Ghana earned $112m from first oil lifting

By: Stephen Odoi-Larbi

Ghana earned a whooping $112.271,187 from 995,259 barrels of crude oil lifted from the Ghana Jubilee Fields at Cape Three Points in the Western Region, according to official figures released exclusively to The Chronicle, from the Head Office of the Ghana National Petroleum Corporation (GNPC) at Tema.

According to the figures, contrary to general speculations that Ghana’s oil might have been sold at a cheap rate on the international market, the first oil lifted by the GNPC was sold above the international market for Brent crude.

The Chief Executive Officer of the corporation, Nana Boakye Asafu-Adjaye, told The Chronicle that a barrel of the first lifting by the corporation, sold at $112.86 on the international market, at the same time the British Brent crude was doing the rounds at $110 a barrel.

“The first company (Tullow Oil) that lifted oil sold it at a discount. Then the price started climbing. It would get to a point that there would be consistency in the premium over Brent.

“By that, you can now know the value to give out. The first consignment lifted by GNPC on 9th March, this year, sold at a price of $112.86 per barrel,” Mr. Asafu-Adjaye explained, oozing with exhilaration.

According to the Chief Executive, the Ghanaian Government had anticipated a market value of US$110 per barrel, when it first lifted its share of the Jubilee light crude oil on the night of March 9, 2011, but little did she know that the escalating oil prices on the world market was going to be an added advantage.

Overall, Ghana earned US$112,271,187 from the sale of the oil produce, which was paid into the GNPC’s account on April 8, 2011.

For the first lifting of the Jubilee light crude, Tullow Ghana Limited reported that the price obtained was over US$90 per barrel.

Explaining why Ghana still buys oil from the international market at an expensive price, when the state owned oil company, GNPC, which holds 13.75 percent interest in Jubilee Fields, was lifting oil and selling on the international market, Nana Asafu-Adjaye said the Jubilee light crude oil was a new product on the world market, and like any new product, it needs to be branded in order to carve the right market position internationally.

“To get the value that we so much desire, the world must know the product. To get value for the Jubilee light crude, we really have to market it until all refineries in the world are satisfied with the quality,” Nana Asafu-Adjaye told The Chronicle.

Currently, Ghana produces 67,000 barrels per day from five out of the nine wells in the Jubilee Field. Officials of the GNPC further anticipate that by the middle of this year, all the nine wells in the Jubilee Field would be utilised, in order to get a production capacity of 120,000 barrels per day.

“We are producing from five wells out of the nine drilled wells. By the middle of this year, around June or July, we will have all the nine wells producing. Currently, we are producing around 67,000 barrels per day.

But, around June or July, we will hit close to 120,000 barrels per day,” the CEO said, flanked by Mr. Andrew Badoo, Director of Administration, and Mr. Thomas Manu, Director of Exploration, both of GNPC.

In November 2010, Ghana started production of oil in commercial quantities, with the first cargo of crude oil from the Jubilee fField lifted in January 2011 by Tullow Ghana Limited (the British company owns 34.7% stake in the Jubilee Field), and EO Group (has 1.5% stake in the Jubilee field). The quantity lifted was 649,064 barrels, which was marketed and sold through their agent, Vitol SA.

Subsequently, Kosmos Energy Ghana HC, which owns 23.49% of the field, lifted 989,360 barrels of Jubilee light crude in January 2011, whilst Anadarko WCTP Company (23.5% stake) and Sabre Oil and Gas Holdings Limited (2.8% stake in the Jubilee field) also jointly lifted 996,708 barrels of Jubilee light crude on February 9, 2011.

In terms of pricing, Nana Asafo-Adjaye said the oil markets are very volatile with spot prices changing daily.

However, the GNPC boss said for the country to get optimum value for the Jubilee light crude oil, there ought to be consistency in terms of quality from all the nine wells in the Jubilee Field.

This, he said, would build confidence in major refineries across the world, after having access to the Jubilee light crude oil.

“Bonny light is an index bench mark crude. Brent is also a bench mark. They have been producing since 1974. We have just started, and it will take us some time. As it is known, and the brand is established, that optimum value in terms of price for the crude oil would be attained,” said Mr. Manu, Director of Exploration at the GNPC.

“The more you sell out, the more you are able to achieve for the establishment as a brand,” he added.