Exploration History – Petroleum Register

Development of Ghana’s Petroleum Industry

Hydrocarbon exploration in Ghana’s Sedimentary Basins dates back to 1896 when early explorers drilled wells in the onshore part of the Tano Basin to target locations with oil and gas seepages. The first documented discovery well, WAOFCO-2 was drilled in 1896 by the West African Fuel Company to a total depth of approximately 35 metres. This well produced about five barrels of oil per day for a short period. About twenty-one (21) additional shallow onshore wells were drilled around this period by various companies. These early wells were mainly wildcats drilled without the benefit of detailed geological understanding or subsurface data.

There was a shift in exploration to the offshore basins around 1967 leading to a number of discoveries including the Saltpond Field discovery made in 1970 by the Seago10-1 well.

Following the passage of the Petroleum Exploration and Production Act, 1983 and establishment of the Ghana National Petroleum Corporation, exploration became better planned and sustained leading to greater interest and participation of international companies. Their efforts led to numerous discoveries offshore. In 2007, the Mahogany-1 well was drilled by Kosmos Energy in the West Cape Three Points Contract Area to target Deepwater turbidite sandstone reservoirs. Mohogany-1 discovered the Jubilee Oil Field. This became Ghana’s first commercial Deepwater discovery and opened the way for Deepwater exploration. Following the Jubilee Field discovery, twenty-five additional offshore discoveries have been made of which two fields (Tweneboa-Enyenra-Ntomme Field and Sankofa – Gye Nyame Field) both comprising a cluster of discoveries are in production.

Currently, there are 16 Operators with Petroleum Agreements over 18 Contract Areas. These Operators are in varying stages of their respective agreements ranging from Exploration to Production.

Exploration Phases

PHASE 1

PHASE 2

PHASE 3

PHASE 4

PHASE 5

PHASE 5 (1981 – 2001)

Oil and gas exploration continued both onshore and offshore during this phase.

In 1979, Phillips Petroleum appraised the South Tano discovery and made gas and condensate find on the satellite 1S-3AX structure down dip of the main field.

They went ahead to further appraise the South Tano find by drilling IS-4X in 1981. They declared the South Tano discovery sub-commercial.

About the same time, Phillips Petroleum again appraised the North Tano find discovered earlier by Volta Petroleum.

They drilled the 1N-1X well in 1980 and 1N-2X well in 1981. These wells encountered both oil and gas. However, they declared this field too as non-commercial and relinquished the block.

The government at that time then decided to establish an institutional capacity, as well as the statutory and legal framework that would accelerate the country’s Exploration and Production (E & P) efforts. Subsequently, the current petroleum exploration & production, the petroleum income tax and the GNPC laws (PNDC Laws 84, 188 and 64) were enacted.

PNDCL 64 (1983) established the Ghana National Petroleum Corporation (GNPC) as a statutory body from the then Petroleum Department under the Ministry of Mines and Energy. This was to provide the requisite institutional framework to handle the country’s E & P activities. GNPC started operations in 1985.

PNDCL 84 (1984) established the legal and fiscal framework for the conduct of petroleum Exploration and Production activities in Ghana. GNPC was to become a virtual one-stop shop for investors in the upstream petroleum industry in Ghana.

Similarly, the Petroleum Income Tax Law, PNDCL 188 provided for a separate tax regime for petroleum exploration and production in Ghana.

As the sole statutory body to spearhead the search for commercial oil and gas to meet the country’s needs and let her be a net exporter of hydrocarbons, GNPC pioneered E & P activities. It sought for funds through various means to finance its activities.

One achievement of the fund raising efforts was that, in the Mid 80’s, the Canadian government, acting through Petro Canada International Assistance Corporation (PCIAC), expended considerable funds to support GNPC. In addition to helping to establish, equip and train personnel for GNPC’s research Laboratory, they also acquired extensive 2D seismic data in the offshore Tano/Cape Three Points basin in 1984 (PCIAC – 84 -97, 98 &99 vintages). These datasets are still some of the best in the basin. PCIAC also drilled 13 wells in the Tano basin – two (2) South Tano appraisal wells (ST-5 and ST-6), and eleven (11) shallow depth onshore wells (Ghancan wells).

In 1989, GNPC funded the acquisition, processing and interpretation of the first 3D seismic data over the South Tano Field with the firm conviction that the field is viable for national development. Following interpretation of the 3D seismic data and the studies undertaken to determine the viability of the Integrated Tano Fields Development Project (ITFDP) to use the gas for power generation, GNPC drilled three wells over the South Tano field – one (1) exploratory well ST–8 (1991), and two (2) appraisal wells ST-7H (1992) and ST-9H (1994). Both appraisal wells were horizontal wells. GNPC had by this time (1994) acquired one drillship and at least three other rigs in addition to other infrastructure to help facilitate the development of the Tano fields.

As part of the ITFDP, GNPC ordered a power barge to utilise the anticipated gas from the Tano fields. The infrastructure for the power barge and power transmission lines to link to the national grid was installed at Effasu-Mangyea in the Jomoro district in the Western region with funds that GNPC had secured.

GNPC also funded other seismic operations from 1989 to 1991. These included:

The shallow marine 2D seismic surveys in the Tano, Saltpond and Accra/Keta basins
The 2D land seismic survey in onshore Tano and Accra/Keta basins
The 2D seismic data over the Saltpond field
The 2D seismic (GNCT-88 vintage) in the Tano/Cape Three Points area

The Saltpond Field, which started production in 1978, was shut-in during the mid eighties by Primary Fuels Incorporated (PFI). PFI had acquired AgriPetco’s interest in the Saltpond Field. The latter had pulled out due to low, uneconomic production rates. Finally, PFI pulled out after drilling three wells; one gas well and two dry wells that did not meet their expectations.

Other companies operated in Ghana at various times during this period and made some finds:

In 1989, a consortium led by Atlantic Richfield Company Limited (ARCO) found gas with their Central Tano – 1 (CTS-1) well. Then they found heavy oil in the same year with their North West Tano – 1 (NWT-1) well. The CTS-1 find was declared sub-commercial while the exact accumulation of the NWT-1 was not determined because it was not mapped either before or after the well. However, recent mapping by GNPC personnel suggested that it could be worth looking at again.

In 1999, Hunt Oil Company found oil with their WCTP-2X well in deepwater. Hunt Oil declared the find non-commercial and subsequently pulled out in 2002.

Dana Petroleum Plc also found heavy oil with their WT-1X well drilled in 1999.

Other companies such as Nuevo Energy Resources, AGIP, Diamond Shamrock, Devon Energy and Fusion Oil (West Oil) all undertook exploration activities in Ghana’s coastal and offshore sedimentary basins during this period. These activities provided the National Oil Company (GNPC) with a lot of geological/geophysical data. The staff of GNPC also gained much experience in dealing with the operations of international Oil Companies.

Presented below is the list of wells drilled in this phase.

PHASE 6

PHASE 6 (2002 – 2007)

During this period, exploration for commercial hydrocarbons was intensified. Soon after taking the reins of power, the new government decided to focus on GNPC to keep to its core function, which is, facilitating the search for commercial hydrocarbons for Ghana.

A deliberate and concerted training of the staff of GNPC to meet the challenges of dealing with the international E & P companies was progressively undertaken by GNPC management. These training programmes involved staff secondment or attachment to the E & P companies in the areas of seismic data interpretation, field evaluation and development as well as to some service companies in seismic data acquisition and processing. Academic training to upgrade staff as required was also pursued. This resulted in a competent core staff which has become a solid human resource base for the corporation.

Subsequently, GNPC was restructured downsized given the directive to focus on its core function of facilitating the activities of the E & P companies in Ghana to find commercial hydrocarbons for Ghana. The refocused GNPC was retooled with new state of the art workstations for the Operations Division and other computer paraphernalia for some other staff in order to facilitate work.

The new dispensation required that GNPC become more investor friendly in issues such as data licensing in order to facilitate exploratory work. In addition, there was an intensification of a campaign to attract investors at international oil and gas fora, such as the American Association of Petroleum Geologists (AAPG) annual conventions, Society of Exploration Geophysicists (SEG) conferences, African Petroleum Forum (APF), UPSTREAM conferences etc.

Some reputable Independent Oil Companies like Kosmos Energy, Hess Corporation, Tullow Oil, Norsk Hydro Oil and Gas etc. began to take note of the potential hydrocarbon prospectivity of Ghana. They therefore directed their attention to Ghana as an investment destination.

The GNPC and The Ministry of Energy also initiated a review of the fiscal and regulatory regimes of the petroleum agreement to improve areas that had been a source of disincentive to potential investors who felt that Ghana’s royalty and tax regime, among others needed a downward revision.

Dana Petroleum plc again found oil with their second well WT-2X, in 2002.

Though other wells did not find commercial hydrocarbons, their results were very encouraging and provided solid technical basis for defining the future direction of petroleum exploration in the country.

The E & P companies, together with GNPC, also conducted a number of geological/geophysical studies to support the current models and concepts in use offshore Ghana.

Analyses of acreage positions of the companies and their respective approved work programmes for these acreages revealed that there was a gradual and systematic shift of focus from the shallow water areas to the deepwater areas of the offshore basins. Devon, for instance, relinquished portions of their shallow water acreages and sought amendments to their Petroleum Agreements to enable them concentrate on deepwater exploration.

The increased spate of activity in the deepwater areas was occasioned by other deepwater discoveries made in the Tano/Cape Three Points basin and more importantly, by the results of the four deepwater wells drilled in Ghana between 1999 and 2003 (see table 5). These wells proved the existence of an active petroleum system in the deepwater, for example, the Hunt Oil’s WCTP-2X well encountered 14ft of light oil column. This effectively reduced the risk of petroleum generation in the deepwater area of Ghana.

It is worth noting that though this gradual shift of focus to the deepwater began only less than a decade ago, enough evidence had been gathered to suggest that this area would play a vital role in oil and gas exploration in the country.

It therefore came as no surprise when in June 2007, block operator Kosmos Energy, technical operator Anadarko, Tullow Oil and E. O. Group together with GNPC struck a significant (about 312ft/96m net) column of a light sweet crude oil in the Mahogany prospect with the Mahogany-1 well in the West Cape Three Points Contract Area/block. This was the most significant discovery crowning years of concerted effort by all concerned. Following this, in August 2007, Tullow, the block operator and its partners also struck a similar type of oil in their deep Tano block with the Hyedua-1 well.

These two wells were found to have dynamic communication and therefore were seen to be draining the same structure. The Jubilee Field is therefore a carved out portion of this structure.

Below is the list of wells drilled up to end of 2007.

Development of Ghana’s Petroleum Industry

Exploration Phases

PHASE 1 (1896 – 1957)

PHASE 2 (1958 – 1966)

PHASE 3 (1967 - 1972)

PHASE 4 (1973 - 1980)

PHASE 5 (1981 – 2001)

PHASE 6 (2002 – 2007)

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