Brighter prospects exist in Ghana’s oil industry – Kosmos

Kosmos Energy, one of Ghana’s Jubilee field operators, has said it will not cut down its investments in the country’s oil sector, in spite of the falling crude oil prices on the world market.

Mr Joe Mensah — Vice President (VP) and Country Manager of Kosmos Energy Ghana
Mr Joe Mensah — Vice President (VP) and Country Manager of Kosmos Energy Ghana

The company will rather ensure that all capital expenditure and investments are evaluated effectively to minimise the impact of the falling prices on their operations would be minimal.

Mr Joe Mensah — Vice President (VP) and Country Manager of Kosmos Energy Ghana
Mr Joe Mensah — Vice President (VP) and Country Manager of Kosmos Energy Ghana

The Vice President (VP) and Country Manager of Kosmos Energy Ghana, Mr Joe Mensah, said this in Accra during an interaction with the media.

He said on the back of the successes it chalked up through its hedging programme in 2015, Kosmos Energy would ensure that oil price volatility effects were minimal in 2016.

Kosmos hedged its oil prices at US$85.09 per barrel from 2015 through to 2017. The company’s hedging position as of September 30, 2015 was 11.6 million barrels through 2017.

“Stopping investments means probably we are going out of business, that is not something we would want to do. It just means we have to do what is right to maintain viability,” he said.

He added, “You have to be prudent and evaluate all your capital investments; it means that we will be judicious about what we do. As I said earlier, we are in an enviable financial position; we will continue to invest but you just have to tighten your belt and brace yourself, because we are all projecting that the low oil prices will be with us for a while.”

With the oil price expected to remain low for long, he said 2016 was poised to be another challenging year for the industry.

“However, with another year of greater than 100 per cent reserve replacement, our Ghana asset continues to demonstrate its world class quality. Our focus for 2016 is to maintain our financial strength through the continued strong operating performance from Ghana together with the disciplined allocation of capital.”

Kosmos and its partners are confident they will continue to deliver success. “Following our commitment to be a partner in energising Ghana, we will continue to look for opportunities which have the potential of supporting and impacting positively the country’s development efforts,” Mr Mensah stated.

Oil price effect minimal

The downward spiral of oil prices that plagued the global oil industry, of which Ghana is no exception, prompted other companies worldwide to cut back on their investments into the sector, globally.

According to Mr Mensah, the company’s active hedging programme was able to shield it from the oil price volatility, making it end 2015 on a sound footing in all their operations in Ghana.

Kosmos reported US$1.8 billion of liquidity and US$614 million of net debt at the close of the fourth quarter last year. This compares with US$1.9 billion of liquidity and US$17 million of net debt as of September 30, 2015.
For the full year ending December 31, 2015, total capital expenditure were approximately US$780 million, below previous figure of US$800 million.

Jubilee production and TEN devt

He said Kosmos exceeded its Jubilee Field production target of 100,000 barrels of oil per day (bopd) gross, averaging 102,500 bopd in 2015.

The Tweneboa–Enyera–Ntomme (TEN) project, he said, also continued to progress according to plan and within budget, with first oil remaining on target for the third quarter of 2016.

The Floating Production Storage Offloading (FPSO) J.E A. Mills set sail from Singapore on January 27, and is expected to be in Ghana by March this year.

On prospects for 2016, Mr Mensah said the company and its partners had submitted the Greater Jubilee Full-Field development Plan to the government in December last year and is currently awaiting approval.

The Greater Jubilee encompasses the existing Jubilee field as the Mahogany and Teak fields from the West Cape Three Points (WCTP) licence block operated by Kosmos.


Send your news stories to [email protected] and via WhatsApp on +233 244244807
Follow News Ghana on Google News


Please enter your comment!
Please enter your name here