|Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature.|
This summary covers an investment by Jubilee Ghana MV 21 B.V. of the Netherlands in FPSO Kwame Nkrumah MV 21. The investor has applied for MIGA guarantees covering their equity and shareholder loans totaling $260 million for a period of up to 15 years against the risks of expropriation and war and civil disturbance. The investor has also applied for financing from the International Finance Corporation (IFC), a member of the World Bank Group.
Jubilee Ghana MV21 B.V. is a special purpose company incorporated in the Netherlands. They will own a Floating Production Storage and Offloading (FPSO) facility, the FPSO Kwame Nkrumah MV 21, for the Phase One development of the Jubilee Field, located 60 kilometers offshore from Ghana. The FPSO will be operated by MODEC Management Services Pte Ltd., a wholly owned subsidiary of MODEC Inc. of Japan. In July 2008, Tullow Ghana, Ltd. (Tullow Ghana), the operator of the Jubilee Field, awarded MODEC a contract to provide and operate the FPSO. After completion of construction, the FPSO will have a contractual production and processing capacity of 120,000 barrels of oil per day and 160 million cubic feet of gas per day and a storage capacity of 1.6 million barrels of oil. The first oil delivery is expected during the fourth quarter 2010.
The project is a Category B, click here to view the Environmental and Social Review Summary prepared by the IFC.
The FPSO is one of the essential, central elements of the Phase One development of the Jubilee Field. The construction, installation, and operation of the FPSO will be critical to achieve successful and timely implementation of the Jubilee project in accordance with the Jubilee Field’s Plan of Development, which was approved by the government of Ghana in July 2009. As such, the project will support the development of Ghana’s nascent oil and gas sector and help to secure the significant economic and developmental benefits. These benefits come primarily in the form of notable government revenues from the Jubilee field, including royalties and taxes of approximately $900 million per year at peak production (based on Phase One production profile from proved reserves and other assumptions such as the prevailing oil price), providing the government with the fiscal space to finance other much needed development programs.
In addition, development of the Jubilee Field also provides development opportunities along the energy sector value chain, such as the construction of an onshore gas-processing facility that will process the associated gas produced by the FPSO, development of gas distribution infrastructure, development of gas-to-power projects, etc. Once onshore gas infrastructure is in place, the FPSO will become an integral part of the gas supply chain as envisaged by the government. In addition, direct development impacts of the project also include local employment and training of Ghanaian nationals for the oil and gas industry. According to the sponsor’s plan, over 80 percent of their staff will be Ghanaian nationals in five years.
The project also supports MIGA’s strategy of promoting investment in complex projects and in countries eligible for assistance from the International Development Association.