discoveries in and produce from the Tano Basin offshore Ghana, a significant new petroleum system
the industry previously did not consider either prospective or commercially viable.
Focus on optimally developing our discoveries to initial production
We focus on field developments designed to deliver early learnings and accelerate production.
There are numerous benefits to pursuing a phased development to support our production growth plan.
Importantly, a phased development strategy can provide for first oil production earlier than could
otherwise be possible using traditional development techniques, which are disadvantaged by more
time-consuming, costly and sequential appraisal and pre-development activities. In certain
circumstances, we believe a phased approach can optimize full-field development through a better
understanding of dynamic reservoir behavior and allows numerous activities to be performed in a
parallel rather than a sequential manner. In contrast, a traditional development approach consists of
full appraisal, conceptual engineering, preliminary engineering, detail engineering, procurement and
fabrication of facilities, development drilling and installation of facilities for the full-field development,
all performed in sequence, before first production is achieved. This adds considerably more time to the
development timeline. A phased approach also refines the appraisal and development plans based on
experience gained in initial phases of production and by leveraging existing infrastructure as subsequent
phases of development are implemented. Production and reservoir performance from the initial phase
are monitored closely to determine the most efficient and effective techniques to maximize the recovery
of reserves in the most economic manner. Other benefits include minimizing upfront capital costs,
reducing execution risks through smaller initial infrastructure requirements, and enabling cash flow
from the initial phase of production to fund a portion of capital costs for subsequent phases.
For example, first oil production from the Jubilee Field commenced in November 2010, and we
received our first oil revenues in early 2011. This development timeline from discovery to first oil was
significantly less than the industry average of seven to ten years and set a record for a deepwater
development at this water depth in West Africa. This condensed timeline reflects the lessons learned by
members of our experienced management while leading other large scale deepwater developments.
Identify, access and explore emerging regions and hydrocarbon plays
Our management and exploration team has demonstrated an ability to identify regions and
hydrocarbon plays that yield multiple large commercial discoveries. We will continue to use our
systematic and proven geologically-focused approach to frontier and emerging petroleum systems where
geological data suggests hydrocarbon accumulations are likely to exist, but where commercial
discoveries have yet to be made. We believe this approach reduces the exploratory risk in poorly
understood, under-explored or otherwise overlooked hydrocarbon basins that offer significant oil
potential. This was the case with respect to the Late Cretaceous stratigraphy of West Africa, the niche
in which we chose to initially focus. Many of our licenses share similar geologic characteristics focused
on untested structural-stratigraphic traps. This exploration focus has proved successful, with the
discovery of the Jubilee Field ushering in a new level of industry interest in Cretaceous petroleum
systems across the Atlantic Margin, including play types that had previously been largely ignored. In
addition, our exploration portfolio includes sub-salt plays, which has been the other recent successful
play concept along the Atlantic Margin.
This approach and focus, coupled with a first mover advantage and our management and technical
teams’ reputation and relationships, provide a competitive advantage in identifying and accessing new
strategic growth opportunities. We expect to continue seeking new opportunities where oil has not been
discovered or produced in meaningful quantities by leveraging the skills of our experienced technical
team. This includes our existing areas of interest as well as selectively expanding our reach into other
locations along the Atlantic Margin. We may farm-in to new venture opportunities to undertake
exploration in emerging basins, new plays and fairways to enhance and optimize our portfolio.
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