Fitch Solutions, research arm of credit rating agency, Fitch Ratings, has said it expects total oil production in the country to increase by 2 per cent before the end of 2020.
The projected increase by Fitch Solutions follows an increase in gross production from Ghana’s two largest oil fields which accounts for 80 per cent of total oil output – Jubilee and TEN fields.
According to Fitch, recent figures from Tullow Oil – the fields’ operator of TEN and Jubilee – show that gross production at the Jubilee and TEN fields averaged 136,700b/d between January and August, 2020, noting that the current production level is better than what Tullow Oil had anticipated coming into the year, as significant technical challenges in 2019 led to total gross production averaging 140,000b/d across both fields for 2019.
Based on last year’s poor oil production, Fitch notes that Tullow Oil had braced for further falls in output in 2020 as it set its output guidance for both fields at 132,000b/d at the start of 2020.
But luckily for Tullow Oil, despite the multiple headwinds – Covid-19 and some significant technical challenges – there has been a strong performance in oil output from January to August this year with output averaging 136,700b/d with the gross output expected to hold.
Accordingly, guidance from Tullow Oil for the full year has been revised upwards by 6 per cent, for production from both oil fields to average 140,000b/d (Jubilee, 90,000b/d, TEN 50,000b/d).
“Strong output at both fields is aligned with our view that Ghana’s total oil production will increase by 2 per cent in 2020. To be sure, this marks a significant step down from the 17 per cent growth achieved a year earlier in 2019,” said Fitch Solutions.
“Our longer-term outlook for Ghana’s crude oil production is positive, based on the expectation for continued field developments in the offshore blocks. Among the assets that hold the highest upside is the Pecan field located in the Gulf of Guinea, with total production capacity of 110,000b/d,” Fitch added.
The Pecan field, operated by Aker Energy, is an ultra-deepwater play offshore Ghana, and is the largest of several discoveries that were made in the DWT/CTP block offshore Ghana since 2012.
Aker Energy operates the block with a 50 per cent stake in partnership with Russia’s Lukoil (38 per cent), state-owned Ghana National Petroleum Corporation (10 per cent) and Fueltrade (2 per cent).
The field is estimated to contain about 334 million bbl of oil equivalents, and is expected to require an investment of about $4.4 billion.
Strong performance at Jubilee and TEN is a positive development for Ghana’s oil sector given they are Ghana’s two most productive fields.
Yet despite the recent performance at the two fields, growth in output still has further to go. Ongoing technical issues at both of Tullow Oil’s fields means their combined production currently remains capped about 70 per cent of peak capacity – Jubilee field’s total production potential is 120,000b/d while TEN’s is 80,000b/d.
Ghana – Total Oil Production (2018-2026)