The Centre for Natural Resources and Environmental Management (CNREM), has indicated that Ghanaians must question the rationale behind Tullow’s $4.4 billion investment into the Jubilee and TEN fields over the next decade, since they are already producing fields.
The question then is, what are the component parts of the investment of US$4 billion into these fields? the firm quizzed. This is against strong allegations that Tullow has inflated its cost of operating the fields, hence denying Ghana its due.
“This additional capital investment of [over] US$4 billion would bring the total investments in the two fields to unprecedented level of US$18.575 billion, the cost of developing almost 9 oil fields the size of Johan Castberg in Norway’s Arctic region.”
CNREM
Comparing the cost of operating these two fields to the Johan Castberg Oil Field (developed by Aker and its partners), the CNREM stated that, the field which is being developed in Norway’s Northernmost Arctic region in the Brent Sea comes at the cost of US$6.1 billion.
This is inclusive of yearly operating costs estimated at about US$140 million to start production in the fourth quarter of 2022. Again, the estimated total operational cost for the 30 years life span of the field is US$4.2 billion while the estimated Capital development cost is US$1.9 billion.
CNREM quizzed: “Why should Jubilee field in the calm waters of the Gulf of Guinea and almost the same size as Johan Castberg in the icy waters of the Brent Sea cost almost US$12 billion to develop and operate?”
Tullow’s Value Maximization Plan to Drill 50 Wells
According to Tullow, the $4.4 billion investment will be channelled into drilling of more than 50 new oil wells and the installation of additional subsea infrastructure on the Jubilee and Tweneboa, Enyira and Ntomme (TEN) oilfields.
Last year, the Managing Director of Tullow, Wissam Al-Monthiry announced that the partners are to invest a further US$4 billion Capital expenditure in the next decade in Jubilee and TEN for oil value maximization plans for the country.
Tullow over the past year has been upbeat on Ghana’s oil assets. Out of a total capex of $350 million, Tullow reportedly earmarked $270 million to its operations in the Jubilee and TEN fields.
“The multi-year drilling programme we started in Ghana last April continues with strong performance. At Jubilee, we have brought onstream two water injection wells and are in the process of completing two more wells, which will develop a gross combined reserve of 17 mmstb within the core Jubilee area. Our drilling programme also includes two key strategic wells at TEN which will help define the future of this high potential development.”
Tullow
Tullow recently executed a successful pre-emption of the Kosmos-Occidental deal at a cost of $118 million in March 2022. Accordingly, this has increased the net share of daily production from Jubilee and TEN by an expected 4,000 barrels of oil per day (bopd) on an annualised basis in 2022, completing one of the critical actions for 2022 from Tullow’s corporate scorecard, the firm stated.
Tullow Oil expects its 2022 production guidance to be between 59,000 to 65,000 barrels of oil per day as it focuses on its assets in Ghana.
