I’m working on a story about the regulation and oversight of the offshore industry across the Gulf of Guinea and should be wrapping it up in a few weeks. That’s been keeping me from posting much lately.
Three weeks have now passed since the spill in the Ahanta West District. I am still unable to communicate any official, on-the-record information about what happened. A few days ago, the Ghana EPA said that the whale deaths in the Western Region could not be “attributed” to oil exploration, stating that there is no scientific proof for that claim. But the main thing to glean from the EPA statement is that no one knows what has caused the recent deaths. We can’t say they were provoked by the oil operations, but we can’t say they were the result of anything else, either.
There’s more news coming out about Jubilee’s production problems. When Ghana’s oil production began in December, the Jubilee partners estimated that production levels would rise to 120,000 b.p.d. within six months. But the “ramp up” has been delayed repeatedly and last month Anadarko, responding to stockholder concerns, went as far as saying that some well redesign was necessary. What had been a delay began to look like a real problem.
Today it appears that the additional drilling needed to get production back on track may cost up to US$ 1 billion and Kosmos Energy may have difficulty raising its share of the money. Back in July there was some talk in the trade magazines about problems with one of the blow out preventers (remember the role of the blocked blowout preventer in the Deepwater Horizon disaster). That’s mentioned again in today’s article: “The original Phase 1 ramp up was delayed due to problems with the blowout preventer and water-injection commissioning issues.” But now rather than being an isolated incident, this appears to be part of a larger technical problem: “The combination of completion failures, productivity issues, downhole remediation, and sidetracks being planned all point to a completion design issue.”
As an observer with no knowledge of drilling technology, I don’t know what to make of this news. But a few things are certain: production for the year is significantly lower than anticipated, which, of course translates into less oil revenue for Ghana. The new drilling fixes will further reduce Ghana’s oil income, as those costs have to be covered before Ghana begins collecting taxes on oil sales.
And, one final note: it looks like there are also some problems regarding discrepancy in the stated amounts of oil produced so far. You can read more about that here: Has Ghana been shortchanged in oil production?