Border bust-up won’t stop TEN

John Bradbury

May 1, 2015

John Bradbury profiles Tullow Oil’s major TEN development offshore Ghana, its second development in the area following its success at the deepwater Jubilee field.

TEN project location offshore Ghana. Images from Tullow Oil.

At the start of the year, Tullow Oil was optimistic about the progress of its TEN deepwater project offshore Ghana, saying then that it was “....progressing very well and is now over 50% complete and remains within budget and on-track to deliver first oil in mid-2016.”

However, by March, Tullow signaled that all was not that well. The company was embroiled in a maritime border dispute between Ghana and neighboring Cote d’Ivoire offshore West Africa. But, despite the dispute, Tullow says work on the TEN project will continue.

TEN comprises the Tweneboa, Enyenra and Ntomme fields in the Deepwater Tano contract area offshore Ghana. The project is operated by Tullow Oil, in partnership with Kosmos Energy, Anadarko, Sabre Oil and Gas, and Petro SA, and the Ghana National Petroleum Corp.

Tullow and its partners declared commerciality for the TEN discoveries in November 2012 and submitted a development plan to Ghana’s government for approval.

Consent for the project was granted by Ghana’s government in June 2013, based on plateau production via 24 wells in a water depth of 1500m (4920ft).

Cote d’Ivoire dispute

The Jubilee FPSO Kwame Nkrumah MV21 offshore Ghana.

Cote d’Ivoire has sought imposition of “provisional measures” via the International Tribunal of the Law of the Sea (ITLOS) in Hamburg, seeking to suspend ongoing exploration and exploitation in a disputed area where the TEN project is situated.

Tullow says a full verdict on the dispute, which originated in 2014, is not expected until 2017 – after the mid-2016 first oil date for TEN, targeted by Tullow.

Legal advisors have told Tullow that Ghana has a strong case under international law, and that the current boundary between the two countries, which follows an equidistant line, will be upheld by ITLOS. A decision on the application for provisional measures was expected to be handed down by the end of April (before OE goes to press).

“Although the arbitration process allows for an application of provisional measures, it is our view that it is in the best interest of all parties that the TEN project continues to move ahead without delay and unencumbered by legal tactics of this nature,” says Tullow’s chief executive Aiden Heavey.

The TEN subsea layout.
 

Drilling

During 2011 Tullow progressed appraisal drilling at the TEN fields, shortly after producing first oil from Jubilee in December 2010.

By January 2011, Tullow was drilling a Tweneboa 3 well, 6km (3.75mi) southeast of a Tweneboa 2 well and 12km (7.5mi) southeast from the original Tweneboa 1 discovery well; Tullow reported that Tweneboa 3 had confirmed the potential of the greater Tweneboa area.

Two deviated holes were drilled off the original Tweneboa 3 wellbore, targeting different areas. One leg was drilled to calibrate very weak seismic responses and hit thin reservoir sands and 9m (29.5ft) of gas condensate pay.

A second sidetrack, targeting an Ntomme anomaly, with a strong seismic signal, encountered 65m (213ft) of gross vertical reservoir with 34m (111ft) of net gas-condensate pay, allowing the project to progress.

At the time, Tullow’s exploration director Angus McCoss said the well was a bold step-out in a “vast stratigraphic trap,” adding: “Confirming producible gas-condensate in excellent quality reservoirs at this location is a great result that also demonstrates the strong predictive capabilities of our seismic data and prospecting techniques. As a result, we can now move forward confidently to assess the development options for the Tweneboa and Enyenra (Owo) fields in the Greater Tweneboa Area.”

Another Jubilee

TEN project field layout schematic.

TEN will sit just 30km (18.75mi) from Tullow Oil’s Jubilee, another project produced via FPSO, which came onstream in 2010, and became Ghana’s first deepwater development.

Tullow’s TEN project looks set to follow hard on the heels of Jubilee. Front-end engineering and design was completed by February 2013.

Most of the major project elements have been awarded: Japan’s MODEC won a contract to supply a leased FPSO for the TEN development in August 2013. The contract with MODEC covers engineering, procurement construction, mobilization and operations of the unit, and topsides processing equipment, hull and marine systems. Subsidiary Sofec will design and supply the unit’s external turret mooring system.

Tullow’s new TEN vessel will be a conversion of the very large crude carrier (VLCC) Centennial J, which is being equipped to provide plateau production of 80,000 b/d of oil, 70 MMcf/d of gas processing, and storage for 1.7 MMbbl of fluids. MODEC is due to deliver the unit early 2016, following its previous award for the Jubilee field FPSO, named after Ghana’s founder, Kwame Nkrumah MV21.

Sembcorp Marine’s Jurong Shipyard confirmed a contract from MODEC Offshore in Singapore last October (2014) to carry out a conversion and life extension to a VLCC for the TEN project – the 22nd conversion by Jurong on behalf of MODEC. In addition to the crude processing, Sembcorp says the TEN FPSO will also have handling for 65,000 b/d of produced water and will provide 132,000 b/d of filtered and de-aerated sea water.

In October 2013, Tullow awarded contracts for subsea construction and installation for TEN to a Technip-Subsea 7 consortium worth US$1.23 billion. Technip took $723 million of the value, for provision of nine flexible risers, three flexible flowlines, and 12 flexible pipeline spools, with a total length of 48km (30mi), as well as installation of 63km (39mi) of static and dynamic umbilicals, plus installation of ten rigid well jumpers and delivery of a further six prefabricated jumpers.

Subsea 7’s scope of work, worth $500 million, is for supply of flowline terminations, structural foundation piles, as well as installation of subsea manifolds, riser bases and flying leads. Much of Subsea 7’s equipment will be fabricated in Ghana, where a “substantial” level of fabrication will take place. Offshore installation for the project is due to commence this year using the deepwater pipelay and heavy lift vessel Seven Borealis, which is equipped for both rigid S-lay and J-lay installation, and which previously debuted on Total’s CLOV project offshore Angola.

FMC Technologies will supply a subsea system under a $340 million contract covering subsea trees, manifolds, tooling, subsea controls and systems integration.

Phase one of the TEN development with a capex of US$4.09 billion involves 17 wells, for Enyenra, Ntomme, water injection, and Tweneboa and non-associated gas in first phase. A second phase involves infill wells on Enyenra and Ntomme, costing a further $900 million, with first oil from this phase due mid-2018.

As government approval for TEN came through, allowing confirmation of pre-sanction contracts, Tullow underlined the project’s local significance, specifically around building Ghana’s oil sector capabilities: “The award of these contracts will enable Tullow and its partners to build on their commitment to help develop the oil and gas sector in Ghana by expanding local capability and participation in the supply chain, particularly through the in-country fabrication requirement of the TEN project,” Tullow said at the time.

TEN will be the second major oil development offshore Ghana after Tullow helped to build Ghanian industry infrastructure during the Jubilee development.

Tullow Oil operates the TEN project with 47.175% interest. Its partners in the field are Kosmos Energy (17%), Anadarko Petroleum (17%), Petro SA (3.82%), and the Ghana National Petroleum Corp. (15%).