Business News of 2014-01-21

Ghana to produce 100,000 barrels of crude oil daily

Kosmos Energy Ltd has announced that Tullow Oil plc, the operator of the Jubilee field, has provided a revised production forecast of 100,000 barrels of oil per day (Bopd) for the full year 2014.
This rate allows for a potential two-week shutdown for regular maintenance at the Jubilee floating production, storage and offloading vessel (FPSO).
A release from Kosmos said: “Based on the operator’s revised production guidance, Kosmos’ net interest in the field’s 2014 production is approximately 24,100 Bopd, similar to 2013 net production levels. As a result, Kosmos currently expects to sell eight crude oil cargoes during 2014.”
“The revised forecast is unrelated to reservoir performance and well productivity, which remain strong,” the release added.
It said new forecast primarily stems from the recently completed third gas injection well which started up in the fourth quarter of 2013 and provided minimal relief.
Additionally, the release noted that delays in restoring full water injection during 2013 further compounded the gas handling challenges.
Restoration of full water injection was achieved late in the fourth quarter.
Short, medium and longer-term options to ameliorate the situation in the best interest of all stakeholders are being discussed with Ghanaian authorities.
The Ghana National Gas Company’s Western Corridor Gas Infrastructure system is currently expected to be ready to receive gas from the Jubilee field in late 2014.
Meanhwile, the achievement of the revised production forecast is contingent on the timely resolution of these matters.
Petroleum Receipts
Acording to the 2014 Government of Ghana budget statement, the projections are not likely to significantly affect the government’s expectations in terms of revenue from the Jubilee Fields.
According to the budget statement for 2014, in the first nine months of 2013, crude oil production from the Jubilee field averaged 102,503 barrels of oil per day (bopd), compared with a projected output of 83,341 bopd and 71,997 bopd in 2012.
This works out to a total of 27,060,737 barrels for January-September 2013, compared with a full year estimate of 30,419,465 barrels and 26,351,278 barrels for the full year of 2012.
By end-September 2013, GNPC had made five liftings on behalf of the State. This totalled 4,977,922 barrels, which resulted in a total revenue of US$533.86 million.
The Jubilee Field is currently in its second phase of development – the Phase 1A. Work done so far in this phase helped to further increase production to an average level of around 107,000 bopd in October 2013.
Should production continue at the October 2013 level, the 2013 Jubilee average daily production is anticipated to exceed the 102,503 barrels mark recorded for January-September 2013.
Again total petroleum receipts, including proceeds from Jubilee Field oil lifting by GNPC on behalf of the State as of the end of the third quarter of 2013, was US$707.28 million (GH¢1,358.18 million), compared with a total 2013 Budget estimate of US$581.72 million (GH¢1,122.72 million).
The main reasons for the positive variance of US$125.56 million (GH¢235.40 million) were the realisation of more than expected inflows from corporate income tax and increased production.
It is, therefore, clear that nothing much is to be expected from the oil find this year.
Against this background, there is the need for the government to develop other sectors of the economy, such as agriculture and manufacturing as well as tourism to be able to rake in more funds to support national accelerated development and provide the needed jobs for the people.
This is because it is becoming evident that the economy cannot over-rely on the oil find to make any meaningful projections.