Ghana Pumps First Oil

The die was cast on Wednesday December 15, 2010, when President John Atta Mills of Ghana, performed the ceremony that ushered his country into the league of oil producing nations of the world, by turning the valve on an offshore FPSO platform and onshore in Takoradi. The ceremony which was broadcast live on Ghana TV set the First Oil pumping from the Jubilee field. After three and a half years of hard work and innovation, following the discovery of oil in Ghana in 2007, the government of this 23 million population country with the Jubilee partners made kept their promise by pumping out the Fist Oil as scheduled.

In a statement released by Tullow Oil, one of the Jubilee partners, Oil first flowed into the FPSO on Sunday 28 November and e oil was used to commission the facilities. The Jubilee partners are: Tullow Oil plc (34.70%), Anadarko Petroleum Corp (23.49%), Kosmos Energy (23.49%), GNPC (13.75%), Sabre Oil and Gas (2.81%), E.O. Group (1.75%).

It is expected that the initial oil production rate will increase to 55,000 barrels of oil per day, and then gradually multiply to 120,000 barrels per day, with the completion of new wells within the coming three to six months. Ghana, hopes to export the first tanker of crude oil from the Jubilee field in January 2011. If the export plan works out accordingly, Ghana is expected to earn $400m in the first year of business as an oil exporting nation.

Reacting to the mood of the day, Aidan Heavey, the Chief Executive Officer of Tullow the major partner in the Jubilee operations said:

"History will be made today and I am very proud to be part of it. First Oil from the Jubilee field is a wonderful occasion for Ghana, its Government and People, the Jubilee Partners and Tullow. It is the culmination of a lot of dedication and hard work from a world-class team on a world-class field. So many people deserve recognition and thanks today, my personal thanks go in particular to the Government of Ghana. Their support and commitment to this project helped the Jubilee Partners ensure that First Oil for Ghana became a reality. Congratulations to everyone involved” 

While most of the consortium operating in Ghana estimates that its offshore oil fields contain about 3billion barrels of oil, World Bank ranges Ghana’s reserve between 800 million – 1billionbarrels of oil or more. The government of Ghana expects a 6% boost of its revenue through the sales of crude oil and a progressive stimulation of the nation’s economy. It is expected that by 2015, the GDP of Ghana will increase from the present $36.58billion to $40billion. Nigeria, the number one producer in the region gets 90% of its revenue from crude oil sales, while 100% of Angola’s revenue is fuelled through oil exportation.

With a proven reserve of about 3billion commercial barrels of oil and abundance gas locked beneath, Ghana is hoping to launch into a new stardom that will transform its economy. To ensure that this nation known as a model of democracy in Africa does not contact the malady known as “Dutch disease” as is common among resource-rich nations in the region, the government of President John Atta Mills, has presented a draft local content policy to the Parliament which if signed into law will encourage the involvement of Ghanaians in oil and gas business and also improve transparency. Also Ghana has began  to draft the Oil Revenue Management Bill which will stipulate how the expected revenue from oil business in the country would be used to ensure equity, industrialization and support infrastructure development. However, it would have been thought that industry experience, common sense and cases of mismanagement of oil revenues by some African countries and the ugly effects on their nations would have been enough lessons to make the government of Ghana to get these laws in place before commencing exportation of oil in January 2011.