Dotsey Koblah Aklorbortu of the Graphic Business (GB) caught up with Mr Joe Mensah (JM), the Vice President and Country Manager of the Kosmos Energy, Ghana, the international oil company that discovered the country’s first hydrocarbon deposits offshore Cape Three Points, to share his thoughts on the milestones and the future of the industry.
GB: We now have Jubilee and TEN oilfields up and running, but how has the journey been?
JM: We have made significant strides in the oil industry in the country, as it has been said, after Kosmos Energy spearheaded the discovery in 2007, and operating all these periods, with entire, industry operating in excess of 7,000 people currently.
The beauty about TEN is the fact that even though coming out as a complex project, it was executed on time and within budget. To us, it is significant because not even in advanced countries can you find projects such as TEN working so well, and this is a great success story for the partnership.
GB: What worked for the partnership in such a cohesive approach to the projects?
JM: In our deliberations towards what will create the best way forward for the partnership, I can tell you it has functioned very well, a collaborative spirit where we discuss issues and get to points where we all rally behind the outcome.
That team spirit and common ideas work to our best interest as unincorporated members of the unitised operations for the partnership and for the country as a whole.
GB: What is the way forward for Kosmos in Ghana; are you in for the long haul? After successful Jubilee and TEN, what’s next?
JM: I will preface it by saying that Kosmos is here for the long haul. We are Exploration and Production (E&P) company with our core competences rooted in explorations and as we speak today we have two of our best explorers in country.
The presence of these two explorers in Ghana was to look at data and is in the data room for couple of days looking at data available to connect the dots. This is because Kosmos is very interested in coming back to do exploration in Ghana and core competence speaks volumes about our interest Ghana.
GB: At the face unattractive oil prices, what is the motivation?
JM: That is true, the fact on ground is that nobody is doing exploration today, everybody has drawn the lines and because of the situation with the depressed oil prices. We are the only one in the data room, which is the demonstration of our quest to stay.
As I said, since the first discovery in 2007 with the couple of 100 people in industry, now the industry has in excess of 7,000 people. For Kosmos, we think for the industry to grow, strategically one has to have things in the pipeline.
We have jubilee and TEN today at their plateau production level. The question is what next? There is nothing, therefore something has to be in the pipeline. That is why it is so critical to do exploration and have reserves in the pipeline. With that we can have industry that keeps growing for the country, Kosmos and the partnership.
GB: Local content and its dynamics are critical to Kosmos, and the partnership what is the way forward?
JM: For local content, I can say it is going on well. We recently had an integrity workshop, where we were referred to as local content police, to us a Kosmos, we kept pushing the partnership to see what we have been doing and how effective it’s has been.
As the industry grows, I want to see more and more of my people playing the expert roles, more dominant roles in the industry, and as the industry grows, we need the numbers of our own people running things and I think that is the direction we are all heading.
With the strong presence of indigenous Ghanaians in the industry as part of the strong local content drive I am optimistic that we will get there and the partnership drives that.
GB: Challenges, aside technical issues with Jubilee and others, crawl in from time to time. Were these anticipated and how has it made the partnership that resilient?
JM: The partnership has some challenge with Jubilee, the country’s first independent developed field, with an FPSO that is first to be moored offshore for commercial large scale and one of the biggest we can find in the region.
As such, the challenges came to us as critical lessons, but the lead operator Tullow Ghana was swift in composing the partnership so we could draw from the challenges some useful lessons going forward.
With that, the lessons were used to improve TEN. That aside there was so much technology and enhancement that was part of the reasons why we delivered on budget and on time.
There was a good collaboration between the teams of jubilee and TEN, which also contributed to the great success that we are witnessing on the new FPSO.
The unitised operations to the partnership brought the benefits of developing petroleum resources through cooperative rather than competitive mechanisms which has assumed great importance globally.
Through unitisation, a lot of expertise was placed in a pool culminating into a teamwork, hence the success and timely delivery of projects.
GB: The gas factor, how far with your discussions with government, after Kosmos’ initial pledged its support for the harnessing of the gas component?
JM: The dip in oil prices gives Ghana the chance to look at diversification, and harnessing gas to its advantage.
The partnership has been in discussions in that direction and Kosmos is one the companies in the forefront pushing the gas agenda. As a good corporate citizen, we feel strongly that gas could be used to transform this country, just like in the case of Trinidad and Tobago.
If there is a success story of gas in Trinidad, how can we use the gas from our country to keep the lights on? Though it took a while before everybody signing to that, we need to continue to push that agenda.
The fact is, we can sell the oil to generate revenue for the country, but the gas factor keeps the lights on, to ensure that the wheels of industry and commerce are constantly in motion.
With the preparation to bring on board the gas from the fields with maximum outputs, Ghana National Gas Company and tie-in agreements would see to the flow of gas from both jubilee and TEN to keep the lights on.
Therefore, at Kosmos our discussions with government are still alive as the state and partnership are working together in that direction.
GB: The gas is not free, the partners explore for oil and got gas in addition and there is the need monetise it; what is the partnership’s position on the monetisation of the gas?
JM: It has been a very delicate issue when it comes to the aspect of the associated and the non-associated gas. In the case of Jubilee, about 200 billion standard cubic feet was for free, and had become more or less a precedent.
Some were of the view that any gas that comes in should be free. Therefore, coming to the gas agreement will definitely pan out as something delicate. But it has always been a dialogue and we are working to ensure the best for both sides.
GB: What is the status of the marriage between Ghana and Kosmos Energy and Ghana and the future of your relationship?
JM: The truth is Ghana has been a fantastic location, and could serve as the base for the reaching out to our operations in other parts of Africa. Naturally, Ghana can play a regional role.
As rightly put by the President John Dramani Mahama at the inaugurating ceremony, the focus was to make the country the oil and gas hub in West Africa. We can achieve that; the possibilities are there.