MODEC to design sub-sea facility for Tullow Ghana

August 19, 2008

Tullow Ghana Limited has contracted MODEC International to design and instal a sub-sea facility which will be connected to a floating production, storage and offloading (FPSO) vessel to pump oil out for production..
Tullow entered into the multi-million dollar agreement on behalf of Kosmos Energy Ghana Limited and its partners namely Anadarko Petroleum Corporation, EO Group, Sabre Oil and Gas, and the Ghana National Petroleum Corporation (GNPC).
MODEC, which specialises in the engineering, procurement, construction and installation of floating production systems was among four companies, namely, SBM, SAIPEM and BW Offshore, which expressed interest in building the FPSO.
Under the agreement, MODEC was also expected to operate the first FPSO to be installed on the Jubilee Field which contained large quantities of oil.
The contract was a seven year lease with "13 one-year options" meaning the contract could be extended thirteen times in one year.
According to a report on the contract made available to the Daily Graphic, it was estimated that the Jubilee Field oil reservoirs which were discovered in 2007 were highly productive and thus validated Kosmos Energy's fast-track appraisal and field development programme.
It said the FPSO, which was part of the Phase 1 development plan of the oil reservoirs would be installed in approximately 1,100 meters water depth on the Jubilee Field, which was one of the largest oil fields discovered offshore West Africa in the past 10 years.
The FPSO would be capable of processing more than 120,000 barrels of oil per day, and would inject more than 230,000 barrels of water per day and 160 Million Standard Cubic Feet per Day (MMscfd) of produced gas.
The pressure from the pumped water would force the oil out for production.
First oil was scheduled in 2010 and the FPSO would be designed to remain on the field for up to 20 years.
The report quoted Mr Kenji Yamada, President & CEO of MODEC, Inc., as saying "MODEC is very proud to have been selected by the Jubilee Unit partners and GNPC to provide and operate the Jubilee FPSO, a world class facility on a world class field.
We are equally pleased to be a part of the team that will provide a needed energy resource to benefit the people of Ghana," he continued.
It also quoted Mr Rick Hall, President of MODEC International, Inc., as stating that, "The Jubilee contract represents a significant milestone for MODEC in assisting Tullow and its partners to develop a world class oil field while also strengthening MODEC's infrastructure in West Africa."
The contract was awarded after test runs were conducted on the oil reservoirs in June 2008.
Kosmos Energy, which announced the oil find in June 2007, and its partners will need to invest about $5 billion to fully develop the fields to pave the way for the production of oil.
According to Kosmos Energy, with the backing of international private equity investors, Warburg Pincus and Blackstone Capital Partners, the company possessed a significant financial and operational capability to generate and participate in multiple high-impact upstream projects.
Due to the cost involved in drilling and the time frame needed for the acquisition of equipment, Kosmos and its partners will develop the discovered fields in phases.