Crude oil production in Ghana takes another down slide in the first half of 2023 based on recent upstream oil production data released by the Petroleum Commission of Ghana. The data show that in the first half of the year (H1), total oil production across the three oil fields (Jubliee, Sankofa Gye Nyame (SGN) and Tweneboa Enyenra Ntomme (TEN)) totalled 22.45 million barrels (bbls) which is approximately a 13% decrease below the H1 2022 output of 25.9 million bbls. Jubilee contributed 58.4% of the H1 2023 output whilst SGN and TEN contributed 25.4% and 16.2% respectively. The data showed a monthly average production of 3.74 million bbls across the three fields.
Source: Petroleum Commission of Ghana
The decrease in oil production in the first half of the year was occasioned by the decline in production across the three fields. Production at the Jubilee field dropped by 12% year-on-year from 14,906,957 bbls recorded in H1 2022 to 13,113,193 bbls in H1 2023. SGN recorded a total output of 5,712,890.81 bbls which is a 13% drop in the output recorded same period in 2022. Production at TEN also dropped by 17.5% amounting to a semi-annual output of 3,625,995 bbls as against the 4,394,067 bbls produced in the first half of 2022.
As at the end of June this year, a total of 20,960,779 bbls of crude have been lifted across the three oil fields with five liftings totalling 4,795,163 bbls undertaken on behalf of the government of Ghana.
Source: Petroleum Commission of Ghana
Unlike crude oil, gas production in the country has had a positive trend. Total gas production (both associated and non-associated) across the three oil fields rose marginally by 4% from 124,948.79 mmscf in H1 2022 to 130,065.22 mmscf in H1 2023. SGN produced a total of 66,492.95 mmscf (51.1%) of the H1 2023 gas output which comprised of 27,359.40 mmscf associated and 39,133.55 mmscf non-associated gas. Jubilee produced 35,618.89 mmscf of gas whilst TEN recorded a slight decline producing 27,953.38 mmscf of gas in the first half of the year.
Significant amount of gas produced in the country continues to be flared—a practice where natural gas associated with oil extraction are burned as waste which could otherwise be used for power generation or conserved. A situation constantly bemoaned by energy think tanks and the Public Interest and Accountability Committee (PIAC). Between January and June this year, a total of 15,483.91 mmscf of gas which is 12% of the total gas produced was flared.
The data also showed that a total of 17,734.16 mmscf of gas was exported to the Ghana National Gas Company from the Jubilee and TEN fields, whilst 36,375.30 mmscf was exported from SGN to the Onshore Receiving Facility (ORF) for the first half of 2023. Additionally, a volume of 5,480.18 mmscf gas was used for fuel. About 42% (54,458.88 mmscf) of the total gas produced was reinjected for pressure support at the end of the first half of the year.
Upstream development to Boost oil Production
The decline in oil production in the country has mainly been attributed to the overly dependence on old reserves and the lack of investment and development in previous years. However, Tullow Oil and its joint venture partners have recently undertaken significant investment and infrastructural development to boost future oil production.
In 2022, Tullow introduced four new wells (one new producer, two new water injectors and a previously drilled water injector) brought onstream at its Jubilee field. Earlier this year the company announced plans to introduce six new wells across the Jubilee and TEN fields this year which is expected to push the company’s production above 150,000 barrels per day (bopd).
On Friday 14, July 2023, Tullow announced the start-up of the Jubilee South East (JSE) project which is a joint project with its joint venture partners Kosmos Energy, Ghana National Petroleum Corporation, PetroSA and Jubilee Oil Holdings to drill wells and install the infrastructure needed to bring previously undeveloped reserves to production. The partnership has identified multiple future drilling locations and through an ongoing infill drilling programme expect to increase production at the Jubilee field over the next few years. An estimated $1 billion has been invested on the project over the last three years.
On Monday 17 July, 2023, Tullow announced that gross production at its Jubilee field has surpassed 100,000 bopd after a second well of the JSE project was brought onstream. It further reported that the two wells of the JSE project have increased production rates by 50% compared to the first half of 2023. Two additional wells are planned to come onstream this year to sustain the increased production.
“Reaching production of over 100,000 bopd from the Jubilee field is a major milestone for Tullow, our partners and for Ghana. I look forward to working with our partners to sustain these higher levels of production for several years and to realise the full potential of the Jubilee resource base. For Tullow, delivery of this step up in production is a key part of our business plan, in line with our commitment to deliver over $800 million of free cash flow between 2023 to 2025”, Dr Rahul Dhir, Tullow Chief Executive Officer noted.
Also, earlier this month, Pecan Energies, the operator of the Deepwater Tano/Cape Three Points (DWT/CTP) block offshore Ghana, announced the successful approval of the Plan of Development (PoD) for the DWT/CTP contract area by the government. The PoD provides an overall plan of both Phase 1a and Phase 1b development and production of the resources in the DWT/CTP contract area.
The Pecan field is deemed the largest of many discoveries in the DWT/CTP licence block with an estimated 268 million barrels expected to be produced in Phase 1a+1b with a CAPEX of $3.5 billion. Discoveries in the DWT/CTP licence block are estimated to hold 550 million barrels of recoverable resource potential.
Downstream development: Sentuo Oil Refinery to add value to Ghana’s crude oil
The Sentuo Oil Refinery has been touted to hold good prospects for Ghana in relation to adding value to the country’s crude oil. The project which is located in the Tema Industrial Zone and falls under the government’s One District One Factory” (1D1F) initiative is expected to begin full operation in January 2024 with the first phase expected to commence in August.
The refinery which is worth $1.98 billion investment of the Sentuo Group is envisioned to produce annually 5 million tons of processed petroleum products such as liquified petroleum gas (LPG), jet fuel, gasoline, diesel and fuel oil. The refinery is also expected to produce 350,000 tonnes of a series of pitch products, 200,000 tonnes of lubricating base oil and solvent naphtha and 400,000 tonnes of by-products such as polypropylene, ammonium sulphate, sulfuric acid and sulphur.
In a recent tour to the facility, the Minister of Trade and Industry Hon. Kobina Tahir Hammond expressed his delight about the project’s infrastructure and its potential to add value to the country’s crude oil by refining quality oil and gas products at affordable prices as well.
“I am overwhelmed by this huge structure. I have been seeing images of the plant and today I decided to pay a visit to see progress of work and in fact I’m impressed with what I have seen so far” the Minister noted.
The project is expected to reduce the country’s huge expenditure on the importation of petroleum products. In 2022, Ghana’s oil imports (crude, gas, refined products, and other oil products) rose sharply to US$4.70 billion from US$2.72 billion in 2021.