An issue with the turret bearing of the FPSO Kwame Nkrumah that is operating on the Tullow Oil-operated Jubilee oil field development offshore Ghana “has resulted in the need to implement new operating and offtake procedures.”

The turret issue was discovered in February and impacted production rates significantly. Prior to the turret issue, output at Jubilee—which came onstream in December 2010—was averaging 102,600 bbl/d of oil. This dipped to an average of 62,900 bbl/d in first-half 2016 due to the turret issue, with output expected to be about 85,000 bbl/d during second-half 2016. This would give an average production rate of 74,000 bbl/d for 2016.

However, once the work is completed, the partners are confident of returning Jubilee to the peaks before the turret issue caused output to plummet.

“Tullow and its partners have established that the preferred long-term solution is to convert the FPSO [unit] to a permanently spread moored facility, with offtake through a new deepwater offloading buoy,” Tullow explained.

“If we spread moor the vessel, the bearing within the turret, which was causing the problem, becomes obsolete,” Tullow told SEN.

Phase 1 of this work will see the installation of a stern anchoring system to replace the three heading control tugs currently in the field. This is due to be completed around year-end 2016 and will require short periods of reduced production.

Phase 2, which is awaiting approval from the government of Ghana, will rotate the FPSO unit to its optimal spread moor heading and is expected to be completed in first-half 2017.

The cost for these two phases is expected to be up to $150 million gross, and it is estimated that the FPSO Kwame Nkrumah will need to be shut down for eight to 12 weeks during first-half 2017 to complete Phase 2.

Japan’s Modec operates FPSO Kwame Nkrumah, and its unit Sofec supplied the turret for Jubilee.

“Upon completion of the spread mooring, the partners will review opportunities to improve the efficiency of offtake procedures by mid-2017. This should allow production to return to levels seen before the turret issue occurred,” Tullow added.

A deepwater offloading buoy is scheduled to be installed in first-half 2018. This will remove the need for the dynamically positioned shuttle and storage tankers and the associated operating costs.

“Market enquiries are ongoing to estimate the cost to fabricate and install the buoy, which is expected to require a shutdown of four to six weeks to install,” Tullow noted.

The additional gross operating expenditure of the revised procedures is currently expected to be about $115 million for 2016, $105 million for 2017 and $35 million for 2018.

“The partners will review potential opportunities to improve the efficiency of offtake procedures, which may include the use of a larger DP [dynamic positioning] shuttle tanker,” partner Kosmos Energy said.

In December 2015, Tullow submitted the Greater Jubilee Full Field Development Plan to the government of Ghana.

“This project, to extend field production and increase commercial reserves, was redesigned given the current oil price environment, to reduce the overall capital requirement and allow flexibility on the timing of capital investment. In light of current circumstances, approval of the plan by the government of Ghana is now expected in mid-2017,” Tullow added.

The Jubilee Field has a water depth of up to 1,737 m (5,700 ft) and is located about 129 km (80 miles) southwest of the port city of Takoradi.

Jubilee is a series of subsea wells tied back to the 360-m (1,181-ft) long FPSO Kwame Nkrumah vessel that has the capacity to produce 120,000 bbl/d of oil.

Jubilee was discovered in 2007 by the Mahogany-1 (M-1) and Hyedua-1 (H-1) exploration wells. The two wells were drilled some 5 km (3 miles) apart and intersected large continuous accumulations of light sweet crude oil. The M-1 and H-1 wells discovered large net pays of 95 m (312 ft) and 41 m (135 ft), respectively, in high-quality stacked reservoir sands. The Jubilee Field straddles the West Cape Three Points and Deepwater Tano licenses.

Kosmos added that the partners expect that the financial impact of lower Jubilee production, as well as the additional capex and operating costs associated with the damage to the turret bearing, “will be mitigated through a combination of the comprehensive Hull and Machinery insurance, procured on behalf of the partnership, and the Loss of Production Income (LOPI) insurance.”

“Claims under both policies have been notified to our insurers. As and when the claims have been accepted, the recovery of some past losses is expected before the end of 2016 and further costs are expected to be recovered as they are incurred,” added Tullow.

The partners in the Jubilee development are operator Tullow Oil (35.48%), Anadarko Petroleum (24.08%), Kosmos Energy (24.08%), Ghana National Petroleum Corp. (13.64%) and Petro SA (2.73%).

—Steve Hamlen