Oil production in the country is anticipated to reach its peak with a production level of 297,190 barrels of oil per day by 2027.
The assertion by Fitch Solutions follows the anticipated development of Aker Energy’s Pecan fields with an estimated daily production of 110,000 barrels.
Aker Energy’s Pecan fields with first production expected in 2025, is an ultra-deepwater play in the DWT/CTP block offshore Ghana and is estimated to contain about 334 million bbl of oil equivalents.
The Pecan field according to Fitch Solutions holds the key to Ghana’s oil future as its successful development presents significant upside long-term outlook for Ghana’s crude oil production.
Having been initially expected to require an investment of $4.4 billion, Aker Energy and its partners are now aiming to reduce the capex needed for oil production from the Pecan field. They aim to find a development concept with a sustainable break-even price, should a low oil price environment continue.
“Due to the project revaluations, we do not expect to see FID until 2022. Following first oil in 2025, we expect Ghana’s oil production will peak in 2027 at 297,190b/d, as the field reaches plateau. Further delays to the Pecan project reaching FID in 2022 will shift the peak production to the tail end of 10-year forecast period,” said Fitch Solutions in its outlook on Ghana’s oil production.
Robust Outlook For Oil Production
Ghana – Total Oil Production (2018-2029)
f = Fitch Solutions forecast. Source: EIA, Fitch Solutions
“Overall, we expect to see sustained output from Ghana’s oil fields over our long-term forecast, owing to increased spending and the pending investment decision for the Pecan Field. The development of additional reserves offers significant upside to this forecast. An upside to our long-term outlook rests on the successful development of Ghana’s oil resources. So far, just 400mn bbl of oil (gross) has been produced from the Jubilee and TEN fields, out of the 2.9bn bbl in place – representing 14% of potential production.”
“As a result of the current ongoing and planned developments, there lies much potential for Ghana’s upstream sector. Yet the gradual declines of Ghana’s existing fields mean success is contingent on substantial investment and the fruitful development of the Pecan Field. Both these factors will be affected should the sustained weak oil price environment continue into our longer-term forecast,” added Fitch Solutions.
Meanwhile, targeted investments in the country’s oil production is expected to increase by 50 per cent next year.
This follows the announcement by Tullow Oil to increase its net capital expenditure (capex) on the Jubilee and TEN oil fields from $120 million in 2020 to $180 million in 2021.
Tullow Oil is the operator of Ghana’s two largest oil fields – TEN and Jubilee. The oil firm has plans to commence a multi-well drilling campaign in the second quarter of 2021.
According to Fitch Solutions, the $60 million more capex investment in Tullow Oil’s production will be significant for the country’s upstream sector since TEN and Jubilee are responsible for 80 per cent of Ghana’s total oil production.
Fitch Solutions in its report on Ghana’s oil and gas sector noted that given the planned investment by Tullow Oil, it had revised its previous forecast of stagnation in the country’s oil production and now expects an increase in production by 2 per cent from 2022 to 2024.
“Given the planned spending, we have revised our previous forecast, which anticipated a stagnation in production until Aker Energy’s Pecan Field comes online. We now expect an uptick in production to average 2.0% y-o-y between 2022 and 2024, as the planned drilling activity will help offset the declining output rates at Ghana’s fields. However, due to comparably weaker capex spending in 2020, we maintain our expectation that production will decline by 2.0 per cent in 2021,” Fitch Solutions said.
“The forecasted boost in Ghana’s oil output will be partly a result of improved gas offtake performance and higher water injection rates, which both help maintain higher production,” added Fitch Solutions.
