Gov't strikes US$2bn deal with energy majors, extend oil licences to 2040

The West Cape Three Points (WCTP) and Deep Water Tano (DWT) blocks are important for Ghana's oil production. They contain the Jubilee and TEN fields, which are highly productive.

A new memorandum allows joint venture partners to drill up to 20 more wells in the Jubilee field. This will increase gross 2P reserves, enhancing energy security and fiscal revenues for Ghana.

The deal also aims to nearly double gas supply from these offshore fields. The target is about 130 million standard cubic feet per day. Gas pricing terms will be lowered, helping reduce government energy sector liabilities.

A guaranteed payment mechanism for gas sales is included in the agreement. This addresses long-standing payment issues between the government and upstream operators.

Energy Minister John Abdulai Jinapor called this memorandum a significant step forward. He noted it reinforces Ghana’s commitment to a stable investment climate and job creation.

All existing terms under current petroleum agreements will remain unchanged. Tullow operates the Jubilee field and sees this extension as crucial for growth in West Africa.

Richard Miller, Tullow’s interim CEO, stated that this is a valuable step for all parties involved. The extension emphasizes opportunities for additional production and reserves in Ghana.

The partners plan to invest in GNPC and the Petroleum Commission. They aim to enhance capacity using advanced technologies for better operations and oversight.

Kosmos Energy views this deal as a strong signal of policy continuity under President John Mahama's administration. CEO Andy Inglis highlighted its importance for creating an attractive investment environment.

Next steps include submitting an addendum to the Jubilee Plan of Development. They will formalize new gas sales agreements and seek parliamentary approval by the end of Q3.

The government aims to extract more value from hydrocarbon reserves while preparing for energy transition. The extended licenses offer a chance to leverage upstream potential during this shift towards decarbonization.