West & North Africa
Tullow’s African production comes from Ghana, Equatorial Guinea, Gabon, Côte d’Ivoire, Congo (Brazzaville) and Mauritania. Whilst the main development and operating focus is on the Jubilee and TEN projects offshore Ghana, Tullow has significant ongoing development activities in the majority of its operational areas. The Group also has high-impact exploration acreage across this region in Mauritania, Senegal, Liberia, Sierra Leone, Côte d’Ivoire and Ghana.
Ghana
Tullow has interests in two licences offshore Ghana, Deepwater Tano and West Cape Three Points. 2011 activity included the ramp-up of production from the Jubilee field, further appraisal drilling which confirmed Enyenra as a major light oil field, and additional exploration success in the Ntomme-2A, Teak-1, 2 and 3A wells. Production operations on the FPSO Kwame Nkrumah continued to perform well with a low rate of unplanned shut-downs and no significant safety or environmental issues. Activity in 2012 will include the start of the Jubilee Phase 1A development and further appraisal and development activities on the TEN project.
Jubilee field 1 & 1A developments
The start of 2011 saw the first lifting of Jubilee crude oil from the FPSO Kwame Nkrumah, and since then over 30 million barrels of oil have been produced and 30 cargoes have been safely exported. Following the strong operating performance of the FPSO Kwame Nkrumah, Tullow, on behalf of the Jubilee Partners, acquired the FPSO from Modec on 29 December 2011. This acquisition will enable the Jubilee Partners to maximise the FPSO’s commercial value and operational efficiency whilst Modec will continue to provide operations and maintenance services.
The Jubilee Phase 1 development was completed in October 2011 when the last of the initial 17 wells were drilled, completed and brought on stream. Also at this time, the water injection design capacity for the FPSO was reached, with rates over 235,000 bwpd being injected into the reservoirs and pressure support being seen across the field. By the end of 2011, gas re-injection reached 80 mmscfd and gas flaring was reduced to minimal levels.
In 2011, gross production from the Jubilee field averaged 66,000 bopd (2010: 3,200 bopd), reaching 88,000 bopd before declining to approximately 70,000 bopd at the end of the year. However, production from the field was below expectations due to reduced productivity in a number of wells related to problems with the original well completion design. The issue is not expected to impact the level of field reserves or resources and a remedial work programme is under way to regain well productivity lost to date. This work involved the sidetracking of the J-07 production well using a new completion design which is now on-stream and being closely monitored. Further remedial work including acid stimulations and additional recompletions are planned for 2012.
The next phase of development for the Jubilee field is Phase 1A. Following approval gained from the Government of Ghana in early 2012, development started in February 2012, with the spudding of the first production well, and will continue over the next 18 months. The development is anticipated to cost approximately $1.1 billion and will consist of eight new wells, five producers, three additional water injectors and the expansion of the subsea network. The first of the Phase 1A wells is expected to come onstream from late in the second quarter of 2012.
The combination of the Phase 1 remedial work and the additional Phase 1A wells coming onstream will enable production to resume its build-up towards the FPSO design capacity of 120,000 bopd. Production is expected to average between 70,000 and 90,000 bopd in 2012, depending on the well performance achieved from the Phase 1 recovery programme and the execution schedule of the Phase 1A wells.
57,400boepd
Total production
657.8mmboe
Total reserves and resources
$1,944million
Sales revenue
$768million
2011 investment
Tweneboa-Enyenra-Ntomme (TEN) Cluster Development
During 2011, significant progress was made in the programme of appraisal drilling and flow testing of the Tweneboa, Enyenra and Ntomme fields, collectively known as TEN. Tullow anticipates developing the three accumulations in an integrated subsea cluster development scheme using a single FPSO.
The appraisal programme commenced in January 2011 with the drilling of the Tweneboa-3 well comprising two deviated exploratory boreholes drilled into the Ntomme prospect which was proven to be a material and separate gas-condensate accumulation. Appraisal of the Ntomme accumulation commenced in early 2012 with the drilling of the Ntomme-2A well, located over four kilometres south of Tweneboa-3. This exploratory appraisal well successfully discovered high-quality oil bearing reservoirs, below the Ntomme gas-condensate accumulation, reinforcing the overall TEN resource base potential.
Senior Drilling Supervisor with trainees on board the Sedco Energy during drilling of the Owo-1RA well, offshore Ghana.
Further appraisal drilling on the Enyenra field has continued during 2011 including the re-drill of the Owo-1 discovery well in December 2011, to allow testing and coring. To determine the level of reservoir connectivity and well deliverability, the well was flow tested. The lower channel was tested at a rate of approximately 10,000 bopd, and a commingled rate for the two upper channels was approximately 12,000 bopd. The pressure response will be monitored by pressure gauges deployed in the Enyenra-2A and Enyenra-3A wells, located to the south and north respectively. The Enyenra-4A well is currently drilling to determine the southern extent of the Enyenra field.
The TEN Development Project has made significant progress since the Front End Engineering & Design (FEED) commenced in August 2011. A design competition has commenced with three FPSO contractors and a local project office has been set up in Singapore to support this activity. Subsea FEED is nearing completion and tenders for this work are being prepared.
Tullow expects to submit the TEN Plan of Development (PoD) and a formal declaration of commerciality to the Government of Ghana in the third quarter of 2012. This will incorporate the information gained from the FEED work and the ongoing appraisal programme. First production from the TEN cluster development is anticipated to be approximately 30 months after Government approval of the PoD.
Exploration & Appraisal activity
In 2011, Tullow continued its exploratory drilling activity in Ghana, drilling the Teak-1, Teak-2, Teak-3, Banda-1, Akasa-1 and Makore-1 wells in the West Cape Three Points licence, operated by Kosmos. The Teak-1 well drilled in February 2011 encountered a thick tally of oil and gas pay, and the Teak-2 well drilled in March 2011 tested the fault block between the Teak-1 discovery and the Jubilee field, where it penetrated a gas reservoir that may represent a gas cap to the Jubilee field. The Teak-3 well was drilled in November 2011 and confirmed the northern extension of the Teak discovery, across a major fault. Plans are in place for the Teak-4 appraisal well and flow testing in 2012, the outcome of which will guide future development plans.
The Banda-1 exploration well in the east of the West Cape Three Points block was drilled in June 2011 to explore the previously untargeted Cenomanian play. The well found very thick but low porosity Cenomanian sandstones with only three metres of oil pay. The Makore-1 exploration well was drilled in July 2011 targeting a discrete Jubilee-type reservoir. The well found excellent quality sandstones which were unfortunately water-bearing at this location. These results have been integrated into Tullow’s regional geological model to enable better targeting of these plays elsewhere in Tullow’s Equatorial Atlantic acreage.
In August 2011, the Akasa-1 well (previously known as Dahoma up-dip) was drilled and made a light oil discovery. The Turonian reservoirs encountered are similar in age to those discovered at the Jubilee field and the oil samples recovered from the Akasa-1 well indicate 38 degrees API gravity. The West Cape Three Points operator, Kosmos, remains in discussions with the Government of Ghana in relation to further appraisal and development plans for the Mahogany, Teak, Banda and Akasa discoveries.
In the Deepwater Tano licence operated by Tullow, a set of attractive remaining prospects has been identified and exploration activity will be completed before the end of the first quarter of 2013. Three exploration wells are expected to be drilled on the block and potential prospects include: Wawa-1 which will target hydrocarbons that may have moved to a trap up-dip from the TEN oil and gas-condensate fields; Sapele-1, immediately south of the Jubilee field, will test a prospective turbidite lobe and Tweneboa Deep-1, a material prospect below the TEN fields.
EO Group Ghanaian interests acquisition and equity redetermination
On 26 May 2011, Tullow entered into a conditional agreement to acquire the Ghanaian interests of EO Group Limited (EO) for a combined share and cash consideration of $305 million. This acquisition increased Tullow’s interest in the West Cape Three Points licence offshore Ghana by 3.5% to 26.4% and increased the Group’s interest in the Jubilee field by 1.75% to 36.5%. The acquisition was completed on 25 July 2011.
In October 2011 the partnership completed the first equity redetermination of the Jubilee Unit Area (JUA) and the net result is that Tullow’s working interest in the JUA has reduced slightly from 36.5% to 35.5% which became effective from 1 December 2011.
Liberia & Sierra Leone
Tullow has four contiguous deepwater licences offshore Liberia and Sierra Leone where the Group is looking to capitalise on the success of the Jubilee play in Ghana. In May 2011, Tullow increased its equity from 10% to 20% in block SL-07B-10 (originally SL-06 and SL-07) in Sierra Leone by exercising pre-emptive rights. In November 2011, the Montserrado exploration well offshore Liberia was drilled and made a non-commercial oil discovery. Further analysis is being carried out following this result which will enable the partners to consider follow-up exploration targets in the play. Following the well in Liberia, the rig moved to Sierra Leone to drill the Jupiter-1 exploration well which finished in February 2012. The well encountered 30 metres of net pay in multiple zones, thus confirming a working hydrocarbon system in the Liberian Basin. The Mercury-2 exploratory well, a bold step out from the Mercury discovery, is currently drilling and is expected to complete in April 2012.
Côte d’Ivoire
Net production in 2011 from the East and West Espoir fields averaged 3,750 boepd (2010: 3,850 boepd). During the year, production was impacted by gas compressor issues; however, all four gas compressors are now operational and gas exports have recovered to full capacity. A drilling campaign of at least eight infill wells across West and East Espoir is planned to start in the fourth quarter of 2012. This campaign will rejuvenate production and extend the life of the field.
Following the lifting of Force Majeure for both deepwater exploration blocks, CI-103 and CI-105, the plan to drill one well in each block was reactivated. The Eirik Raude rig was released from Ghana and commenced drilling the Kosrou prospect (CI-105) in February 2012. The well is expected to complete in April 2012. This will be followed by the drilling of the high-impact Paon prospect (CI-103).
Rig floor of the RR 600 during drilling operations on the
Jobi-2 well in Exploration Area 1, Uganda.
74%
2011 E&A success ratio
Mauritania & Senegal
Production from the Chinguetti field in Mauritania continued to decline but at a reduced rate with full year net production averaging 1,400 boepd (2010: 1,500 boepd). Potential for further production optimisation in 2012 is being evaluated.
Two exploration wells were drilled in Mauritania in the first half of 2011. The Cormoran-1 well in Block 7 intersected four stacked hydrocarbon accumulations. In the deepest of these sections the well discovered highly pressured rich gas in the Petronia prospect, providing an encouraging test of our concept that Tullow’s core play in Late Cretaceous turbidites extends into northern Mauritania. The Gharabi-1 well in Block 6 encountered poorly developed water-bearing reservoir and was plugged and abandoned in February 2011. The well was drilled by the operator to meet a commitment on the block and the result has no impact on Tullow’s future plans for its Mauritanian acreage.
Tullow signed the new C-10 exploration Production Sharing Contract (PSC) in Mauritania on 27 October 2011 at an operated equity of 59%. This licence, the exploration area of the previous PSC A and PSC B, is over 10,000 sq km in area and carries a two-well commitment in the first three years. Tullow is planning a number of exploration activities across its various exploration licences in the Mauritania-Senegal basin during 2012 including 3D seismic acquisition and drilling.
In addition, Tullow has been granted extensions to the discovery areas of the previous PSC A and PSC B licences and increased its equity in these licences to 67.3% and 64.1% respectively. These licences, which Tullow now operates, contain the Banda, Tevet and Tiof oil and gas discoveries. The development of the Banda oil and gas discovery is progressing with project concepts under review.
Equatorial Guinea
The Ceiba field performed above expectation in the first half of 2011 but fell below 15,000 bopd gross in the second half of the year due to delays to the workover programme. Gross production averaged 19,915 bopd in 2011 (2010: 27,600 bopd). A major workover and infill drilling programme is now underway to restore production to higher levels. The Ocean Valiant rig moved to the field in January 2012 and began work on the first of the three well workovers before commencing the drilling of eight infill wells.
Production in the Okume Complex fell in the second half of 2011 due to a delay on the Akom North field tieback; gross production averaged 71,680 bopd in 2011 (2010: 82,360 bopd). The Akom North well was drilled and completed in late December 2011 and first oil was produced in January 2012. A major infill drilling campaign is planned with a rig secured to start operations in July 2013.
The results of the 4D seismic, shot in 2011, have been used to support the drilling campaigns in both fields.
Gabon
Net production in Gabon averaged 12,700 bopd for the year (2010: 12,850 bopd). Appraisal and infill drilling has been very successful throughout 2011 with over 120 wells being drilled and completed resulting in production being sustained and reserves replacement of 351%, an exceptional result in this mature area. This level of development and drilling activity is expected to be sustained in 2012.
In June 2011, Tullow completed a 20% farm-in to the Perenco-operated onshore exploration blocks DE-7 and Ogueyi. However, the Big Oba prospect in DE-7 and the Nkongono prospect in the Ogueyi block both proved unsuccessful and the Ogueyi block has since been relinquished. Acquisition of further 2D seismic data is planned to outline additional prospects in the DE-7 and Nziembou blocks; a multi-azimuth 3D survey is planned on the offshore Arouwe block in the first quarter of 2012. The seismic processing over Kiarsseny is now complete and interpretation is ongoing; the intention is to drill two exploration wells back-to-back, commencing in the fourth quarter of 2012.
Congo (Brazzaville)
Net production from the M’Boundi field was below expectations averaging 3,000 bopd in 2011 (2010: 4,000 bopd). Production volumes from the field fell in the second half of the year following issues with the water injection system which have now been resolved. Infill drilling and workover activity continued throughout the year with 19 wells drilled. Production volumes are expected to recover in the first quarter of 2012 as sustained water injection rates continue following the installation of a second high-volume pump in the field.
