Ghana counts down to oil production …But could end up with only 14% stake

Ghana's jubilee fields will start pouring oil in commercial quantities in the last quarter of 2010, but Ghana could end up with a paltry 14% stake in the fields if it fails to stall the Exxon, Kosmos deal.

The Ghana National Petroleum Authority cannot exercise a pre-emption right, which allows it to solely bid for additional shares from its development partners in the jubilee fields, The Chronicle has learnt. To take up additional shares, however, it would have to bid for the stake with others if any of its development partners was ready to sell.

GNPC could only prevent sales on grounds that the buyer lacked the technical or financial muscle to develop the field. The GNPC lost that right after it once exercised its right to increase its shares from an initial 10% in the jubilee field to 14%, The Chronicle has been informed.

This means GNPC cannot stall the Exxon Mobile Kosmos deal according to the partnership agreement. It would have to bid for the stake with the likes of US oil giant Exxon Mobile and other interested parties for Kosmos' stake in the jubilee field.

A few months ago, it emerged that Kosmos Energy, one of development partners in the jubilee fields was in talks with Exxon Mobile in a $4 billion deal, which would see the US oil giant take up Kosmos' stake in the Jubilee field.

Government of Ghana has since been in a rift with Kosmos by strongly opposing the deal on grounds that Kosmos breached part of the development agreement that it had with the GNPC, when Kosmos opened up sensitive data to Exxon Mobile without consulting GNPC as the agreement demanded.

The Ghana National Petroleum Authority is in talks with other interested parties such as British Petroleum and CNOOC Limited-a Chinese state owned Oil Company to fund a purchase of Kosmos stake in the jubilee field.

Jubilee on fast track
Meanwhile management of Tullow, operators of the field with a 34.7pc interest holding say the field's development is on fast track to the 2010 target. This is mainly due to technical risks, quality of the crude and political pressure, explains Aidan Heavey, Chief Executive Officer of Tullow Plc., when he met a section of the Ghanaian media in Accra last weekend.

By November 2010 the Jubilee Phase 1 project would be expected to produce 120,000 barrels of oil per day in the first six to ten months of production, rising to around 250,000 within two years.

According to Aidan Heavey, drilling of the Tweneboa well, Tullow's latest discovery in the Jubilee Field will commence next month. Tweneboa is said to have a potential nearly as big as that of Jubilee Field, containing some 1.8 billion barrels.