Tullow Oil Plc said Ghana will become one of the world’s top 50 oil producers, after the government approved a plan to pump crude from the Jubilee field in the second half of 2010. The deposit, to be developed with a floating production, storage and offloading vessel (FPSO) will reach a plateau rate of 120,000 barrels of oil a day, London-based Tullow Oil said today in a statement. Ghana also approved an agreement between the project partners to rearrange their holdings.

Ghana expects to pump 500,000 barrels of oil a day by 2014 as it seeks to boost supplies to the domestic market and become Africa’s newest crude exporter. The partners developing Jubilee, where work on the FPSO started last July, have agreed to donate some of the field’s natural gas to the nation to fund pipeline development and boost the local economy.

“Ghana will move pretty quickly into the top 50 producers in the world,” Aidan Heavey, Tullow Oil’s Chief Executive Officer, said today. “All the negotiations were both about the actual development and the gas development plan. The key part of that document is utilization of the gas.” The partners, which include Kosmos Energy LLC and Anadarko Petroleum Corporation, plan to invest about $3.1 billion in the Jubilee project. Kosmos said yesterday it secured $750 million in loans to develop the field. The Ghanaian authorities said in June that they were waiting for the venture to complete funding agreements before approving the Phase 1 development plan. “Ghana has a huge gas demand itself,” Aidan Heavey said. “They will use all the gas we can deliver from Phase 1 for power generation and local use in the country.”

Tullow Oil rose 43.5 pence, or 4.9%, to close at 934.5 pence in London trading, the biggest one-day gain in six weeks. The stock has added 42% this year, valuing the company at GBP 7.5 billion pounds (USD 12.3 billion).

The Jubilee field is split between the Deepwater Tano and West Cape Three Points licenses, which are being developed by two groups of investors. Following the agreement to modify holdings in Jubilee, Tullow, the operator, holds 34.7%; Kosmos controls 23.49%; Anadarko owns 23.49%; Sabre Oil & Gas holds 2.81%; EO Group has 1.75%; and Ghana National Petroleum Corporation has 13.75%.

Kosmos Energy, based in Dallas, is still accepting bids for its stake in Jubilee and examining whether to exit the project or fund the development, Chief Financial Officer Greg Dunlevy said today, declining to give further details. Tullow Oil said July 8 that Kosmos would take bids for its stake until July 17. “I presume that there would be a lot of interested” parties, Heavey said. “We will not be bidding on the Kosmos stake; we have certain preemption rights and we will always look at those rights at the appropriate time.”

The Jubilee oil field is Tullow Oil’s largest project. Tullow Oil is also focusing on exploration in Uganda.

Visit Tullow Oil’s website
Visit Kosmos Energy’s website
Visit Anadarko Petroleum’s website
Visit Ghana National Petroleum Corporation’s website

Source(s):
Bloomberg News