UPDATE 2-Ghana says on track for first oil in December

* First output in December – vice president

* Jubilee field reserves seen at 1.6 billion barrels

* Kosmos secures new funding to develop Jubilee assets

(Recasts, adding Kosmos statement)

By Kwasi Kpodo

ACCRA, Aug 24 (BestGrowthStock) – Ghana is on track to pump its
first barrel of crude oil in December from total reserves put at
1.6 billion barrels, Vice President John Dramani Mahama said on
Tuesday.

The comments reaffirmed its push to join the league of oil
producers this year and the reserve estimate breaks from
previous, more cautious forecasts to concur with a top-end
figure given by operator Tullow Oil Plc (TLW.L: ).

“In December this year, Ghana will join the league of
petroleum-producing nations as commercial production begins in
the Jubilee field,” Mahama told a conference in Accra.

“Conservative appraisal of the wells and available
statistics based on credible scientific findings indicate that
the country holds potentially about 1.6 billion barrels of crude
oil,” he added, updating previous official forecasts of merely
800 million barrels — widely considered as overly conservative.

Field operator Tullow puts the upside potential of the core
Jubilee Unit Area at one billion barrels of crude, with the
southeast section under appraisal at a further 500 million.

Mahama said Ghana could expect oil revenues on average to
contribute seven percentage points to annual gross domestic
product but warned it would not in itself transform the fortunes
of the country, a third of whose people live in poverty.

“Ghana cannot see the oil industry as a miracle wand to
solve all problems,” he said.

“Rather, the country can prudently use this resource to
achieve significant economic turn around,” he said, noting plans
to base a nascent petrochemicals sector on gas from the field.

Mahama stressed the importance of ensuring local employment
in the oil business, which has typically been more capital- than
labour-intensive, and said oil revenue management legislation
aimed at ensuring transparency was before parliament.

The field is due to take four to six months to reach planned
output of 120,000 barrels per day — a level it will maintain
for three years, Ghana’s energy minister told Reuters in an
interview last month. [ID:nLDE6671FV]

KOSMOS’ STAKE

Oil firm Kosmos Energy said it had $350 million of extra
credit to develop its assets in Ghana’s Jubilee field and was
committed to staying in Ghana, a week after it said it cancelled
an accord to sell its stake to ExxonMobil (XOM.N: ).

“The funds will support Kosmos’ share of Jubilee Field phase
one development, appraisal of additional discoveries, and
ongoing exploration activities on the West Cape Three Points
Block and adjacent Deepwater Tano Block offshore Ghana,” it said
in a statement issued in Dallas.

Ghana’s state petroleum company GNPC — a fierce opponent of
the sale of the Kosmos stake to ExxonMobil for what sources
close to the deal put at $4 billion — last week reiterated its
interest in the Kosmos assets.

But the Kosmos statement noted the new funding was part of
its plan to build on the value of its assets and repeated that
“the company will remain in Ghana”.

Kosmos is backed by private equity firms Warburg Pincus
[WP.UL] and Blackstone Group LP (BX.N: ). It is the operator of
the West Cape Three Points Block in which it holds a 30.875
percent interest and holds an 18 percent interest in the
Deepwater Tano block.

(Reporting by Kwasi Kpodo; editing by Mark John)

UPDATE 2-Ghana says on track for first oil in December