101101ogj_Ghanainsert_1 1 10/18/10 10:04 AM contents A new era for Ghana 1-2 The clock counts down to first oil, A new Era for Ghana 3-8 First Oil and Beyond and to economic transformation 9-10 Supporting Growth 11-16 Building a Downstream Powerhouse 17-20 Powering Up 21 n 2007, exactly fifty years after gaining A Champion for Africa I its independence, the West African 22 nation of Ghana made the offshore oil Data and References discovery that is now poised to help transform the countrys economy and turn it into an upstream and downstream energy hub for the region. Foreign investors from across the world, including international oil majors from the US and Europe and state-owned oil companies from China and elsewhere, are now lining up to enter the country, staking out early positions in a brand new territory, and seizing this rare opportunity to ramp up their reserves. The first oil from the Jubilee field, up to John Atta Mills, President of Ghana All production and editing was done 1.8 billion barrels of light crude oil and by Star Communications. For more associated gas reserves in deep water in the information: Gulf of Guinea, is set to start flowing by the proved to be a curse as much as a blessing in www.star-communications.us end of 2010, after one of the fastest countries such as neighboring Nigeria, development times ever seen in the global Ghana is pushing through new legislation Writing: offshore industry. that will try to ensure that the oil and gas Mark Beresford Production from the field, which is discoveries serve to raise the standard of Production Development: operated by Tullow, will start in November living across the country. Danielle Jacobsen or December and within six months will be pumping at As Ghana becomes an oil-producing Design & Layout: 120,000 barrels per day (bpd) of nation, we will maximize for all Ghanaians any Dispar Comunicación oil and 120 million cubic feet benefit that we can accrue from this bounty Photos: (mcf) of gas. It is then expected to John Atta Mills, President of Ghana Courtesy of Cirrus Oil Services, Ghana Ports ramp up to 250,000 bpd in a and Harbour Authority, Kosmos Energy, second phase from 2014, with peak As Ghana becomes an oil-producing MODEC, Tullow Oil, WAGPCo. production around 2015 to 2016. nation, we will maximize for all Ghanaians Meanwhile, deepwater exploration and any benefit that we can accrue from this Geological Maps: discoveries are continuing in the area, with bounty, President John Atta Mills said in his Courtesy of Tullow Oil the Tweneboa and Owo fields looking State of the Nation address in February. My particularly promising. vision is to use the oil and gas discovery to Published November 2010 Over the next few years, oil revenues will transform the Ghanaian economy from its The publisher wishes to thank the many replace gold and cocoa as the main exports over-dependence on primary raw materials organizations and individuals whose con- and drivers of the economy. The International to a diversified, prosperous 21st century tributions made this edition possible. Your Monetary Fund (IMF) forecasts that the industrial nation. contributions are appreciated enormously. country will receive about US$1 billion in Ghana is characterized by the stability Special thanks to Daniel Bernard of Oil and revenue per annum for the next 20 years and relative transparency of its political and Gas Journal and to the staff of the magazine from oil production in the Jubilee Field alone. economic institutions. These will be crucial for their support and cooperation. And while hydrocarbon resources have in ensuring the successful management of 101101ogj_Ghanainsert_2 2 10/18/10 10:04 AM 02 oil revenues and in attracting the estimated US$16 billion that the country needs to develop its energy sector. Following free elections in December 2008, there was a peaceful change of government in January 2009, and this stable democracy has received high level international recognition. In July 2009, US President Barack Obama chose the country for his first African visit, in a strong show of support. On the economic front too, Ghana has been enjoying high and steady expansion, Introduction with economic growth averaging an annual 6% over five years. The International Monetary Fund however expects the Atwood Hunter at sunset economy to expand by 20.3% in 2011, based on investment in the oil sector and The government believes that as a nation revenues, from models inspired by countries revenues from the oil discoveries. we can benefit immensely from transparency, such as Norway and Trinidad and Tobago. As far back as 2003, the country began Energy Minister Dr. Joe Oteng-Adjei said at The country has also placed environmental the process of implementing the Extractive a conference in February. With transparency concerns at the heart of the development of Industries Transparency Initiative (EITI) for comes an improved investment climate, its oil and gas industry, exemplified by the its mining industry. Reflecting its promise to because it provides a clear signal to investors rigorous no flaring policy that is being the transparent use of revenue from and international institutions that the applied by the Ghana National Petroleum extractive industries, the country is now government is committed to doing what Corporation (GNPC), the national oil company. implementing EITI in its oil and gas sector. is right. Equally, the government is also committed Transparency International has rated Ghana Continuing its commitment to international to a sustained early effort in investing its number four in sub-Saharan Africa in the best practices, Ghana will also implement oil and gas windfall in the development of the 2009 Corruption Perception Index. them in the management of its hydrocarbon countrys human resources, and in improving competitiveness and infrastructure. In particular, the national power grid and electricity generation and distribution are set to expand significantly, after years of underinvestment and supply shortages. The success of Trinidad and Tobago in sharing the benefits of the sector with the local population has inspired the local content policy: the government wants to increase the capabilities and competitiveness of domestic businesses, and is targeting local participation of up to 90% in the oil and gas value chain by 2020. With the offshore upstream sector generating relatively little employment, the development of a Ghanaian downstream industry, based largely on the natural gas discoveries, will be key to realizing the countrys economic vision. And foreign capital will have a major part to play in this development process. In the downstream, dynamic private sector companies have emerged that are investing heavily in new infrastructure and services, and are actively looking for partnerships with foreign companies to support their expansion. From across the countrys energy sector, the message to foreign investors is clear: Ghana is open for business, it is committed to transparency, and it is well prepared for the challenges of the new economic era that it is now entering. 101101ogj_Ghanainsert_3 3 10/18/10 10:04 AM 03 First Oil and Beyond Deepwater drilling leads to major hydrocarbon discoveries Petroleum Resources ne of the most striking features of its promotional activities; as well as invested O Ghana s upstream industry has heavily in staff training, including both been the pace of development, with just Change academic training and staff secondment or three and a half years from the discovery of attachment to E&P companies and to seismic the Jubilee field in July 2007 to expected for Tomorrow data acquisition and processing companies. first oil production by the end of 2010. The crowning result of this concerted On 21 June, Kwame Nkrumah, the Floating > effort in exploration was the discovery of the Production Storage and Offloading (FPSO) Jubilee field in the Tano/Cape Three Points vessel named after the founder of modern oil basin in 2007. Ghana, arrived in Ghanaian waters from The field, which lies about 60 kilometers Singapore. The vessel is now moored on station off the Ghanaian coast, straddles the Deepwater above the Jubilee field, while the installation Tano basin license operated by Tullow, and and commissioning process continues. the West Cape Three Points basin in which Installation of the subsea equipment, Tullow has a 22.9% stake and which is mainly supplied by Technip, started in operated by privately owned Kosmos Energy. January 2010 and is now more than 75% The cost for the development of Phase 1 complete and nearly ready for integration of the 110 square kilometer Jubilee field, is with the FPSO, constructed by Modec, which estimated by Tullow at US$3.35 billion. A includes the biggest turret ever constructed. WATER WELL PROJECT total of seventeen wells will be drilled in The credit for what is one of the fastest Phase 1: nine production wells and eight ever deep water developments must go water/gas injection wells. Phase 1 is both to the technical expertise that Tullow, In 2007, officials from Tullow and local authorities expected to produce oil and gas for twenty the Jubilee operator, has deployed in Ghana, identified the lack of clean drinking water as to twenty-five years. and also to the strength of the partnership the most urgent problem in the district of Jomoro Despite the fast-track development, the between Tullow, the other owners of the field in the Western Region of Ghana. The company health and safety record of the project has - Kosmos, Anadarko, Sabre Oil & Gas and immediately launched an initiative to install been impeccable, with only two lost time mechanical and hand-pumped water wells EO Group - and the Ghanaian government, incidents for the 3.7 million hours worked.