In a significant development, West African nation Ghana Wednesday begun pumping oil commercially for the first time from its offshore Jubilee Field.
This will provide Ghanian economy a boost as the lucrative new industry is estimated to generate an annual revenue of $4 billion.
President John Atta Mills opened the valves at an offshore ceremony held on a floating platform on Wednesday, marking the historical occasion.
The oil and gas reserve, estimated at 600 million barrels with an upside potential of 1.8 billion barrels, was discovered by American oil exploration company Kosmos Energy in 2007.
UK-based consortium Tullow Oil Plc (TLW.L) is the unit operator and Kosmos Energy the technical operator of the phase I development plan that costs $3.3 billion.
Initially, they plan to pump 55,000 barrels of oil a day, which could be doubled in six months. However, government officials say initial daily output will be confined to between 5,000 to 8,000 barrels due to technical challenges.
A floating, production, storage and offloading (FPSO) vessel for the Jubilee Field has been installed at a water depth of 1,100 meter. Designed to operate for 20 years, it can process 120,000 barrels of oil and 160 mcf of gas a day and has a storage capacity of 1.6 million barrels of oil.
Tullow plans to exploit the field for 25 years, and looks to prospective projects in the Owo and Tweneboa.
Kosmos Energy said production of light sweet crude only 42 months after the biggest offshore discovery in West Africa during the last decade represents one of the shortest cycles for any deepwater FPSO-based oil project of this scale in ultra-deep water.
Having offshore oil fields estimated to contain about three billion barrels, Ghana has the potential to become a significant player in the global oil market, the Irish company says.
Jubilee Field is located 60 kilometers offshore between the Deepwater Tano and West Cape Three Points blocks.
Tullow is the major equity partner of the Deepwater Tano block holding 49.95 per cent shares. Tullow, Kosmos and Anadarko Petroleum Corporation (APC) hold major shares of West Cape Three Points.
Ghana National Petroleum Corporation (GNPC) has a stake of ten per cent each in both the sectors. Sabre Oil & Gas and EO Group are the other equity partners of the lucrative oil drilling project.
Vitol has signed a contract with Tullow for the marketing of Ghanian oil.
Crude from Jubilee Field will be light and sweet and similar to oil found in the North Sea, with a high yield of more expensive transport fuels like diesel.
Despite being one of Africa's most stable countries, the highly-rich oil resources raise the risk of conflict and corruption instead of funding development, as evidenced by another Western African country, Nigeria. Ghana does not have national regulations to control its oil sector.
The Finance Ministry has forecast that Ghana's economic growth rate is expected to rise from five per cent this year to as much as 12 per cent next year as oil revenues were to account for about six per cent of the total revenues in 2011.
Energy Minister Joseph Oteng-Adjei said the government had put in place mechanisms to ensure that ordinary citizens of Ghana benefitted from the much-anticipated oil wealth the country might generate, including "more jobs for our people."
This will provide Ghanian economy a boost as the lucrative new industry is estimated to generate an annual revenue of $4 billion.
President John Atta Mills opened the valves at an offshore ceremony held on a floating platform on Wednesday, marking the historical occasion.
The oil and gas reserve, estimated at 600 million barrels with an upside potential of 1.8 billion barrels, was discovered by American oil exploration company Kosmos Energy in 2007.
UK-based consortium Tullow Oil Plc (TLW.L) is the unit operator and Kosmos Energy the technical operator of the phase I development plan that costs $3.3 billion.
Initially, they plan to pump 55,000 barrels of oil a day, which could be doubled in six months. However, government officials say initial daily output will be confined to between 5,000 to 8,000 barrels due to technical challenges.
A floating, production, storage and offloading (FPSO) vessel for the Jubilee Field has been installed at a water depth of 1,100 meter. Designed to operate for 20 years, it can process 120,000 barrels of oil and 160 mcf of gas a day and has a storage capacity of 1.6 million barrels of oil.
Tullow plans to exploit the field for 25 years, and looks to prospective projects in the Owo and Tweneboa.
Kosmos Energy said production of light sweet crude only 42 months after the biggest offshore discovery in West Africa during the last decade represents one of the shortest cycles for any deepwater FPSO-based oil project of this scale in ultra-deep water.
Having offshore oil fields estimated to contain about three billion barrels, Ghana has the potential to become a significant player in the global oil market, the Irish company says.
Jubilee Field is located 60 kilometers offshore between the Deepwater Tano and West Cape Three Points blocks.
Tullow is the major equity partner of the Deepwater Tano block holding 49.95 per cent shares. Tullow, Kosmos and Anadarko Petroleum Corporation (APC) hold major shares of West Cape Three Points.
Ghana National Petroleum Corporation (GNPC) has a stake of ten per cent each in both the sectors. Sabre Oil & Gas and EO Group are the other equity partners of the lucrative oil drilling project.
Vitol has signed a contract with Tullow for the marketing of Ghanian oil.
Crude from Jubilee Field will be light and sweet and similar to oil found in the North Sea, with a high yield of more expensive transport fuels like diesel.
Despite being one of Africa's most stable countries, the highly-rich oil resources raise the risk of conflict and corruption instead of funding development, as evidenced by another Western African country, Nigeria. Ghana does not have national regulations to control its oil sector.
The Finance Ministry has forecast that Ghana's economic growth rate is expected to rise from five per cent this year to as much as 12 per cent next year as oil revenues were to account for about six per cent of the total revenues in 2011.
Energy Minister Joseph Oteng-Adjei said the government had put in place mechanisms to ensure that ordinary citizens of Ghana benefitted from the much-anticipated oil wealth the country might generate, including "more jobs for our people."
