Ghana signs major energy deal to extend oil production licences to 2040

The Government of Ghana has entered into a historic agreement with major oil and gas companies to extend production licenses for the Jubilee and TEN oil fields until the year 2040. This development, formalized through a new Memorandum of Understanding (MoU), represents a major turning point in Ghana’s energy sector, ensuring long-term investment and continued production of oil and gas to support the country’s economic growth and energy security.

The MoU was signed between the Government of Ghana and key partners including Tullow Oil plc, Kosmos Energy, PetroSA, the Ghana National Petroleum Corporation (GNPC), and GNPC’s subsidiary, Explorco. The agreement specifically applies to the West Cape Three Points (WCTP) and Deep Water Tano (DWT) blocks—areas that encompass the Jubilee and TEN fields, which are central to Ghana’s oil production activities.

A significant feature of this agreement is the approval for up to 20 new wells to be drilled in the Jubilee field. This initiative is expected to generate around $2 billion in investment over the duration of the extended licenses. Beyond the financial input, this expansion is anticipated to result in a significant increase in gross 2P reserves (proven and probable), which will play a crucial role in bolstering Ghana’s long-term energy security and overall economic resilience.

Additionally, the MoU includes several important commitments aimed at strengthening the country’s gas sector. Among these are plans to increase gas supply from the Jubilee and TEN fields to approximately 130 million standard cubic feet per day (mmscf/d). There will also be a reduction in the price of Jubilee-associated gas, the establishment of a secure reimbursement mechanism for gas sales, and focused investments in the technical and institutional capacities of GNPC and the Petroleum Commission. These efforts aim to enhance operational efficiency and adopt cutting-edge technologies in the oil and gas sector.

Crucially, all existing terms under the WCTP and DWT Petroleum Agreements remain unchanged, offering stability and reassurance to investors. The next steps in implementing the MoU include submitting an addendum to the existing Jubilee Plan of Development (PoD), finalizing new gas sales agreements, and seeking parliamentary approval for both the extended licenses and the payment security mechanism. These are all expected to be completed by the end of the third quarter of 2025.

Ghana’s Minister for Energy and Green Transition, John Abdulai Jinapor, welcomed the deal as a major step forward for the country’s energy landscape. He stressed that the extended licenses would not only help secure long-term energy production but also stimulate job creation and infrastructure development.

“This MoU is a clear sign of our commitment to providing a stable and attractive environment for energy investment,” Jinapor said. “It ensures ongoing oil production, supports economic development, and promotes responsible management of our natural resources.”

Tullow’s Interim CEO and CFO, Richard Miller, highlighted the importance of the partnership and the deal’s potential to deliver substantial value for Ghana and its development goals.

“This extension showcases the strong relationship between the government and industry,” Miller stated. “It gives us the ability to further increase production and reserves, unlocking long-term benefits for the country and for investors alike.”

Kosmos Energy’s Chairman and CEO, Andy Inglis, echoed similar sentiments, describing the MoU as a crucial move to boost investor confidence and reinforce Ghana’s position as a key player in Africa’s energy landscape.

“This agreement supports President Mahama’s commitment to an investor-friendly energy sector,” Inglis said. “It enables us to continue investing in Ghana and maximize the long-term benefits of the Jubilee and TEN fields for the people of Ghana and our shareholders.”

Altogether, the agreement marks a strategic step in Ghana’s journey toward a more secure, sustainable, and economically impactful energy future.