of offshore companies – whose end-ownership is unclear – in the British Virgin Islands, and then rapidly sold on at hugely inflated prices, in some cases generating a profit of more than 400%.
The loss on these five deals alone was $1.36bn, the Panel estimates – dwarfing the $698m spent each year on health and education in the DRC, a country where 17 children in every 100 do not reach their fifth birthday.
“I think it’s very important for the G8 to accept that transparency and accountability is extremely important, not just for them in terms of tax, but for Africa it has an impact on the lives of women and children,” Annan said.
Credit: Guardian UK
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Former United Nations Secretary-General and President of the Africa Progress Panel Foundation, Mr. Kofi Annan, has bemoaned corruption in the management of mineral revenues by African leaders.
He calls for the involvement of Civil Society and the general public to demand accountability from leaders.
Watch full video here