The Government of Ghana, together with Tullow Oil plc, Kosmos Energy PetroSA, Ghana National Petroleum Corporation (GNPC) and Explorco have jointly announced that they have entered into a Memorandum of Understanding (MoU) to extend the West Cape Three Points and Deep Water Tano licences to 2040, which cover the Jubilee and TEN fields in Ghana.

This was captured in statement issued by Tullow Oil to JOYBUSINESS.

The MoU includes approval to drill up to 20 additional wells in the Jubilee field, representing investment of up to $2 billion in Ghana over the life of the licences. As a result of the extension, the joint venture partnership expects to realise a material increase in gross 2P reserves.

Details of MoU

• A number of principles are covered within the MoU which will help underpin the continued development of the Jubilee and TEN fields, including:
• A commitment to work to increase in the supply of gas from the Jubilee and TEN fields to c.130 mmscf/d
• A reduced gas price for Jubilee associated gas
• A guaranteed reimbursement mechanism for gas sales
• Investment in Ghana National Petroleum Corporation (GNPC) and the Petroleum Commission’s capacity with a focus on the use of advanced technology.

The statement added that all terms and conditions of the existing West Cape Three Points and the Deep Water Tano Petroleum Agreements remain in place and continue unchanged.

Next Step for partners

The Jubilee and TEN partners added that, the next steps, following the Memorandum of Understanding   are the submission for approval of a Jubilee Plan of Development (PoD) Addendum, entering into new fully termed gas sales agreements (GSA), and the submission for parliamentary approval of the payment security mechanism and licence extensions planned before the end of the third quarter of 2025.

Government and Partners on the MOU

Reacting to the Memorandum of Understanding, the Minister for Energy and Green Transition,  John Jinapor noted that the development marks a significant step for nation's energy sector.

“Extending the licenses to 2040 demonstrates our commitment to fostering a stable and attractive investment climate”, he said.

He argued that the MoU will not only ensure the continued production of oil, supporting the economic growth, but will also allow the country to further develop its infrastructure and create more job opportunities for the citizens.

“We are dedicated to responsible resource management and look forward to a prosperous future fuelled by sustainable energy practices” he said.

On this part the Chief Financial Officer and Interim Chief Executive of Tullow Richard Miller described the MoU as a valuable step for the Government of Ghana, Tullow and their Joint Venture partners.

“The collaborative and constructive relationship we all have in reaching our shared goal of building a better future for the people of Ghana, through responsible oil and gas development,” he said.

He added that the extension and the fiscal stability of the contracts emphasize the opportunity for Ghana to deliver additional value through production and reserves additions, providing greater long-term optionality and materiality to these core assets.

The Chief Executive Officer of Komos, Andy Inglis also described the MoU as recognizing the importance of oil and gas in Ghana and the desire of the new administration to create an attractive environment for new investment in the sector.

“Extending the Ghana production licenses is highly accretive, adding material reserves and enabling the partnership to continue investing in the country for the long-term”, he added.