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Why Jubilee Partners Refine Oil Abroad?

A Senior lecturer at the Department of Earth Science of the University of Ghana has stated that there is no law in the country that compels oil companies operating at the Jubilee Oilfield to refine their crude oil consignment in Ghana.

Dr Thomas Akabzaa told journalists attending a week’s Oil and Gas seminar in Accra that the Jubilee Partners namely Kosmos Energy, Tullow Oil, Anadarko Petroleum, E.O Group and Ghana National Petroleum Corporation (GNPC) have the right to refine their crude oil consignment abroad if they think that option was viable.

‘The Jubilee Partners have an agreement with the Ghana Government to lift a certain amount of crude depending on the number of shares they have in the oilfield.

This consignment belongs to them and they can decide to do whatever they want with it and nobody can dictate to them,’ the University scholar, who will soon become the Chief Director of the Ministry of Energy, explained.

He was however hopeful that the situation would change in future and all the Jubilee Partners would be required by law to refine their crude oil consignment here in Ghana.

Tullow Oil was the first company to lift crude oil at the Jubilee Field during the first week of January this year.

It sent the oil to the international market without refining it in Ghana even though the Tema Oil Refinery (TOR) was built to process light crude oil like the one discovered at the Cape Three Points in the western part of Ghana.

Reuters News Agency reported that US company Exxonmobil, which expressed interest sometime ago to buy Kosmos’ 30 per cent stake in the Jubilee oilfield was the first company to buy the cargo of Jubilee crude loading on 1-7 January and 8-18 January from trading companies Vitol and Trafigura.

The media recently reported that the first oil was sold for $66 but Tullow Oil and Vitol have indicated that the price achieved for a barrel of oil from Ghana’s Jubilee Oilfield, especially the first consignment, was in excess of $90 per barrel and not as low as what a section of the Ghanaian media has quoted in their reportage.

In a joint press statement issued by the oil companies on Friday in Accra, they noted that the price for a barrel of crude from Jubilee had a small differential linked to the Dated Brent crude price index.

The next company to lift the oil would be Kosmos Energy, which plans to raise $500 million in an initial public offering and use the proceeds to help fund its capital spending. The third company will be Anadarko.

No one is quite sure whether they would refine their consignment in Ghana before exporting to the international markets but industry sources say these companies will also follow the footsteps of Tullow Oil, which announced plans recently to list on the Ghana Stock Exchange in order to raise money for long-term development.

‘Ghana National Petroleum Company (GNPC) is the fourth to lift the crude oil and can decide to refine it here at Tema Oil Refinery. This will be at the end of February and the first week in March,’ Dr Akabzaa stated.

The Energy Minister, Dr Joe Oteng-Adjei recently told the media that government is hopeful it will get a good price by the time Ghana lifts crude oil.

The seminar is being attended by 14 selected journalists drawn from Ghana and Uganda.

Uganda also discovered oil in commercial quantities and would soon start production.

The event is being organized by Revenue Watch Institute, a US-based organisation which seeks to promote responsible management of oil, gas and mineral resources for the public good.
http://accra-mail.com/index.php?option=com_content&view=article&id=31819%3Awhy-jubilee-partners-refine-oil-abroad&catid=62%3Abusiness&Itemid=211

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Reporting Oil and Gas project was launched on 4th June 2009atTakoradi, Western Region, Ghana by Penplusbytes (PPB – www.penplusbytes.org) with the vision of providing a one stop online information and knowledge about Ghana’s oil and gas sector
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