The Chief Executive Officer of Tullow Oil plc, Aidan Heavey, says the company is working hard to start production of oil and gas from its Tweneboa Enyerra and Ntomme (TEN) fields by mid-2016.

The Jubilee oilfield produces about 100,000 barrels of oil per day. The field, also crucially, produces about 100million standard cubic feet of gas per day (mscf/day) to augment the contractual gas volume of 120mscf supplied by NGas in Nigeria via the West African Gas Pipeline.

This, however, is not enough to cater for the total gas demand of about 350mscf/day needed to generate enough thermal energy to meet the daily 2,100megawatts of electricity demanded at peak.

Given the electricity supply challenges the country faces, and the gas challenges with Nigeria, the importance of adequate and regular gas supplies from offshore Ghana cannot be over-emphasised.

Mr. Heavey, who recently visited the country on a working visit, told the B&FT the company is currently working closely with government to produce gas as part of oil production and export it to the gas processing facility at Atuabo, from where it goes to Aboadze.

“The FPSO for TEN is a lot more complicated than that of Jubilee because it has a gas part, and we can expand more efficiently into the gas business. The gas being supplied now is associated gas from the Jubilee oilfield and there will be associated gas from the first phase of TEN as well. However, the real gas upside will come onstream later on,” Mr. Heavey said.

The impact of gas processing, he said, is yet to be felt and: “It's when the gas industry starts to build up and you get cheap gas through the system, and that then generates down to the homes and to businesses, and they have cheap power and become more competitive, that the impact will be felt.

“Our attention is focused on TEN (Tweneboa, Enyenra and Ntomme) and Jubilee. TEN is currently one of the biggest projects in the world, and our focus of attention is to make sure it’s on time and on budget,” he added.

“We took on debt to develop the fields and we work with about 17 banks. These are also banks that supply funding to the country. Our bonds have the same bond holders as Ghana, so if the country is downgraded as an investment, so are we.

“Our interests and that of the country is the same. That's why Tullow promotes Ghana as an investment destination. By having a long-term commitment, what is important to us is to see that we support Ghanaian participation around the oil industry."

He indicated that at the top of his priorities has been the need to have the office here in Ghana run by Ghanaians, to have a big local content policy and to build local capacity.

Heavey says the company will, by end of this year, sanction the third of its oil exploratory works in addition to its operations in Jubilee and the Tweneboa Enyerra and Ntomme (TEN) fields.

“The next big project we hope to sanction later this year is the Jubilee Full Field Development. That’s a third project that's in smaller sections and so will have more local content. What we anticipate is that you get foreign companies come in and work with local companies, and bit by bit the local companies take over the expertise and then take over the work. That's how capacity grows,” Mr. Heavey said.

His announcement comes at a time oil prices have taken a downward trend on the world market, fuelling fears that Tullow Oil will cut its investment in the country.

But Mr. Heavey said, instead, Tullow Oil is restrategising and will not take a hasty decision on its investments in the country.

Globally, the recent slump in crude oil prices to under US$60 over the past five months has triggered a slowdown, and in some cases a complete halt in petroleum sector investments.

Mr. Heavey explained: “The oil industry does not work at US$50 a barrel. The major OPEC producers, the Gulf ones, cannot continue at US$50 a barrel. If you look at the oil industry itself, there is US$760billion of projects currently on hold because they are uneconomic at US$50. The industry itself lost US$1.5trillion of income in the last 12 months.

“There's been no real exploration worldwide for three years, so you are talking about an industry that has a massive lack of investment. The oil price cannot stay at these levels because supply and demand will kick in. The supply is falling of dramatically so if you go forward, say on a pessimistic basis for 12 months, you have to say that the supply will not meet world demand; so I'd be very bullish on oil prices.”

Asked to comment on the widely-held views by a number of industry analysts that the fall in oil prices is partly due to the emergence of oil shale in the US, Mr. Heavey said: “The shale industry is a very different industry. There are different fields that work at different levels -- some work at US$30, some at US$50 and others at US$100.

“Basically all the infrastructure is in place, so if oil prices are US$50 they produce a certain amount; if US$100 they produce more, so it will always be there as an industry -- but it will never be what it was a year ago when it was increasing every single year. It has stabilised and come up a bit, but it's a red-herring in relation to the international oil industry.

“The international oil industry is really short of oil, and I think what's good for Ghana is that its new major developments are all coming on-stream right now when oil prices are low, but you would fully expect that by the time TEN comes into production, the oil prices will have recovered.”

Oil production in Ghana started in 2010 with what came to be known as the Jubilee Field. Tullow is the lead operator in a partnership with the GNPC and other investors that include Kosmos Energy, Anadarko and Petro SA.