Sarah Kiggundu, Consultancy Africa Intelligence, South Africa, examines the West African oil boom and environmental sustainability in the Ghanaian oil industry.
Global trends and oil production in the Jubilee Field
Global oil demand is expected to rise by 8% between 2012 and 2018 to 96.7 million bpd.1 This evidence is based on optimistic IMF global economic growth assumptions – forecasted to be between 3 to 4.5% per annum, during this same six year period. It is believed that US shale oil will meet the world’s new oil demand in the next five years, regardless of whether the global economy improves or not, and this will eventually affect the Organisation for Petroleum Exporting Countries (OPEC) production levels. There are, of course, counter arguments with regard to whether shale oil will meet demand growth levels or whether the impacts of US shale oil are greatly embellished.2
The increase in US oil and natural-gas production is expected to shift the balance of power, providing the US with greater leverage, especially in times of political crises or to prevent oil producers from achieving their financial or geopolitical goals. Despite this market threat, from increased US shale oil production, African oil producers are now targeting the Asian and European markets. West African nations are not the only countries feeling the pinch. The OPEC members have cut the forecasted oil demands this year, owing to US growth production numbers. Cheaper oil has negative repercussions for OPEC countries, as well as states that are heavily reliant on their energy industry.
Ghana’s Jubilee oilfield is located in the Atlantic Ocean, approximately 60 km offshore between Deepwater Tano and the West Cape Three Points Blocks. What has come to be known as the Jubilee Oil field was developed by Tullow Oil. The equity partners are Tullow Oil, Kosmos Energy, Anadarko, Ghana National Petroleum Corporation and PetroSA. Extraction of the Jubilee field, Ghana’s first major offshore oilfield, began in December 2010. Since extraction began in 2010, production levels have ranged between 80 000 and 90 000 bpd. After a few technical alterations, production levels are now at 120 000 bpd. Oil production is expected to more than double to 250 000 bpd as oil output rises. Currently, production levels are at 48% of the targeted total. Taking all of this information into account, revenue from oil production is still anticipated to forward the country’s middle-income status.
- ‘Ghana, Jubilee Field Partners in Oil Block Feud’, Ventures-Africa, 20 July 2013, http://www.ventures-africa.com.
- Milhench, C. & Baghdjian, A., ‘Does the rise of U.S. shale oil mean fuel buyers can look forward to a multi-year period of crude price decline? Or is oil destined for new record highs above $150 a barrel?’, Reuters, 27 July 2013, http://www.reuters.com.
Part 3 of this article is available here.
Part 1 of this article can be reached here.
Adapted by David Bizley
Read the article online at: https://www.oilfieldtechnology.com/exploration/15112013/keeping_ghana_going_part_2/