Ghana Won’t Block Tullow Gas Flaring to Boost Oil Production

Ghana won’t prevent Tullow Oil Plc from burning natural gas at the offshore Jubilee oil field to boost production of oil, Energy Minister Emmanuel Armah-Kofi Buah said.

The flaring would last until October when a gas processing plant onshore will be ready, he said by phone. London-based Tullow had been reinjecting the gas into the deposit because the facility wasn’t ready to receive shipments. Ghana’s Environmental Protection Agency must approve the proposal.

“Government had to state a ‘no objection’ so that the EPA can regulate and allow for gas to be flared from now till October when the gas infrastructure will be ready,” Buah said. “The flaring will allow for production to increase because the re-injection has reduced volumes we could get from Jubilee.”

The delay in opening the gas facility will probably cost Tullow (TLW) $100 million in sales this year as it limits the amount of oil it produces at Jubilee to about two-thirds of capacity. Production stalled at about 100,000 barrels a day is reducing the revenue Ghana needs to narrow its current-account and budget deficits.

Tullow owns 35.5 percent of Jubilee, which began production in 2010. U.S.-based Anadarko Petroleum Corp. and Bermuda-based Kosmos Energy Ltd. each hold 24.1 percent. Ghana National Petroleum Corp. holds 13.6 percent and Sabre Oil & Gas Holdings Ltd. owns 2.7 percent.

Tullow shares rose 0.5 percent to 846.5 pence in London at 1:11 p.m.

To contact the reporter on this story: Ekow Dontoh in Accra at edontoh@bloomberg.net

To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net Andres R. Martinez, Karl Maier

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