By: Energy capital & power

Independent energy company Tullow Oil, in collaboration with its partners on the West Cape Three Points (WCTP) and Deep Water Tano (DWT) projects, signed a memorandum of understanding (MoU) with Ghana to extend the two licenses to 2040.

Comprising the Jubilee and TEN oilfields, the agreement will see the partners drill an additional 20 wells at the Jubilee field. This will increase the investment over the lifecycle of the licenses to $2 billion, aligning with goals to unlock additional 2P reserves. By the end of Q3, 2024, the partners seek to finalize the Jubilee Plan of Development Addendum, Gas Sales Agreement and requisite parliamentary approval.

“This MoU between the Republic of Ghana and the DWT and WCTP partners marks a significant step forward in our nation’s energy sector. Extending the licenses to 2040 demonstrates our commitment to fostering a stable and attractive investment climate. This MoU will not only ensure the continued production of oil, supporting our economic growth, but also allow us to further develop our infrastructure and create more job opportunities for our citizens,” stated John Abdulai Jinapor, Ghana’s Minister for Energy and Green Transition.

Under the terms of the MoU, the partners will increase gas supply from the Jubilee and TEN fields to 130 million standard cubic feet per day. The MoU also features a reduced gas price for Jubilee associated gas as well as a guaranteed reimbursement mechanism for gas sales. As a partner, the Ghana National Petroleum Corporation (GNPC) will work with the Petroleum Commission to invest in operational capacity, with a focus on advanced technology.

“This extension and the fiscal stability of our contracts emphasizes the opportunity Ghana represents to deliver additional value through production and reserves additions, providing greater long-term optionality and materiality to these core assets,” stated Richard Miller, Chief Financial Officer and Interim CEO of Tullow Oil.

Tullow Oil operates the licenses, alongside partners Kosmos Energy, PetroSA, GNPC and Explorco.