Development & Operations
Tullow’s exceptional exploration success has provided an exciting and growing portfolio of development and production assets in both Africa and South America. In 2011, we have strengthened our operational organisation through a new regional business structure, comprising West & North Africa, South & East Africa and Europe, South America & Asia, which provides focused leadership of our operations. In addition, we have created a new Development and Operations Group at a corporate level that combines all our engineering and development functions. This is to ensure that Regional Business Units are provided with world-class technical resources and access to the most appropriate technologies.
Excellent EHS performance
In 2011, we also delivered an excellent EHS performance with the lowest LTIFR in our history, in addition to a best in class FPSO performance in Ghana and no LTIs since its arrival in Ghanaian waters in June 2010. Our goal is to consistently achieve top quartile industry performance and, in line with the new organisation, we have significantly enhanced our EHS capability through improvements to our EHS resources, reporting structures and the introduction of new standards.
The next steps in Ghana
Having brought the Jubilee field on production in November 2010, Phase 1 development activities continued throughout 2011 as the final producers and injectors were commissioned and production rates increased. However, production from Jubilee in 2011 was lower than anticipated and this is being remediated through the installation of newly designed well completion equipment. We anticipate that the issue will be resolved this year allowing us to achieve plateau production in 2013. Production will also be supported by Jubilee Phase 1A which will include a total of eight additional wells. Utilising the existing FPSO, acquired in December 2011, the Phase 1A operations are expected to take around 18 months to complete at an estimated cost of $1.1 billion.
During 2011, a successful E&A programme on the TEN cluster enabled Tullow, as Operator, to initiate FEED works in August. We have established a project office in Singapore and FEED work has been carried out on the FPSO and subsea infrastructure options with a Plan of Development (PoD) expected to be submitted to the Government of Ghana in the third quarter of this year. We expect first oil to commence some 30 months after approval with combined production in the region of 100,000 bopd. Initial gas production will be split between export and re-injection to manage reservoir performance.
2012 working interest production
2012 production is forecast to average between 78,000 and 86,000 boepd with an exit rate of over 90,000 boepd expected. Gross Jubilee production is currently around 70,000 bopd and is expected to average 70,000 to 90,000 bopd in 2012.
Our medium-term priority is to ensure we do the right things to deliver the critical elements that will enable us to maximise the long-term value and recovery rates from the field.
Further production growth
Due to the delays in Uganda, the ability to progress development activity was limited during 2011. With the successful completion of the farm-down in February 2012, the partnership can now plan to accelerate activity with the aim of submitting a PoD to the Government of Uganda later this year. Some small scale production is envisaged to start late 2012 but substantial production is expected approximately 36 months after a basin-wide PoD is approved by the Government. Based on this timetable, ramp-up to major production should commence in 2016.
Elsewhere, the exciting discovery made in French Guiana will be appraised in 2012 to allow for an early review of development concepts. In Mauritania, where we took over Operatorship of the C-10 licence this year, we are reviewing concepts to progress the Banda oil and gas discovery. In Namibia, we are continuing to pursue development of the significant Kudu gas field. In addition, approximately 40% of our development capital is invested incrementally in mature producing fields, significantly offsetting production decline in these assets.
