In 2004, the country sold licenses for offshore oil exploration and production blocks to different international companies. In July 2007, Tullow Ghana Limited and Kosmos Energy discovered oil in commercial quantities in the Western Region of Ghana. The area was named the “Jubilee Field”. Development of the production site started right away and in December 2010 oil production was officially launched. Since 2007 further discoveries have been made. The TEN Field is a second major discovery which is being developed. Production of crude oil from the Jubilee Field begun with 85,000 barrels of oil a day in the Jubilee Field off the coast of Ghana as was announced by Tullow Ghana Limited, one of the jubilee partners. During the second half of 2012, Tullow Ghana and its partners discovered three other fields Tweneboa, Enyena and Ntomme, popularly known as ‘TEN‘ and therefore submitted a development plan to the government for these fields.
Currently, production in the jubilee fields stands at 105,000 barrels a day. The Jubilee field is a world-class oil field, with estimated recoverable resources of about 1 billion barrels. The advent of the oil and gas activities significantly changed the structure of the Ghanaian economy. The industrial sector, of which oil and gas activities form a part, grew to 36.2% in 2011 from 5.6% in 2010. More development wells are being drilled by other licensed companies and the jubilee partners, and some wells are indicating significant gas reserves. The latest of such exploratory drilling was completed in the first quarter of 2013 by HESS Corporation as it drilled seven exploratory wells. The wells labelled as Paradise-1, Hickory North-1, Beech-1, Almond-1, Pecan-1, Cob-1 and Pecan North-1 were drilled on the Deepwater Tano/Cape Three Points block offshore Ghana.
According to HESS Corporation, Paradise-1 contains both oil and gas while Hickory North was found to contain large quantities of gas. Previous discoveries include:
- Mahogany-1/ Hyedua-1
- Odum-1
- Ebony-1
- Mahogany Deep
- Sankofa
- Dzata
- Teak
- Akasa
Location of oil exploration and production blocks
The Jubilee field is located in the Gulf of Guinea, 60 km off the Ghanaian coast, near the Côte d’Ivoire border. It is spread out in the Deepwater Tano and West Cape Three Points blocks. The wells are at a water depth between 1,100 and 1,300 meters and at a total depth between 3,400 and 4,200 meters. The field covers 110 km2, which is about the size of 155 football pitches (Offshore-Technology.com, 2011). The Tweneboa field (6 km east of Jubilee) was discovered in March 2009. In July 2010 the Owo-1 drilling confirmed the reasonably big amounts of hydrocarbon in the field. A maximum depth of 4,000 meters has been drilled. There does not seem to be an underwater channel connection between the Tweneboa and the Jubilee field. Apart from these major findings, there are also several smaller wells close by. In total, the companies engaged in the discovery have discovered more than 15 wells in the western Ghanaian sea territory. The exact positions of the wells have become of great interest, as in April 2010 the Government of Côte d’Ivoire enquired, if all drillings had taken place within the Ghanaian territory. Since then a Boundary Commission has been negotiating the exact maritime boundary. In particular the Owo-1 well in the Tweneboa field and the small Dana GH Western Tano field are located very close to the Côte d’Ivoire border.
Facilities of the Jubilee Field
Nine production wells bring the oil and gas from below ground to the surface. In addition, there are eight drillings to inject gas and water. This was done to maintain the field pressure and to get rid of the gas, since there was no pipeline to the shore. The gas plant has now been completed and gas flaring which is forbidden in Ghana has now practically ceased. All 17 wells are connected to the Floating, Production, Storage and Offloading (FPSO) Kwame Nkrumah vessel. On the FPSO a daily maximum of 120,000 barrels of crude oil will be separated from gas and water. Most of these by-products will be pumped back through the injection wells. 15% of the gas will be used for power generation to run the FPSO. Transport ships collect the oil from the FPSO every 7 to 10 days for delivery to various refineries worldwide.
Update on Petroleum Reserves and Petroleum Agreements Signed in 2014
Ghana's total proven reserve base for 2014 is approximately 876/7 million barrels of oil and 2.3 trillion cubic feet (tcf) of gas. The four (4) major fields in the country are the Jubilee Field, currently producing at a daily average of 102,630 bpd, and in the second phase of development; the second producing field is the Saltpond field which is producing a daily average of 267 bpd, the TEN field, currently under development and had made a progress of 35.9 percent as at 30th September, 2014. The fourth field is the Sankofa-Gye nyame (SGN) Field. The Plan to develop the SGN Field has been submitted and currently under review for possible approval.
As at September 2014, eight (8) new Petroleum Agreements (PAs) had been ratified by Parliament, namely the:
- Expanded Shallow Water Tano Block with CAMAC;
- Offshore Central Tano Block with Amni International
- Offshore Cape Three Points South PA with UB Resources Limited
- South West Tano Block with Heritage/Blue Star
- Ultra Deepwater East Keta Blocks with Heritage/Blue Star
- Shallow Water Cape Three Points PA with Sahara Energy Fields
- South-West Cape Three Points PA with A-Z Petroleum Products; and
- South West Saltpond PA with Brittania-U
Developments in Exploration and Other Petroleum Activities Since the Jubilee discovery in 2007, twenty-three new discoveries have been made. These discoveries are at various stages of appraisal and development by GNPC and its partners. The table below details the stage of appraisal and development of the discoveries so far.
Crude Oil Refineries
Jubilee crude oil is light and sweet. For oil refiners, lightness and sweetness indicates high quality. Independent laboratory analysis says that the crude oil has an API Gravity of 37.6 degrees and a sulphur content of 0.25 % (weight), with no unusual characteristics. Crude oils of this type are attractive for worldwide refineries and can compete with the international price reference oils.
Currently, Ghana has only one refinery: the state owned Tema Oil Refinery (TOR), with a capacity of around 45,000 barrel per day. Due to some financial and technical problems, the refinery seldom worked at upside production rate in the past. Even if TOR had run at its maximum of 45.000 bpd, in 2009 this would have met only 50-60% of the domestic fuel demand. The country is highly depending on fuel imports.
The Oil Policy of the Government of Ghana
The ‘Petroleum Revenue Management Bill’
In early 2010, the Government of Ghana proposed a ‘Petroleum Revenue Management Bill’. The purpose of this legislation is to regulate the use and management of the rents that will be generated through the oil industry. The Petroleum Revenue Management Bill (PRMB) has been passed by Parliament to provide a legal framework for the management of revenue from the country’s oil find with key features being the establishment of the Ghana Heritage Fund and the Ghana Stabilisation Fund. The bill now Act 815 provides a framework to guide the efficient collection, allocation and management of petroleum revenue for the benefit of current and future generations of Ghana. It also aims at ensuring that the overall management of petroleum revenue is based on sustainable fiscal policies that surpass political regimes, as well as make provision for clear assignment of responsibilities, from collection to final utilisation of petroleum revenue within a transparent and accountable framework. Developments in the Structure of the Upstream Petroleum Sector as at 2014
Government is taking steps to strengthen the management of the oil and gas sector in Ghana. To this end, a number of measures have been put in place to ensure the efficient management of the industry. The measures including the following:
The Local Content and Local Participation Regulations came into effect in February 2014. The Petroleum Commission is working to increase the level of local content and local participation in Ghana’s upstream oil industry and et has approved a draft Bill to replace the Petroleum Exploration and Production Law, 1984 (PNDC Law 84), which will be laid before Parliament. The main organizations overseeing activities in the upstream petroleum sector are the:
ENERGY INDUSTRY
Government Policy for the Electricity Sector
Ghana’s stated policy goal with regard to electricity was published as the “Statement of the National Energy Policy” by the Ministry of Energy in February 2010. The Government seeks to attract private investment in the industry to support the public sector to improve and expand the capacity of existing electricity supply infrastructure to improve security of supply and make the Country a net exporter of electricity by 2015.
A major policy objective is to create the enabling institutional, regulatory, pricing and market operations framework that will attract private sector investments to increase installed generation capacity from about 2,000 MW (2010) to 5,000 MW in the medium term. Renovate has proven results for setting exceptional standards in cost control, planning, scheduling and project safety. We have experience that gives us a competitive advantage over others in our field.
Wholesale Electricity Market
The Wholesale Electricity Market (“WEM”) was established by law in 2008 for wholesale electricity trading and the associated provision of ancillary electricity services. GRIDCo, as the market operator, has been charged to ensure procurement and dispatch of electricity generating plants and ancillary services in a transparent and non-discriminatory manner. The EC is also to oversee the operations of the WEM. The market is to be regulated by a set of Market Rules, market manual, and dispute resolution procedures yet to be issued by GRIDCo. A grid participant must meet the technical requirements of the Grid Code as well as enter into a connection agreement with GRIDCo to gain access to the grid.
Entities licensed as Distribution Companies or granted a permit as a Bulk Customer by the EC are entitled to enter into bilateral agreements with Wholesale Suppliers to supply their power needs. Under the LI, electricity generated from the Akosombo and Kpong Hydro Plants cannot be procured under bilateral contracts.
The removal of the non-competitively priced hydro energy, which is blended with thermal and sold in the deregulated market, is expected to help obviate the undermining effects of cheaper hydro on competition and create the needed market opportunities for IPPs. Additionally, the anticipated windfall gain from the proposed competitive pricing of hydro energy is to be transparently applied towards funding the subsidy implied by the principle of “lifeline tariff” as well as to support other specific national socio- economic objectives.
Under the evolving market structure, the operator of the WEM – GRIDCo; is charged to procure and dispatch electricity from the facilities of wholesale suppliers in a fair, transparent, and non-discriminatory manner. To ensure least cost of supply, provision of electricity to the market is based on economic merit-order dispatch principles. Participation in the WEM is open to wholesale suppliers, electricity distribution companies and bulk customers which have been granted permits by the EC. The spot market price for electricity is to be based on the system short-run marginal cost of supply. Transmission charges are uniform throughout the country. Rates for electricity supplied by the wholesale suppliers to the distribution companies, the rates at which the distribution companies sell to their retail customers as well as the transmission service charges are subject to PURC approval.
Structure of the Electricity Sector and the Major Sector Institutions
Ghana’s electricity sector has been under reforms since the mid-1990s. The main objective of this reform is to create an enabling environment that can attract capital for expansion of electricity supply infrastructure. Currently, the sector has an unbundled structure with separation of generation from an open-access high-voltage transmission network. There are two main distribution companies with two separate respective defined distribution areas in the southern and northern parts of the country. The industry structure provides for bulk customers, i.e. large customers with load demands above 3 MW, which may contract directly with bulk sup- pliers for supply of electricity. The Ministry of Energy & Petroleum, together with the Energy Commission and the Public Utilities Regulatory Commission perform certain critical regulatory and licensing roles in the sector, as described below..
Planned Projects
In addition to the committed projects above, there are a number of planned projects. These projects are at various stages of pre-construction development. They include:
- The Aboadze T4 (T3X) 200 MW Project,
- The 340 MW Cenpower Power Plant
- 378MW Astro Power Plant at Aboadze
- Expansion of the TT1PP and TCTPP plants into a 330 MW combined cycle plant,
- 450 MW West African Power Pool (WAPP) Power Plant,
- VRA’s 2 MW Solar,
- VRA’s Wind Farm,
- VRA’s 450 MW Domunli Power Plant,
- Juale 87 MW Hydro Plant,
- Pwalugu 48 MW Hydro Plant,
- Daboya 44 MW Hydro Plant,
- Kulpawn 36 MW Hydro Plant, and
- Expansion of the Tema Thermal 2 Power Project (TT2PP) - Siemens Plant.
- Development of the General Electric GE1000 1,000 MW Project
- Amandi 200 MW combined cycle thermal power plant at Aboadze
- Jacobson 350 MW thermal power plant at Aboadze