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06.01.2010 Business & Finance

Kosmos spills oil

By Daniel Nonor & Bismark Beli - Ghanaian Chronicle
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Reports reaching The Chronicle indicate that even before Ghana pours its first oil in the latter part of the year, there has been major spillages of oil at the Jubilee Oil Field late last year and early this year.

The Chronicle gathered that on December 26, 2009, often referred to as Boxing Day, Kosmos Energy, one of the development partners in the Jubilee Fields, spilled over 700 barrels of a substance said to be a mixture of oil and mud.

Tullow oil on the other hand, also spilled some 37 litres of oil on January 1, this year, as a result of a breakage in their link pipes, which was reported to the Environmental Protection Agency (EPA), The Chronicle gathered.

Sources close to The Chronicle say, Kosmos has explained that the spillage took place under the sea bed, and so did not affect marine life.

When The Chronicle contacted the Deputy Director of the Environmental Protection Agency, Mr. Amlalo, to ascertain the facts of the incidents, he could not confirm or deny the story, except to say that a team of technocrats, headed by the Executive Director of the EPA, had embarked on a trip to the Jubilee Field to ascertain the level of spillage or otherwise.

“I cannot tell the quantity of oil that has been spilled until the team returns,” he said.

The Jubilee Field is operated by Britain's Tullow Oil, in partnership with private equity-backed Kosmos Energy, and Ghana's Ghana National Petroleum Corporation (GNPC).

The field, one of West Africa's biggest oil strikes in recent years and likely containing recoverable reserves of at least 1.2 billion barrels of oil equivalent, is expected to produce about 120,000 barrels a day by the last quarter of the year.

While this isn't close to the amount being produced in the larger oil players in Africa — namely Nigeria and Angola — oil production could bring Ghana $1 billion a year in revenue by the end of next year, the International Monetary Fund (IMF) estimates.

Although its has been estimated that two-thirds of the world's oil reserves are in the hands of powerful state companies, such as Saudi Arabia's Aramco and Venezuela's PDVSA, West Africa, with its small fraction of the world's proven reserves, continues to be a honey-pot for foreign investors, as expects say there are very few places left in the world where international oil companies can book such high reserve.

The field has in recent months received fair attention on the international front, as oil giants battle to get a share of the field. Kosmos has been trying to sell its 23.5% stake in the Jubilee field, estimated to hold some 1.8 billion barrels of oil, to Exxon for a price tag of about $4 billion.

But, this agreement has vehemently been opposed by the government of Ghana, who is considering cutting a deal with a leading Chinese oil company for the stake.

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