Tullow Oil and the Vitol Group, producers and marketers of Ghana’s oil, have rebuffed claims by a section of the Ghanaian media that the first consignment of 650,000 barrels from the Jubilee Oil Fields was sold below the prevailing world market price.
In a joint statement describing the assertion as incorrect, which was issued over the weekend, Tullow and Vitol said the price per barrel of Ghana’s first crude consignment was sold well over $90.
“We can confirm that the price achieved was well in excess of $90 per barrel, with a small differential linked to the Dated Brent crude price index,” they stressed in the statement issued on their behalf by Infocus PR, a communications and public relations firm.
Tullow and Vitol also stated that as crude oil sales contracts are private and confidential it is not customary to disclose further details.
They however said “It takes a while for the market and, refiners in particular, to assess the fair value of any new crude oil, since ultimately its value reflects the actual yield and quality of products that a refiner obtains as compared with its formal technical and paper yield.”
Confirming that many buyers had expressed interest in Ghana’s sweet light crude oil, Tullow and Vitol said “While we can’t disclose specific details of the actual price obtained for the first sale as these details remain confidential, there was significant interest in buying the new Jubilee crude from at least four major international buyers.”
Tullow Oil and Vitol also hinted of a strong interest from refiners and traders for the new Jubilee crude, which they believe, will contribute to meeting the growing global demand for energy.
The statement further explained that daily prices linked to an index can however move both up and down, as is the case with all crude grades, worldwide.
It expatiated further, that the use of the word “discount” when applied to an index price at the time of a sale, therefore merely indicates its relative value at that actual moment in time, which is a complex but well understood relationship in oil markets.
“It is totally different and should not be confused with the use of the word “discount” as in “sold below its true and fair market value” Ghana’s two oil producers and marketers said.With an initial production of around 120,000 barrels per day (bpd) Ghana will rank as sub-Saharan Africa's seventh largest producer.
The Jubilee Oil Fields are estimated to hold up to 1.8 billion barrels and have a lifespan of 20 years.