Tullow Oil says it will no longer re-inject gas at the Jubilee fields as government has agreed to accept the gas produced at the nation’s premier oilfield.
The company in 2019 bemoaned government’s inability to off-take gas from the Jubilee fields forcing the company to re-inject the associated gas from its oil which led to cuts in production.
The Executive Vice President and Managing Director of Tullow Ghana, Kweku Awotwi, in December 2019 said the company’s decision to revise its production target by about 30 percent was a result of challenges regarding the re-injection of gas into its wells at the Jubilee Fields.
“In Jubilee, one of the most important reasons for why we did not meet the target we set of about 170,000 barrels of oil per day is that we had a significantly reduced off-take of gas by Ghana Gas and that meant that we had to re-inject significant volumes of gas back into the reservoir,” Mr. Awotwi told journalists.
“The lack of demand for Jubilee gas is due to the Sankofa gas taking priority. If less Sankofa gas is offered and GNPC nominates more of Jubilee’s gas, the current plant capacity could max out”, Mr. Awowti stated.
At the time, he said discussions on increasing gas off-take by the government were ongoing.
Mark Macfarlane, Chief Operating Officer of Tullow Oil Plc, speaking at the press briefing to present the company’s 2019 financial results said the company views the agreement with government as a breakthrough.
“Last year I explained that our gas oil ratio in Jubilee was increasing and we needed to do two things. Firstly, we needed to increase the gas handling capacity on the FPSO to run about 175 cubic feet a day of gas. That was successfully completed in November. The second thing that we needed to do, was to increase the amount of gas that we exported from Jubilee, and the government of Ghana has changed its gas policy to prioritize gas from Jubilee and Tein, and have committed to take a 125 standard cubic feet of gas a day, and we have the ability to flare gas if we need to.”
Tullow Oil, which is the lead partner of the Jubilee and TEN fields, could not meet its production targets last year due to technical problems at Jubilee as well as a delay in the completion of a well at the TEN fields.
Tullow also faced challenges with its plans to develop oil fields in Uganda and Guyana.
The company also encountered difficulties at its Tweneboah-Enyerra-Ntomme (TEB) fields, regarding one of its wells, which had to be suspended, leading to a cut down in the overall production target of the TEN fields.
Owing to its challenges, the company announced a revision to its key production figures stating that oil production was expected to hover around 87,000 barrels of oil per day (bopd) this year, while lower production in 2020 of between 70,000 and 80,000 (bopd), as it undertook a review of its production performance issues.
The Africa-focused oil firm also suspended its dividend as it aimed to generate more cash to support future investment plans and current explorations.