In recent times Ghana has emerged as a potential major new oil player in West Africa’s resource-rich region. Tullow Oil Ghana’s Stuart Wheaton tells Andrew Pelis of the challenges at the forefront of discovery.
West Africa has become a haven for oil and gas exploration and production since Nigeria joined OPEC in the seventies. The latest country to see benefit from this rich natural resource looks likely to be Ghana, following Tullow Oil’s discovery of the Jubilee Oil Field with its joint venture partners Kosmos Ghana HC, Anadarko WCTP Company, Sabre Oil and Gas, the EO Group and the Ghana National Petroleum Corporation (GNPC).
Indeed, Jubilee’s journey from discovery to production has been a meteoric tale of progress marrying the ambitions of the Ghanaian government with the expertise of London-listed Tullow Oil’s global resources and its partners.
“Many projects of this scale have been developed in West Africa before, but none as quickly as the Jubilee field,” admits Stuart Wheaton, Ghana development manager for Tullow Oil Ghana. “Usually these types of projects take up to five years to get off the ground but the Jubilee field was only discovered three years ago.
“We have been able to fast-track this project, thanks to government support and being able to just get on with the job, using proven technologies and designs as well as drawing on the vast experience of Tullow and partners’ global operations.”
Wheaton’s involvement with Ghana materialised equally rapidly. “I’ve been in the oil industry for 22 years now and joined Tullow back in May 2007, having worked with smaller oil companies for a few years around the world. I initially joined to work on the company’s Southern North Sea projects (the company having purchased fields and infrastructure when the bigger oil and gas companies started to sell their North Sea assets ten years ago). However, no sooner had I joined than the discovery of Jubilee happened and I was moved over to Ghana. I think the scale of the find was a welcome but genuine surprise to Tullow at the time!”
Drilling deepwater wells is an exacting exercise, but a science which benefits from the experience of Tullow’s operations. “The company has been involved in oil and gas exploration and production in all upstream areas of finding, drilling and developing platforms for over 21 years now,” Wheaton says.
“The company’s early growth began with investments in the North Sea a decade ago but it has had a presence in Africa since the mid-eighties. The group took a significant step in 2004 with the purchase of Energy Africa, a South African business with a large portfolio of exploration and production assets in Africa. This opened up opportunities across the continent, but Ghana is currently the most advanced major project in Tullow’s portfolio, with Uganda close behind.”
Tullow Ghana and its joint venture partners Kosmos Ghana HC, Anadarko WCTP Company, Sabre Oil and Gas, the EO Group and the Ghana National Petroleum Corporation (GNPC)—collectively known as the Jubilee Joint Venture—are developing the hydrocarbon resources within the Jubilee Field.
Wheaton believes that the company’s open and relaxed style has helped greatly in Africa and helped to develop the relationships needed for mutual trust and to attain permits and community buy-in from local residents. This approach was equally instrumental in attracting investment partners to make Jubilee a reality.
“So far this project has cost in the region of $4 billion, with Tullow investing around 35 per cent of that amount. Investors have to feel confident to invest in Ghana and Tullow. The government has encouraged our development of oil and gas, while the company has been in Africa for over twenty years—in fact, our first ever development was a gas field in Senegal.”
Jubilee represents Tullow’s first venture into Ghana and Wheaton says that there have already been subsequent discoveries made since the site was first discovered three short years ago. “We have our headquarters in Accra and a supply base at the Port of Takoradi. The first time I went over to Ghana the company comprised five people working in a house; today we employ around 240 direct workers and more than 1,000 contractor staff, which gives you a good indication of how quickly we have grown.”
The project has moved with impressive speed. Phase 1 involved building the infrastructure that connected subsea oil and gas production wells to a floating production storage and offloading vessel (FPSO) permanently moored in the Jubilee Field. The processed crude oil will be stored in the FPSO storage tanks and offloaded to oil tanker vessels for delivery to international markets approximately every seven to 10 days.
Jubilee has an average depth of 1,250 metres and is located roughly 60 kilometres offshore. Wheaton indicates that the FPSO is now in place, but despite the confidence behind the project, he says it has not been completely smooth sailing. “This was a completely new oil province so we had to build sites for storage and operational infrastructure, including helicopter facilities for transporting workers.
“One of our biggest technical challenges was presented by the undulations of the sea bed which contained large canyons and affected the flow lines. We also had to be mindful of the social and environmental impact, including not affecting local fishing boats; measures for preventing or dealing with oil spills; and waste management. We undertook an extensive Environmental and Social Impact Assessment (ESIA) and held lots of public consultations.”
ESIAs are standard practice for Tullow, and in Ghana they are mandatory for oil and gas field development and must be presented to the general public for scrutiny prior to final governmental approval. Wheaton’s experience of such requirements played its part in securing the required permits to work in Ghana; and a vital part of the process was to gain government buy-in on the benefits to the country.
Wheatonsays that Tullow has a commitment to assisting the country’s growth. “Initially we had to go to international contractors, given the specialist nature of deepwater drilling and development. However, one of the areas where we continue to grow is our procurement in Ghana. Over the last two years we have been investing between $100,000 and $250,000 each week into the Ghanaian economy by using local suppliers; and last year alone we spent more than $75 million altogether with Ghanaian businesses. Building that up has been important to us and has been a good indicator of our commitment. In the future if we want to increase capacity at any of our sites, this will stand us in good stead regarding the government and the people.”
That capacity may well be needed too, given the progress Tullow is currently making on its second Ghanaian site, Owo-Tweneboa. In July this year the company announced that the Owo-1 exploration well in the Deepwater Tano licence offshore Ghana has intersected a significant column of excellent quality light oil. Results of drilling, wireline logs and samples of reservoir fluids have established Owo as a major new oil field requiring further appraisal.
As Tullow’s Ghanaian operations grow, it will look to employ increasing numbers of Ghanaian workers. While in-house training will inevitably play an important role given the country’s general lack of specifically-skilled people, Wheaton says that Ghana in fact has an excellent education structure. “There are direct oil and gas limitations here but there is a very high quality education system and we have recruited local graduates, while other extraction industries like gold mining and aluminium bauxite mining have produced workers with the types of experience that we can make real use of.
“When you factor in that many Ghanaians go overseas for tertiary degrees and then want to return home, we were able to recruit quite a few Ghanaians living abroad and bring them back here. This has been a real pleasure to see and we have only just begun. We want to run a sustainable operation and develop national staff. Today we operate with 85 per cent of employees coming from Ghana; in the next five years we’ll make that over 90 per cent. We are committed to the Ghanaian government to make this a national staff-led company and we currently have some 20 local graduates going through our training programme.”
Wheatonadds that technology plays its part in making operations a success, with satellites and survey vessels playing a vital role in the highly technical world of deepwater drilling. “Things are hugely different from when I started out in this industry and with the media as it is, there really is no place to hide if you have a problem, an emergency or even an oil spill. Today I can look in real time at activity on our development rigs, from the sanctuary of my desk in London and we do that in Accra also. I have to say also that Ghana is indeed very IT-proficient, which has helped operations greatly.”
Aside from the progress being made at Owo-Tweneboa, Tullow is excited by the potential shown in Uganda. “This is currently going through the exploration and appraisal phases but shows great promise,” Wheaton comments. “However, our main focus for now is on Jubilee where we would expect a payback in the next four to five years. Our initial direct Ghana infrastructure investment of around $35 million covered offices, helipads and upgraded shore facilities and to give you an idea of spend, we then spend another $60 million to $80 million per year on fuel alone. We are now in the final stages of hook-up at Jubilee and hope that the first oil production will begin this November/December this year.”
Jubilee should be in full production next year and at capacity, Tullow’s aim is to produce 120,000 barrels a day. Jubilee is believed to contain between 500 million and one billion barrels. “It should have a lifetime in excess of 20 years although future appraisal and development of the reserve may extend this period significantly,” says Wheaton.
That is not only good news for Tullow, but also for the country that Wheaton describes as “a pleasure to work in”. www.tullowoil.com