Jubilee Fields repairs to cost GNPC $70m

Lorlornyofm
By Lorlornyofm May 24, 2017 06:06

Jubilee Fields repairs to cost GNPC $70m

The Ghana National Petroleum Corporation (GNPC) is to contribute US$70 million as its share of the cost of permanently repairing the entire Jubilee Fields off-shore Cape Three Points in the Western Region, a report by the Finance Committee of Parliament has revealed.

The major remedial works, funded by the Jubilee Field Partners, have become necessary to secure the structural integrity of the oil field and the Floating Production Storage and Offloading (FPSO).

The Committee, in its report submitted and approved by Parliament said “[T]here was an incident with Jubilee that affected their operations. The option was to close the site down for repairs. This would have adversely affected oil production.

An emergency solution was to use the challenge, GNPC has to contribute US$70 million for the cost of repairing the entire Jubilee field. It includes repairing of the turret bearing, seawater pump injection and maintenance works for the FPSO, among others.”

A shutdown of the Jubilee Oil Fields will mean a cut in the supply of gas from the Jubilee Fields to the Atuabo Gas Processing Plant for onward supply to thermal power plants located within the western enclave for power generation.  The remedial works are projected to last for about 12 weeks.

Energy Minister, Boakye Agyarko, at the just-ended National Policy Summit said: “The gas processing plant at Atuabo is working but it is working under capacity. Instead of processing 150MCF, it is doing less than 100mscf. The geography [of the Jubilee Field] is a little bit temperamental. It’s a new field, it will take some time to establish its profile properly before we stabilise the gas output.”

The Vice President and Country Manager of Cosmos Energy, Joe Mensah, said the shutdown has become necessary to ensure higher production volumes on the FPSO.

In February 2017, the Jubilee Field was shut down for 15 days, to allow for an interconnection with the Tweneboa, Enyera and Ntomme (TEN) operations.

The turret bearing of the FPSO Kwame Nkrumah developed a fault last year, resulting in a prolonged shutdown which affected oil production. Although the problem has been partially resolved, the vessel is still not able to produce at its optimum capacity.

“Today Production in Jubilee is over 100,000 barrels a day and once we have to do those type of works, we might have to shut down for a few weeks here and there,” Mr. Mensah said.

GNPC was allocated a total of GH¢1.22billion for their operations in the 2017 annual budget. The allocation was to help the oil and gas–focused company meets its equity financing commitments amounting to US$228million.

These commitments include TEN Project (US$60m), Jubilee fields (US$70m), Sankofa (US$22m), Gas tie-in component (US$75m.

The GNPC has a standing agreement with its project development partners that 40percent of its oil liftings would be committed towards the payment of its equity financing cost.

Jubilee field production

Tullow Oil data shows that full year 2016 gross production from the Jubilee field averaged 73,700 bopd (net: 26,200 bopd).

Tullow also received reimbursements for turret remediation costs and Jubilee production field losses in 2016 of approximately US$8 million (net) under the Hull and Machinery insurance policy and approximatelyUS $72 million under Tullow’s corporate Business Interruption insurance cover which equates to 4,600 bopd of net equivalent production

Tullow expects 2017 production from the Jubilee field to average 68,500 bopd (net: 24,300 bopd), assuming 12 weeks of shutdown associated with the next phase of remediation works.

Tullow’s corporate Business Interruption insurance cover is expected to continue to payout in respect of lost production associated to the turret remediation works, and the equivalent average annualised net production is around 12,000 bopd, increasing.

Tullow’s effective net production to around 36,300 bopd in 2017, the company said on its website.

 Source: BFT
Lorlornyofm
By Lorlornyofm May 24, 2017 06:06
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