Jubilee

Excellent progress on Jubilee Phase 1 development

In Côte d’Ivoire, the South Grand Lahou-1 well, chasing the Jubilee play, was drilled in the CI-105 licence in October 2009. It encountered the targeted reservoir sands on prognosis but found them water-bearing at this location. The data gained is however providing valuable proprietary insights into the Jubilee play fairways and will be followed up with the acquisition of 2,300 sq km of 3D seismic data over the CI-103 and CI-105 licences with a view to firming up additional prospectivity.

The Jubilee Phase 1 development project continues to meet key project milestones, is on track for first oil in the fourth quarter of 2010 and remains within its US$3.1 billion budget. The project will produce first oil approximately 40 months after the field was discovered, a new benchmark for global deep water developments. Significant regulatory milestones were also achieved in 2009 including the formal approval by the Government of Ghana of the Jubilee Plan of Development, the signing of the Field Unitisation Agreement and the approval of the Environmental Impact Assessment (EIA). Further development phases, to access the significant resource potential of the Jubilee Unit Area, up to 1,000 mmbo, are now being prepared and will include further infill wells, additional subsea systems and reviewing the possibility of increasing the capacity of the Floating, Production, Storage and Offloading vessel (FPSO).

Good progress was made on the FPSO construction in Singapore during 2009. All process modules and the external turret have now been installed and module integration and commissioning work is ongoing. Fabrication of the subsea equipment including manifolds, risers, flowlines and control umbilicals was completed in 2009 and installation work commenced in January 2010. The FPSO is scheduled to leave Singapore for Ghana in the second quarter of 2010 and will be connected to the subsea network during the fourth quarter of 2010.

Phase 1 development includes nine production wells which are expected to produce at a plateau rate of 120,000 bopd. Pressure support will be provided by six water injection wells and two gas injection wells. The wells are being drilled and completed by the Eirik Raude semi submersible rig. Operations to date have been on time and on budget with 16 wells drilled and the installation of production tubing and completion equipment now under way. Well completion operations, expected to take approximately 15 months, commenced in February 2010. Well results continue to be in line with pre-drill expectations. Well testing has proven deliverability in excess of 20,000 bopd per well and reservoir connectivity over distances exceeding six kilometres.

Gas produced during oil production will initially be re-injected to provide pressure support for production. An export project to deliver gas to shore for power generation is however under consideration by GNPC. It is expected that in the longer term, the Jubilee field will supply approximately 70% of its associated gas to this scheme.