Accra: The Government of Ghana, alongside Tullow Oil plc, Kosmos Energy, PetroSA, GNPC, and Explorco, has entered into a Memorandum of Understanding (MOU) to extend the West Cape Three Points (WCTP) and Deep Water Tano (DWT) licenses until 2040. This agreement encompasses the Jubilee and TEN fields in Ghana.
According to Ghana News Agency, the MOU includes approval to drill up to 20 additional wells in the Jubilee field, representing an investment of up to $2 billion over the lifespan of the licenses. A statement from Accra indicated that the joint venture partnership anticipates a significant increase in gross 2P reserves due to the extension.
The MOU outlines several principles to support the continued development of the Jubilee and TEN fields. These principles include commitments to increase the gas supply to approximately 130 mmscf/d, reduce the gas price for Jubilee associated gas, establish a reimbursement mechanism for gas sales, and invest in the capacities of the Ghana National Petroleum Corporation (GNPC) and the Petroleum Commission, with a focus on advanced technology utilization.
The statement confirmed that all terms and conditions of the existing WCTP and DWT Petroleum Agreements remain unchanged. The subsequent steps following the MOU include submitting a Jubilee Plan of Development (PoD) Addendum for approval, finalizing new gas sales agreements (GSA), and seeking parliamentary approval for the payment security mechanism and license extensions by the third quarter of 2025.
Mr. John Abdulai Jinapor, the Minister for Energy and Green Transition, emphasized the significance of the MOU, stating that it demonstrates Ghana’s commitment to fostering a stable and attractive investment climate. He highlighted the MOU’s potential to ensure continued oil production, support economic growth, develop infrastructure, and create job opportunities.
Mr. Richard Miller, Chief Financial Officer and Interim CEO of Tullow, remarked on the extension as a valuable step forward, underscoring the collaborative relationship between the parties involved. He noted that the extension and fiscal stability of the contracts offer opportunities for additional value through production and reserves additions.
Mr. Andy G. Inglis, Chairman and CEO of Kosmos, acknowledged the MOU as a recognition of oil and gas importance in Ghana and the new administration’s aim to create an attractive investment environment. He highlighted the extension’s potential to maximize field value for Ghana’s economic development and benefit Kosmos’ shareholders, expressing eagerness to work with President Mahama and his government to advance Ghana’s energy sector.