Ghana’s maiden offshore oil field, the Jubilee Field, has become the cash-flow generator for Kosmos Energy’s development and exploration programmes, the company has said.In mid-2007, Kosmos and partners tested an Upper Cretaceous prospect which became the huge Jubilee Field (an estimated 1.6 billion barrels in place) offshore Ghana, opening up the Tano Basin.
The partners are ramping up production capacity at the field to 120,000 barrels per day, gross, on the floating production, storage and offloading vessel (FPSO) and currently at about 115,000 barrels per day.
According to Brian F. Maxted, Chief Executive of Kosmos Energy Ltd, this represents a good source of cash flow to fund follow-on developments and additional exploration elsewhere.
In an interview with the Oil and Gas Investor Magazine, a Hart Energy Publication last year, he said the company, which was one of the few pure-play, international exploration companies, is now in full development mode at Jubilee and thereby creating value in two ways one of which is by opening up new petroleum systems.
“For Kosmos the success was in the very first inning, finding Jubilee and opening up the Tano Basin. That is now transitioning to development and production.
“The second way we create value is by bringing fields into production rather quickly. There is still exploration left to do in Ghana, but we’ve had seven or eight discoveries there and Jubilee is on-stream now”.
According to Maxted, the company’s assets in Ghana are largely defined, adding that this represents a good source of cash flow to fund follow-on developments and additional exploration elsewhere.
“It makes us financially self-sufficient and we don’t need to go to the equity or debt markets for capital. That’s a key factor, given the capital market uncertainty today. We can organically fund ourselves and focus on finding the next Ghana in the portfolio we are putting together.”
He said Jubilee came on-stream in 42 months, which is a record for a field that size and in that water depth (about 5,000 feet).
On whether there is a need for finding joint-venture partners in its exploration programmes, Maxted replied in the affirmative, saying “We are fully funded going forward, but the assumption is we would have partners, although the point is we don’t have to have partners.
According to him, the company’s business plan is built around identifying acreage and attracting partners before they drill it.
“The most important thing is to align ourselves with partners that bring something to the table. Exploration is going into ever-increasing water depths and ever-increasing geological depths, so drilling and production capability is very important to us”, he added.
“That is the reason we brought Chevron into Suriname recently. They are the kind of partner we want if we find oil because they’ve been involved in setting some of the industry’s deepest-water records in the Gulf of Mexico, such as their Jack Field in the Lower Tertiary trend. We have their respect from our track record in Equatorial Guinea at the former Triton, and now in Ghana, and we respect their capabilities.
Source: The Business Analyst