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ACCRA - The Government of Ghana has signed a Memorandum of Understanding (MOU) with Tullow Oil (LON:TLW) plc, Kosmos Energy (NYSE:KOS), PetroSA, Ghana National Petroleum Company (GNPC), and Explorco to extend the production licenses for the West Cape Three Points (WCTP) and Deep Water Tano (DWT) to 2040. These licenses cover the Jubilee and TEN fields, key assets in Ghana’s energy sector.
Under the MOU, the consortium is authorized to drill up to 20 additional wells in the Jubilee field, with an investment potential of up to $2 billion over the lifespan of the licenses. This extension is expected to significantly increase gross 2P reserves for the joint venture partners.
The agreement includes several principles aimed at enhancing the development of the Jubilee and TEN fields. Notably, there is a commitment to boost the gas supply from these fields to approximately 130 million standard cubic feet per day, along with a reduction in the gas price for Jubilee associated gas and a guaranteed reimbursement mechanism for gas sales.
In addition, the MOU outlines investment in GNPC and the Petroleum Commission’s capabilities, emphasizing the adoption of advanced technology. The existing terms of the WCTP and DWT Petroleum Agreements will remain unchanged.
Following the MOU, the next steps involve the submission of a Jubilee Plan of Development Addendum, the establishment of new gas sales agreements, and the submission for parliamentary approval of the payment security mechanism and license extensions, expected before the end of Q3 2025.
Ghana’s Minister for Energy and Green Transition, Hon. John Abdulai Jinapor, expressed that extending the licenses to 2040 reflects the country’s commitment to creating a stable investment environment, ensuring continued oil production, and fostering economic growth.
Richard Miller, CFO and Interim CEO of Tullow, emphasized the importance of the extension for Ghana and the joint venture partners, citing the potential for additional value through production and reserves additions.
Andy G. Inglis, CEO of Kosmos, also remarked on the MOU’s role in attracting new investment and maximizing the value of Ghana’s oil and gas fields for the country’s economic development and the benefit of Kosmos’ shareholders.
This strategic move is based on a press release statement and is anticipated to have a long-term positive impact on Ghana’s energy sector and the involved companies’ operations.
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