Ghana The New West African Oil

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Ghana - The New West African Oil Gas Province
May 2009
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Disclaimer This presentation has been prepared
by Standard Chartered Bank (SCB) for restricted
circulation. Neither SCB nor the distributors nor
any of its affiliates and/or their directors,
officers, employees shall in any way be
responsible or liable for any losses or damages
whatsoever which any person may suffer or incur
as a result of acting or otherwise relying upon
anything stated or inferred in or omitted from
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information purposes only and is based on
information available to the public from sources
that SCB believes to be reliable, but no
representation is made that it is accurate or
complete, and no information herein should be
relied upon as such. Opinions, projections and
valuations found in this presentation reflect our
opinion as of the presentation date and are
subject to change without notice. This
presentation is neither intended nor should be
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The New Oil Gas Province Ghana

• Exploration drilling began in Ghana in 1956
• Since then industry has experienced limited
  successes. That is until
• June 2007 Kosmos Energy Tullow drilled multiple
  exploration wells on the West Cape Three Points
  Deep Water Tano Block to discover the Jubilee
  field
• Since this success 3 further discoveries have
  been made (Tweneboa, Mahogany Deep Odum)
• A total of seven wells have been drilled with a
  100 success rate

Source www.woodmackenzie.com
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West African Oil Discoveries (1990-2009)

• Jubilee was the largest discovery to be made in
  Sub-Sahara Africa since the discovery of Zahiro
  in 1994 with 2P reserves 
• 1.2 billion barrels oil
• 1tcf associated gas
• First oil expected late 2010
• Still undiscovered upside potential
• Production Forecast
• gt 300kbopd, Phase I 120kbopd
• Capex Spend
• Phase I - US3.5bn
• Phase II - US8bn

Source www.herold.com
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The Game Changer Jubilee Overview

• The Jubilee (Jun 07) discovery spans two
  licences
• Deepwater Tano (DWT)
• West Cape Three Points (WCTP)
• Jubilee Gross Resource 600 - 1800mmboe
• Kosmos (31) is Operator of WCTP Tullow Oil
  (50) is Operator of the DWT
• Jubilee will initially be unitised with a 5050
  split of volumes across both blocks
• Phased development - subsea tie back to multiple
  FPSOs
• Water depth 1100m water
• Other Discoveries
• Odum (Feb 08), M-Deep (Jan 09) Tweneboa (Mar 09)
• 2009 Exploration
• Teak-1 Gross upside of 750mmbbl
• Onyina-1 Gross upside of 200mmbbl
• Owo-1 Gross upside of 200mmbbl

Source Kosmos Energy, Tullow Oil company
filings, WoodMackenzie
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Why is Ghana different?

• Benign fiscal environment (Government Take 50)
• Politically stable
• Peaceful 2009 elections with orderly transition
  to new Government
• Ideal location to access both US and European
  markets
• Good relations with neighbouring countries
• Good record in agricultural and mining sectors
• More developed business environment
• Ghana ranked 1st out of the Sub Saharan African
  oil producers by both World Bank Doing Business
  Rankings Transparency International 2008 CPI

Source www.transparency.org/surveys/cpi ,
http//www.doingbusiness.org
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Risks Challenges

• Expectation Management
• Oil production - Magic Bullet for Ghana economy
  vs. Mauritania?
• Expectations must be realistic in the short term
• Public demands for subsidised petroleum prices
• Revenue Management
• Revenue volatility
• Government borrowings
• Allocation of resource revenues
• Lack of domestic infrastructure (Gas network
  oil field services)
• Fiscal political stability
• Raising further funds

US32bn
Source WoodMackenzie Global Economic Model,
(Long term oil price c. US70/bbl)
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The Way Forward

• Future Jubilee developments will require (Phase
  II) US9bn capex (excludes Tweneboa, Odum,
  Mahogany Deep developments)
• Challenging debt funding environment
• Hydrocarbon price volatility
• No production history
• Country lines need increasing
• Growing asset concentration risk
• OG banks heavily committed
• SCB believes the Ghana Oil Gas industry has a
  bright future with its regional industry
  expertise looks forward to playing a pivotal role
  in its success

Source WoodMackenzie Asset Analysis
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