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Ghana: Jubilee field (oil) will produce 120,000 by april, GDP + 12,6% in 2011

By on December 13, 2010

Ghana’s Energy Minister,  Joseph Obteng Adjei confirmed  in an interview with Chinas Xinhua News Agency that offshore production from Jubilee oil field due to be inaugurated on December 15, could reach 120,000 barrels a day by April . However, production could rise beyond this level in the future, as additional wells and expanded facilities are brought on line, he said. The Jubilee field, discovered in 2007 by U.S. firm Kosmos Energy and operated by Anglo-Irish company Tullow Oil PLC (TLW.LN), is estimated to contain some 1.6 billion barrels of crude. Recently (September)  Tullow announced it had found another huge Ghana offshore oil basin, a 1.4 billion-barrel field called Owo-Tweneboa.

A recent  report by the Economist’s Intelligence Unit on Ghana’s economy states that  oil production will push up Ghana’s GDP by 14%  next year. The Governemnt’s budget  forecasts an increase of 12.6% with oil revenues  estimated by  finance Minister Kwabena Duffuor at 584 million cedis (406 million dollars).

The Country  is now  looking at a variety of ways of using the income expected by oil revenues.  Attractive proposals have been made by Chinese Government and oil companies and banks on this subject. Shortly said, they are disposed to anticipate the cash flow expected in the future by oil revenues, if they are given a greater access to Ghana’s hydrocarbon production.  Possibly by directly acquiring new oil and gas concessions. And in any case by establishing long term contracts with Ghana National Petroleum Corporation who will be able to sell significative quantities of oil from it’s own share of Jubelee’s production. This  formula is commonly known as the “Angola Mode”.  

In September, China Export Import Bank proposed to Ghana’s Government a credit line of 10.4 billion for infrastructure projects, and   China Development Bank proposed a separate 3 billion loan for the development of the country’s oil-and-gas sector.

At the time, Xinhua had reported that Chinese company Bosai Minerals Group Co. would build a bauxite and aluminum smelter with energy  supplied  by the associated  to oil production (energy covers about 50% of the cost of aluminium).  “This project could provide tens of thousands of jobs”,  minister Obteng Adjei said in the Xinhua interview.   Also in november, a joint $5 billion bid by state-owned Ghana National Petroleum Corpoartion and Chinas Cnooc (China National Offshore Corporation) to buy Kosmos’s 23.5% stake in the Jubilee field was rejected by the U.S. company.

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