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Ghana is new on the scene, and while it may not have Angola’s reserves, it does have the advantage of better governance. The country went from producing zero oil in 2010 to becoming a major producer by the end of 2012. Some 13 discoveries have been made in the past three years. A key field is already reaching maximum production levels and new projects are ready to come on line.
Here’s the math: As of 2012, Ghana’s proven reserves were at about 660 million barrels, most of it in the offshore Jubilee field. But a recent find by Italy’s Eni (ENI.MI) raises that by about 20%, and exploration is only just beginning. Ghana thinks it’s really got several billions of barrels in reserves, which it hopes to confirm as more majors hit the scene.
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Jubilee: Run by UK-based Tullow Oil (TLW.L), crude production levels at this field are now at 110,000 barrels per day. In total, Jubilee has produced 50 million barrels of oil since it began commercial operations in 2010. Peak production will probably be about 120,000 bpd, which will likely be reached this year, so Tullow is now seeking other prospects, in deeper waters.
TEN (Tweneboa-Enyenra-Ntomme) Wells: Not far from Jubilee, this is what Tullow is now eyeing. These wells hold an estimated 380 million barrels of commercially viable oil equivalent, but will take around $4 billion in development investment. Tullow already owns a 49.9% stake in these wells along with Ghana’s state oil company, GNPC.
Sankofa East: This field is in the Offshore Cape Three Points Block. In late January, Italy’s Eni said its offshore drilling operations at the Sankofa East 2A block had confirmed commercial viability. Eni is estimating 450 million barrels of oil equivalent in place with 150 million boe recoverable.
Tano/Cape: In December 2012, Hess (in partnership with GNPC) announced its fifth discovery at the Deepwater Tano/Cape Three Points Block at the Pecan-1 well.
Good Governance, Sound Regulatory Environment
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In terms of the regulatory environment, Ghana is one of the more attractive African venues. It takes its cue from Norwegian regulatory frameworks and has a good, albeit embryonic, handle on managing its oil revenues, unlike much more corrupt Angola. It’s been a pretty impressive display of governance so far, especially considering that it had to start from the beginning with the oil and gas industry.
In 2011, Ghana passed the Petroleum Commission Act, which established an independent body to monitor and implement oil regulations and booted GNPC into the commercial sector. One problem that needs to be worked out, however, is the investment threshold: Right now, it’s a game for the majors or the larger of the juniors. The investment demands are too high and local oil and gas firms are particularly incapable of passing the bar.
By. Oilprice.com Analysts
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