TEN oil project to cost $4.9b as Tullow plans to sell part
The cost of developing the Tweneboa, Enyenra and Ntomme (TEN) oil fields offshore Ghana is estimated to be around $4.9 billion, according to operators at the field.
The TEN’s Plan of Development (PoD) which was approved by the Ghana government in May 2013, is expected to deliver first oil production in 2016 with production staged up to a facilities-designed plateau production rate of 80,000 barrels of oil per day.
According to Tullow and Kosmos Energy, the gross project cost of TEN excludes the leasing cost of a new floating, production, storage and offloading (FPSO) vessel which will be supplied by MODEC.
“The overall cost of the development is now estimated to be $4.9 billion, excluding FPSO lease costs,” said Tullow July 31, 2013 adding that provisions for gas export are also included in the development plan.
Meanwhile, Tullow said it has begun processes to sell part of its 50% stake in the TEN oil project.
The Wall Street Journal reported July 31, 2013 that Tullow’s Chief Executive Aidan Heavey said there had already been a lot of interest in TEN from potential buyers, including major Chinese oil companies, even before the process had officially begun.
The report said the UK oil explorer plans to give a potential buyer as much as a 20% stake in return for the buyer paying for the development costs up until the first oil is produced.
The company plans to open a data room late August, get bids in around the end of October and finalize the process in the first quarter of 2014, Tullow’s Chief Financial Officer Ian Springett said, according to the Wall Street Journal.
Tullow indicated that it has appointed financial advisors and begun early marketing of the share.
“Quality projects like this in very stable countries are hard to come by. This is very much a sellers market,” Mr. Heavey was quoted as saying.
The increase in development cost, Tullow said in its 2013 half-year results, is “associated with an expansion of the scope to enhance the recovery from Ntomme and facilitate gas export, in addition to receiving updated bids for major contracts.”
The development of the TEN Project involve the drilling and completion of up to 24 development wells which will be connected through subsea infrastructure to an FPSO vessel, moored in approximately 1,500 metres of water.
The company indicated that farm down discussions with the Ghana government have been initiated after the TEN PoD approval was made.
The TEN project is Tullow’s second development offshore Ghana after the Jubilee fields.
By Ekow Quandzie