Oil exploration giant, Tullow Oil Plc says Ghana’s lack of infrastructure to process the natural gas associated with the Jubilee Field is not the reason for its failure to reach

“This is a new field; we cannot rush it. We cannot push to ramp-up production to get high numbers so everything looks great, and then we damage the wells. We can’t do that,” said Founder and Chief Executive, Aidan Heavey.

He told Business and Financial Times in an interview: “We are looking after the oil, the government is looking after the gas; and so what we’re looking at is how to manage the field. Whether we produce gas or not is not going to affect the 120,000 barrels.”

“There has been lots of talk about Jubilee’s production target. Setting a target is one thing, but you don’t rush into it -- you have to do it properly so that you don’t have issues. We will not take a risk to produce 120,000 barrels at Jubilee because it needs to be managed properly.

“Jubilee is a credible, valuable asset for Ghana, and has to be managed properly -- that is a key issue. With a new field, you learn as you go along and take technical information and make sure nothing is done to damage the field in the long-term, because the important thing is the asset,” Heavey explained.

Jubilee was originally planned to reach a plateau output of 120,000bpd this year, but now that peak-level is expected to be reached in 2013. This year, output from Jubilee will range from 70,000 to 90,000 barrels per day.

He explained that Tullow and its partners are determined to fix the technical issues relating to some wells at Jubilee. Together, they need to invest about US$400million to fix mechanical issues related to well designs at the field.

Jubilee is a world-class oil field, with estimated recoverable resources of up to 1billion barrels.
Tullow in a recent statement disclosed that Ghana government has approved the next phase of development for the Jubilee Phase 1A.

“Government of Ghana approval for the next phase of development, Phase 1A, was received on January 9, 2012.” The total cost of Phase 1A is expected to be approximately US$1.1billion and drilling of wells is expected to commence in February 2012.

“The development will consist of eight new wells, five producers and three additional water injectors and the expansion of the subsea network. It will be conducted over an 18-month period,” Tullow explained.
After drilling, Tullow said it expects that production of oil from the phase will be “brought onstream from the second quarter.”

The company expects to invest US$2billion in capital expenditure this year, compared with US$1.4bn in 2011. This will be spent on projects including drilling off the coast of French Guiana, where the British explorer announced a large discovery in September 2011.

The company also announced a new frontier exploration partnership with Shell in the Atlantic basin. Tullow said the planned partnership will focus on making "transformational" discoveries in underexplored frontier basins.

Tullow has interests in over 85 exploration and production licences across 23 countries in Africa, Europe, South America and South Asia.