Tullow Oil: First Oil On Course

...Jubilee Field Compares With Gulf of Mexico, Brazil

Tullow Oil, has confirmed that first commercial oil flow from the Jubilee Field, where it is the Operator, is still on schedule for the fourth quarter of this year.

According to Tullow Oil, the around 40 months from the initial discovery of the Jubilee field in June 2007, to completion of appraisal, development activities and production of the first oil from this deepwater field, would be “an industry-leading performance.”

Tullow points out that the arrival in Ghanaian waters of the floating, production and storage offloading vessel, FPSO Kwame Nkrumah, was a significant development and operations were underway to connect all the flow lines and risers to the turret (the tower on the vessel).

The 330-metre long and 60-metre wide ‘FPSO Kwame Nkrumah’ has an oil processing capacity of 120,000 barrels per day and storage capacity of 1.6 million barrels and can produce 160 million standard cubic feet of gas per day.

“Well completions commenced in the first quarter of 2010, will continue throughout the year and production will see a gradual increase up to 120,000 bopd between 3-6 months after first oil, depending on the number of wells connected to the FPSO,” Tullow has revealed, giving responses to various questions.

FPSO Kwame Nkrumah is on a charter hire by the Jubilee Partners and is expected to produce first oil from the Jubilee Field in November this year, after successful test runs, under a first phase of operations which would initially be flowing 120,000 barrels of crude oil per day and is expected to double during the second phase, scheduled to commence in 2013.

Oil reserves in the Jubilee Field are estimated to be between 800 million and 1.5billion barrels of crude oil of the finest grade.

Tullow Oil, the operator of the Jubilee Field has 34.7046% stake, with Kosmos Energy (23.4913%), Anadarko Petroleum (23.4913%); Sabre Oil and Gas (2.8127%), EO Group (1.7500%) and GNPC (13.7500%) as partners.

Tullow Oil, has described the Jubilee Field, from where Ghana expects first Oil in November-December this year, as a world-class oil field, which compares very well to some of the larger discoveries in the Gulf of Mexico and Brazil. According to Tullow Oil, the Jubilee reservoirs are excellent quality and the crude is light and sweet (high grade). Jubilee has the distinct operational advantage of being located in an area of low current.

Additionally, “unlike the Gulf of Mexico there is no hurricane season to disrupt production and of course the environmental conditions in Alaska are significantly more challenging,” stated Tullow.

Tullow Oil, on June 12 deployed the Sedco-702 rig to commence drilling the Owo-1 exploration well in the Deepwater Tano licence. This well will be appraising the 1.4 billion barrels of oil equivalent upside potential in the Greater Tweneboa structure, which was initially discovered with the Tweneboa-1 & 2 wells. Tullow, is the operator of the Deepwater Tano block, holding 49.95% interest in this acreage. The well is expected to take around 60 days to complete and Tullow has further scheduled high-impact appraisal wells on the Tweneboa field later in the year.

Upon completion of the Owo-1 exploration well on the Tweneboa field, the Sedco-702 rig is scheduled to move east to drill the Onyina-1 exploration well in the Deepwater Tano licence.

Located between the Jubilee and Tweneboa fields, this well carries great prospects and Tullow announces further high-impact appraisal wells in the pipeline on the Tweneboa field later in the year.

“The Atwood Hunter rig, which recently drilled the Mahogany-5 well, is due to recommence operations for the partnership at the end of the year with an exploration well planned in the West Cape Three Points licence,” disclosed Tullow Oil.

Tullow has acquired acreages across the Equatorial Atlantic region over the last few years, and in West Africa the Group has deepwater exploration licences in Ghana, Liberia, Sierra Leone and Côte d'Ivoire.

Tullow reveals that it has been trying to replicate the success it has chalked in Ghana by identifying Jubilee-type leads and prospects across the region. In 2009 Tullow followed its Jubilee success with discoveries at the Tweneboa field in Ghana and the Venus field in Sierra Leone.

In the second half of 2010 Tullow will be drilling further ‘high-impact’ exploration wells in Sierra Leone, Liberia, French Guiana and Guyana to test the Jubilee play outside of Ghana.

In South America it has licences in French Guiana and Guyana and has recently signed Heads of Agreements for a new licence offshore Suriname. Explaining the benefits that its recent Capital Markets event brings to the Ghanaian economy, Tullow said by showcasing its operations in the country to analysts that produce investment research for global investors, as well as getting them to meet influential Ghanaian stakeholders and hearing from in-country management during a day of presentations, they aimed at increasing understanding for this major project and the impact it will have for the people of Ghana.

Whilst the Chief Executive of the Ghana Investment Promotion Centre (GIPC) made a presentation on the investment potential in Ghana, Tullow highlighted its Social Enterprise activities, localisation plans to increase Ghanaian employees from 80% to 90% and education/training initiatives to further develop in-country skills.

The analysts would be reporting back to investors on their experiences and findings, which Tullow hopes will increase investor interest in Ghana’s new oil industry and the wider economy.

Tullow Oil, as a publicly listed company has Deloitte, as its independent auditors, who carry out a twice yearly audit on the company’s financial results, which are then published in March and August each year. A statutory Annual Report and Accounts is published every year along with the company’s Corporate Responsibility Report.