Good morning, everyone, and welcome to our virtual 2020 Capital Markets Day presentation. Firstly, I hope that everyone and their families are keeping well and safe in these difficult times. My name is Rahul Dhir, and I am joined by my colleagues, Les Wood, our CFO, Julia Ross, who is responsible for people and sustainability, and Wissam Al-Monthiry, who runs Ghana. We are hoping that our presentation today will last about 75 minutes.
After that, we will conduct a Q&A session, and we think we could finish sharp at 11:00 A.M. The mechanics of asking the question is slightly different, so when you want to ask a question at the end of the presentation, please dial in. There is a conference number which should have been provided in the press release. Just to give you a brief outline on the structure, you will hear from me, first of all.
We are excited about our new approach. We have been working hard at this, so we are really pleased, and we want to share this with you. A new approach to delivering both value and cash flow. Wissam will then talk about the ongoing operational turnaround and details on our plans to deliver value from the resource in Ghana. I will then come back.
I will talk about our non-operated portfolio, which is stable producing assets, and also our approach to unlocking value in Kenya and in the emerging variances. Then I will hand over to Julia. She will talk about the continued focus we have on ESG. Importantly, then Les will come in at the end, and he will explain how all the financials are underpinned by a very robust financial framework. Then I will conclude, and we will go into Q&A. That is the outline for the day.
I think some of you probably know me by now, but for others, I will just share a very brief on my background. I have been in the industry for over three decades, and I have done a lot of different things in the oil and gas sector. I started life as a petroleum engineer. I worked in the North Sea. I worked in North Africa, worked in the unconventionals in the U.S.
Then I drifted into investment banking, and I was an investment banker for 12 years, again, working mostly in oil and gas. I started in New York and then spent a bulk of my career in London, first at Morgan Stanley, and then at the energy group at what was then known as Merrill Lynch. Then for the last, I guess now 14 years, I have led businesses. I have been a CEO.
I started with Cairn India, which grew to about , it was about 200,000 bpd in operated production. Then I set up Delonex, which is private equity and IFC funded, with a lot of focus on exploration in Sub-Saharan Africa. Just stylistically, and hopefully as you get to know me better, you will see I am a very hands-on leader.
I have worked across exploration, across development, production operations, and have a very deep commitment to both safe and reliable operations. I have also, through my career, spent a lot of time in emerging markets. I guess given my background in both finance and private equity, I am also focused on costs, on the capital structure, capital discipline, and value.
I have been here now at Tullow for nearly five months, but in fact, I was fortunate even for two months prior to that, I had full access to the company and to a lot of my colleagues. I was able to hit the ground running on July 1st. During this time, it has been fun.
I have completely immersed myself in the business. I have got to understand every aspect really well, but I have also had a chance to go to Ghana, where I have met our key stakeholders, including His Excellency, the President of Ghana. I have met the Minister of Energy, a lot of our key partners. Also, virtually, I have met pretty much all our key stakeholders across key countries, so in Kenya, in Gabon, in Côte d'Ivoire, in Suriname, in Equatorial Guinea.
What I found through my work in these past months, and this is important, what I found was a business with a really large resource base across our producing assets. This base is supported by some very extensive infrastructure. What I did realize and did understand was that the resource had not been given the attention that I believe it deserves or in fact, the capital allocated to it.
I have asked around, and some of my colleagues have attributed this perhaps to a desire to be all things to all people. As a company in the past, we attempted to do a variety of things, onshore developments, frontier exploration, and deepwater operations at the same time. What happens is, in the absence of that focus and rigor, operational performance suffered.
Also what we ended up doing was burdening the business with a very high cost structure, and too much debt. Also the historic underinvestment in the core assets, that is resulting in the production decline trends that we will need to reverse. These are humbling lessons, and we are making sure that we learn very carefully from the past.
What we have done is we have approached the business very fundamentally with a very different attitude. Perhaps you could say it is similar to that of a new private equity owner. What that has led to is a detailed assessment of our costs, our debt levels, our organization, our capital structure, and all of our assets.
What we have done through this process is we have leveraged the deep internal knowledge that is there, but also we have incorporated input from outside and also from some of the best minds in the business. What we have as a consequence of this is a much more focused business. Firstly, through cost savings, safe and reliable operations, and active reservoir management, we will maximize operating margins and cash flows in the near term.
What that allows us to do then is to invest in a very deep portfolio of high return quick payback opportunities, and I will talk more about those. That delivers future production and cash flows that we can use to reduce debt and create value. I think we, and I will demonstrate this, the resource base also provides very ample scope for replenishment and value creation, and importantly for our host nations and also for our investors.
And what is critical is that we can do all this with the assets we have. We do not need to go out and buy anything. This is on the basis of the assets we have. What we have today, and I will share with you, is that we have a focused and a lean organization, with a very clear sense of purpose. There is a lot of excitement and enthusiasm in the team as we look to rebuild a resilient business. Again, on behalf of my colleagues, I just want to thank you for the opportunity. We are really delighted to share our insights and plans. Let us get into the presentation. This has been an eventful year, a year of significant change.
There are some very fundamental changes to what Tullow is, to how we run our business, and very fundamentally, to what our value proposition is for you. I think many of you who have been shareholders and investors are familiar with the operating challenges we have had in the past. You know the assets are complex, and there are no quick fixes.
What I am pleased to say is that we have got a very good operational team in place with a well-defined turnaround plan. My colleague, Wissam, he will share more details on this with you. At the half year results, you heard Les and I talk about the cost focus. That price has been identified in a very systematic way. It has been validated with external challenge, and now in essence, we are in a delivery mode. I am pleased to say the response from the organization has been terrific.
What we are doing is we are embedding a real cost focus and a performance mindset in our culture. This is very critical. It is very exciting. I was in Ghana a few weeks ago and had a town hall at our logistics base, and I was talking about cost focus. Somebody, one of our colleagues asked me, they said, "Well, how could you put this in practice?
What does it mean? How do I do this?" As we talked about, we said, look, the simplest way to do this is to treat every dollar that you spend as if it is your own. It is a simple idea, and it has resonated across the organization, and it has resulted in a bottom-up focus on every aspect of our spend. That is the kind of culture change that is coming through in the organization.
As I mentioned to you, I spent a couple of months before joining. Back in May, this was probably about six weeks before I joined, I had my first deep dive session in Ghana. What struck me immediately was the scale of the resource. Across Jubilee and TEN, we have 2.9 billion barrels of oil in place. But we have only produced about 400 million barrels of that.
What we have is a resource of 2.5 billion barrels of oil in the ground with major infrastructure in place. That is a pretty incredible position. We saw similar but smaller potential across our non-operated assets. What we did was we initiated a very comprehensive review of every investment opportunity across all of these assets. What this generated was a very large portfolio of investable opportunities.
We then went through a process of systematically screening each one of these, and we hydrated the high return and quick payback investments. Of course, they are all in our producing assets where we have under-invested in the past. This kind of disciplined approach to capital allocation, I would submit to you, that is fundamentally different from what we have done in the past.
What we have in the plan that we will share with you is the flexibility to self-fund. This is critical, to self-fund our capital spend and to reduce debt even at low prices. Very importantly, these investments will help reduce production growth, and they create value for all our stakeholders. The other thing I just want to highlight is our ongoing commitment to ESG.
Again, during my last trip to Ghana, I visited our operating base. We have gone through a very comprehensive reorganization, right? Through this reorg, what we have done is we have focused on our activities, we have reduced management layers, we have simplified decision-making. All of that has resulted in a reduction of over 60% in our staffing levels.
Right? We have moved quickly, and we have taken some tough decisions. The important thing with doing this was that we could provide stability and clarity to those that remained. I am pleased to say all that change is behind us now. The new team is in place, and we are moving forward. What you see in this, these are my senior colleagues you see on this page. Right? There is a mix of long-term Tullow people and new talent.
Roughly half of the people in this group joined us in the last 12 months, and the other half obviously have been here for longer. What that does is that gives us a very interesting combination of deep institutional knowledge along with some new ideas. I think collectively as a team, and you will see on the people's experiences, we have a lot of breadth and depth of experience and very complementary skills, right?
Each person on this page sort of brings a very unique skill set, so it is kind of part of a bigger mosaic. Importantly, as a team, we have a common understanding of the opportunity, and we are united in the mission to deliver value and cash flows. What we are also doing is we are creating a culture of innovation, where we are open to new ideas and challenges.
We know we are a small company, and we want to leverage the best minds in the business from wherever. Working with external advisors as well. For example, I could give you Partners in Performance. They are supporting us to deliver value in such critical areas like contract management and maintenance planning for Deep Water Tano .
Another example is INTERA, which is a very high-end reservoir engineering consultancy from Austin, Texas, and they are working with us to help optimize development of resources in Ghana. The team then is working on the plan. Maybe now let me just share more details about our plans. This slide really summarizes the essence of our value proposition, which is really the focus on delivering cash flows and value.
Firstly, we have a solid production base, and you have heard me talk about this, and you will hear me talk about this more, which is underpinned by a very large resource base with material organic growth potential. Importantly, this is where we will spend 90% of our capital as we go forward. We are in transition to more reliable and consistent operating performance, Wissam will talk more about that.
That will help build confidence in our operations delivery. With a singular focus on cost, we will deliver high margins, and we ensure that we generate cash flows to fund our investments and reduce debt. That disciplined approach to capital allocation that ensures that we have high returns and rapid paybacks.
For example, at a $55 flat nominal, what we are looking at is flat nominal, not real oil prices, we can deliver $7 billion in operating cash flows over the next 10 years. Of that, over $4 billion is available for debt service and shareholder returns.
That puts us in a pretty strong position. Our strong geoscience skills, subsurface skills, that is something that is integral to who we are, that enables us to maximize recovery and to add additional resources to this production base, and it enhances further value from there. This is on the production side. On the right side of the page, you see we have some very interesting positions in emerging basins and in Kenya. We are reassessing the development in Kenya to make it viable at low oil prices.
Also what we are doing is working to better define the prospect inventory in key basins like Ghana. What this requires is not capital right now. It requires an innovative approach and deep geoscience and engineering expertise. I think these positions, they offer a pretty unique opportunity, I think, to unlock value.
That is why we are very confident that the approach that we have delivers this very kind of interesting combination of highly visible, sustainable cash flows plus some additional material sources of value. Now the $7 billion of operating cash flow, again, it is a big and impressive number. Let me, over the next couple of slides, I will show you how we will achieve this. As I said, we have a large portfolio of well-defined, resilient, profitable investment opportunities. Let me explain.
That helps explain why we are excited about investing in our production base. These are fundamentally our producing assets. I would describe them as they are structurally advantaged. What do I mean by that? What I mean is there is large remaining reserves and resources which are supported by extensive, very existing infrastructure. Intuitively, you understand the returns from incremental investments on this sort of a setup are going to be very attractive.
As I mentioned earlier, over the last few months, we have analyzed every investment opportunity in our producing assets. What we have also done is we have looked at the cost structures, we have looked at development schedules, we have looked at subsurface assumptions. We have changed and transformed a lot of these. We have also incorporated challenge from external advisors and from our partners.
That's kind of we've reworked some plans, and I think we have a much more robust understanding of the potential of our resource. Through this exercise, what we've done for now is we've hydrated over 60 investments that are currently included in the plan. These investments, you see the cleaning curve on the left part of the page.
That's where these investments are going to map out. What you see is that they deliver an average of over 80% IRR at $55 long-term flat prices. Even at lower prices, these are very profitable. Many of these are short cycle, and they pay back rapidly. What's also critical is, given the nature of our production sharing contracts, they create very material value for our host governments as well. We're all aligned.
What's also important, I just want to highlight, is that this is not the end of it. There are many more opportunities in the portfolio that are being worked on, and they'll be included in the plan as they mature. What we wanted to do for today is to just talk about what we can deliver from defined opportunities.
These are activity plans also, they have flexibility, so we can manage the capital spend, and Wissam will talk about the range of capital spend. We can manage the capital spend up or down based on the oil prices. These investments obviously are based on a very material resource. Let me now talk about that. This is material resource, and what I'm going to focus on in this slide is really our producing assets.
What you see in the chart on the left is what we've identified today, which is a combination of recoverable reserves and resources of nearly 650 million barrels net to us. Remember, this is in the producing assets only, so it does not include potential, for example, in Kenya. These volumes, they are de-risked.
They're underpinned by the defined projects that I just discussed. What we've demonstrated this year, for example, with the 100% reserve replacement, is that we have the ability to replenish our reserves from this very extensive base. In fact, if you look over a 10-year period, where we expect to produce about 260 million barrels over the next 10 years, we will still have, at the end of 10 years, nearly 400 million barrels net from this resource.
As we do more work on recovery factors, we add near-field potential, we expect this to be enhancing. It's not a static picture, but the foundations are such that the resource will grow. That's an important point. What we have in essence is, and that's what for me was the big paradigm shift, is that this is a resource play, and what the resource play has the ability to replenish itself, but it also has the ability to deliver visible production growth for the foreseeable future.
That's what we've tried to illustrate on the chart on the right. That level of visibility is quite unique. As I said earlier, we have under-invested in these assets in the past. To give you a sense, the last well we drilled in Jubilee was in July of last year.
This year, we added only one well in TEN. While the story this year has been good, and Wissam will talk about this, we have done a remarkable job operationally. This lack of investment will lead to a decline in production next year. We will share our guidance with you for 2021 in January, once we have all the budgets approved by our partners and host governments.
What is interesting is that the cost savings that we are banking, they will more than offset the cash flow impact of any production decline. Les will talk more about it, so I do not want you to see it as thunder, but we are looking at very material cost savings, both on G&A side and the OpEx side.
What that does is that allows us to generate sufficient operating cash flows for investment, even at low oil prices. We are looking then to restarting the investment in a very aggressive way next year. What that means, therefore, is that with the large resource that we have and the deep inventory of investment projects, the key driver then for production growth becomes capital spend.
As we start this kind of multi-year, multi-well drilling campaign by mid-next year, that is what enables us then to start growing production and to sustaining it or even accelerating it. Because as I said earlier, the plan generates about $7 billion in operating cash flows. We have got, at least in this plan right now, we have about a $2.7 billion capital spend. We are comfortably self-funding that. We have over $4 billion left for debt service.
Net debt, Les will talk about, is about $2.4 billion. I think we are in a pretty good position and that we can accelerate capital spend if we want to deliver higher production growth. Let me just conclude this section. I think the key points I wanted to reiterate was that the production assets have a large resource base. There are well-defined investment opportunities.
That is on the production side. On the resource side, we have got material positions both in undeveloped resources and in emerging basins. Given this asset base, we do not have to look outside for opportunities. The focus that we have right now is on delivery and on execution. We have got a very clear roadmap to follow.
We are in the midst of an operational turnaround, and 2021 will be a year of transition when we embed good operating performance, cost savings, reservoir management. Then it is about sustaining this and implementing a mindset of continuous improvement. I think we are well on our way to becoming a strong operating company.
That is kind of very much the vision that we have. I have talked about our very rich investable opportunity set, and I have said this before, but I will just reiterate the point, which is that the cost savings and the operating discipline that we have, that allows us to deliver high margins even at low prices. With disciplined capital allocation, that means you can self-fund all the high return opportunities.
As I mentioned, we're going to start drilling in Ghana, but since we're not short of opportunities, we can accelerate drilling in Ghana, for example, with a second rig, if oil prices improve. So from this producing asset base, we have strong cash flows. We have proceeds from Uganda. We're considering other asset sales as well. So that gives us a very strong foundation.
I know many of you are keen to understand how we're going to deal with the debt, but that gives us a really strong foundation to address debt maturities and to progress any refinancing options. Also what you see, and Les will talk about this, with strong cash flows, the business is very well-placed to rapidly reduce our debt levels. In addition to all this, in the near term, we've got some very interesting levers to unlock value.
For example, as we revise the development plan in Kenya, we're drilling exploration well in Suriname, we're maturing the prospect inventory in Guyana, and we're adding to the investment opportunity in our producing assets. Also, I think this is a very exciting journey, but I'm also pleased to say that this journey will create very material value for our host governments. It will deliver a positive impact to our local communities.
We will further enhance local content, and we will significantly reduce our emissions in this journey. So it's not often, I think, in a business like this or in life that you have complete clarity on what needs to be done to deliver success. Today, we have that clarity, and we have the team to make it happen. Let me now hand over to Wissam. He'll talk to you about our operational turnaround and how we're maximizing value from our resource in Ghana. Wissam, over to you.
Thank you, Rahul. Good morning, everyone. Let me start by briefly introducing myself. My name is Wissam Al-Monthiry, and as Rahul said, I'm the Managing Director for Tullow's business in Ghana. I was appointed to this position back in July of this year after joining Tullow just a few months before.
I'm a chemical engineer by background, and I spent the majority of my career at BP, primarily in offshore and deepwater operations, including leading sites where I was lucky to be an offshore installation manager, as well as asset management in places like the U.S. Gulf of Mexico, the U.K. North Sea, and the Caspian Sea. Most recently, I was Vice President of Operations and Head of Country in the North Africa region for BP.
What I bring to the senior leadership team of Tullow is a depth of operational know-how and technical and commercial integration at a country level. I have worked successfully with a number of governments, threading that needle between value to the country and value to my company and its partners. That is what I am bringing to the table here in the business in Ghana.
My aim this morning is going to be to tell you a little bit about our business in Ghana, expanding on some of what Rahul talked about already. I am going to start by speaking about what we have done and continue to do to turn around our operational performance, which we genuinely believe is at the heart of becoming a reliable and consistent operator. Starting here with slide 10, which hopefully sets the context and the frame.
What was really clear to us right from the start was that the business in Ghana had a prolific discovered resource base, and of course, we had put in place significant infrastructure over the years. The opportunity, though, as Rahul mentioned, was in operating TEN and Jubilee to their maximum potential. We had longstanding equipment defects and a number of surprises over the years, which had required the team to focus on the response to those rather than forward-looking risk mitigation, which we are very much focused on now.
Alongside that, we really need to get back to basics. Being focused on meeting our daily, weekly, and monthly production targets, making sure our cost base is in line with industry benchmarks, and really working effectively with our partners, including, most importantly, our host, the government of Ghana.
We set about formulating an operational turnaround. I wanted to tell you a little bit about these transformation work fronts that we categorize this turnaround around, and that is what is showing here on the slide. It all starts with safety. We believe a safe business is a reliable and efficient one, as well as, of course, a place where people want to come to work, and that is very important. We developed and we have been implementing a multi-stranded plan to enhance both personal and process safety performance.
We also found quickly that we are much stronger working with our joint venture partners rather than in conflict, and we began actively leveraging each of their individual strengths and capabilities. They have got a lot to offer. After all, we are a partnership. We may lead as the operator, but always with strong support and collaboration from our partners. We are also enhancing the organization.
We are building a world-class operating team with particular strength in deepwater production, drilling and completions, and subsea projects delivery. We are focused a lot, and this is something I am spending most of my time on integration, on how everyone works day to day.
Decision-making has to be truly representative of all the parts of the total picture that is the Ghana business, and that generates value. What followed is an intense set of efforts to get operations and cost management outcomes to a new benchmark. I am going to tell you more about those in the next few slides. Moving on to slide 11, it was clear to us that there was significant value in enhancing our facility's reliability.
Just today, you just look at our morning reports today, Jubilee is producing over 80,000 bpd on a gross basis and TEN in the mid 40,000 bpd range. Think about it. Every 1% of extra FPSO uptime has a sizable prize attached to it, and we are getting after that. We are establishing a culture in the company where every barrel matters. Every barrel matters.
One where optimization of every element of our operations is closely integrated across all the functions and rigorously performance managed day to day, month to month, and year to year. With this strong and globally experienced operating team being built, we have started to realize sizable gains in uptime through taking more direct control of our operations on the Jubilee and TEN FPSOs. Absolutely laser-focused ownership and oversight.
We are complementing this foundation with a plan to fix longstanding equipment defects across both fields and FPSOs, and sustaining this by putting in place systemized monitoring and mitigating of risk. Again, going back to my previous point, this way we are proactively addressing emerging issues well before they could impact us.
Finally, we are building an equipment systems maintenance management infrastructure to help underpin the upholding of these improvements. We are not there yet, and in operations, I feel you should never believe you are fully arrived. But significant progress has been made to date, and you can see that on the results here on this slide. As for the business plan, I should note that we are stopping short of embedding uptimes as high as the 98% we have achieved year to date in 2020. There is more upside to play for.
Switching focus to the right side of slide 11, the reliability story on production applies equally to our water injection systems. They are really important for our business plan delivery, particularly on Jubilee. Our plan is to gradually, through equipment fixes and enhancements, build up water injection capacity, which is optimal for our reservoirs. The numbers you see here, ultimately growing to 300,000 bpd of water , speak to the story for Jubilee.
We have already delivered value against that. We have already seen oil recovery benefits in the improvements to date. If you couple that with increasing uptime, we will be really well set up to pull through sizable amounts of incremental oil barrels for the really long term. Moving on, a really great example of integrated management leading to performance improvement is in the gas export ramp-up we have achieved in Ghana this year, showcased right on slide 12.
By the way, exporting more gas helps us produce more oil, it reduces our carbon footprint, and most importantly, it helps deliver valuable free gas to the country of Ghana to fuel its growing demand from its domestic power and manufacturing sectors. That is a fantastic goal to have. But increasing export isn't easy.
It requires continual subsurface assessment to optimize our well mix, lots of engineering debottlenecking of our plants, and operations delivery to create consistent and predictable flow from our side. We also have to couple that with active engagement with the various arms of our host government in Ghana to achieve maximum take from their side day to day. Through this, we have managed to get to a peak export rate of 135 million standard cubic feet earlier this month, and 95% of that comes from Jubilee.
We are going to use this as a foundation to scale from. From this point, we intend to sustain this, commercially firm it up, and grow gas export, as shown on the slide here, in line with forecast growth and demand in Ghana, which is quite appreciable, actually.
That is going to require more of what we have done in 2020, but we are confident that with the recent track record achieved, we are well set up to scale that over the years to come. To become a world-class operator, not only does every barrel have to matter, like I said before, but like Rahul talked about, every dollar matters has to become ingrained in the culture as well. Slide 13 speaks to what we are doing on costs in the Ghana business.
While our unit cost is actually competitive, it was important to us that we could sustain that in the face of declining production linked to the lack of investment in recent years, again, as Rahul talked about earlier. When we looked at things, we found that our cost footprint was really akin to those of a. The elements that make up our cost footprint were akin to those of a major. They were not really ones commensurate with a small, nimble, and efficient operator.
We had opportunities in areas like manpower optimization, resource utilization, supplier contracts managements, and just overall performance management. Just as a really simple example to give you, when we looked at our supply boats, the ones that go every week to our FPSOs and supporting our operations, they are averaging just about 60% capacity utilization on a weekly basis.
Getting that 60% to 80%, it represents millions of dollars in savings annually. It is things like that that we are laser-focused on. We have set out to address all these and other issues well beyond just reducing contract rates stemming from the well-known industry deflation.
We have used external help from industry experienced consultants embedded in our front lines, not sitting in our headquarters, embedded in our front lines to really granularly support us in reducing costs for the long term. There is definitely more to do, and you could see that in the need to reassess our operating cost structure on TEN. But we feel we have put ourselves in a really good place now with what we have done in 2020 to do so effectively.
I want to finish this piece by just saying it is really important that our mission to reduce our cost base does not come at the expense of improving our safety performance, and it absolutely does not. Maintenance and integrity spend is carefully ring-fence. From my background, I know the criticality of doing this really carefully. There are certainly areas where we are going to be spending more over the coming years like that.
We also continue to plan facility shutdowns to keep up with integrity requirements, as is planned for Jubilee in the coming 18 months. Overall, though, by becoming smarter and more efficient on how we do things, there is much more cost gain to come. Slide 14 here speaks to an important area of performance improvement for us in the Ghana business, which is our drilling capability. It is a major contributor to our annual capital spend.
It represents about two-thirds of our spend for the coming years, to grow the business. Given the deep bench of small to medium-sized projects that Rahul alluded to, being able to drill and complete top quartile wells is key to their quick payback horizon. So again, a big area of focus for us. We already see line of sight to about 20%-30% reduction in our average well costs, and we are achieving this through plans, the focus plans addressing a few high-impact areas I wanted to highlight. I am going to highlight just three of them from this slide.
The first is the complexity of our well designs. Our experience has shown us that although well-intentioned, designing wells to access really far step-out resource targets and build in multi-zone production, it just introduces more risk and cost than benefit it provides.
We are going to be focused on quick, simple and cost-effective barrels brought on stream in Ghana, and we have got a lot of those opportunities. The second area I wanted to highlight is integrated planning. Streamlined barrel pull-through in infrastructure-led development basins like TEN and Jubilee, it is very much enabled by subsurface project, and operations teams working hand in hand from the initial inception of a well opportunity.
So we are very focused on creating the habitat and processes to have that continuous workflow through multi-year rig campaigns. The final area I wanted to mention was just leveraging scale in the supply chain. The drilling sub-sector has some very capable service aggregators many of you will be very familiar with, and they have got proven track records across numerous simultaneous product and service offerings.
Our forward strategy entails leveraging this to its full potential and enabling greater concentration of capability, reducing costs, and of course, streamline performance management. We also know that it will give us increased local content through our supply chain, and that is an important objective for us. So in this next section, I am going to talk you through how we are thinking about our fantastic opportunity set available to us in Ghana.
Slide 16 here lets you know a little bit about how we are thinking about our investable bench, and it is in four large categories, all of course, connected to each other. So the first category is our existing production. We feel like there is a little under 300 million barrels of oil in place on a gross basis between the TEN and Jubilee field to be produced till the end of the license periods if we took no further capital investment action.
Maximizing the recovery of this 300 million barrels of oil in place is all about operational excellence in line with what I talked about in the previous slides. Next is the infill wells. So these are well options, discovered resources that we know can be accessed with limited incremental infrastructure requirements, and they can be drilled into in short order. After that is what we call our project opportunities.
These are discovered resources within our plans of development, but they require additional subsea facilities to bring on stream. If you take that projects category and you add it to the well options category before it, we have line of sight to about 350 million barrels of oil in place on a gross basis. Finally, there is a slew of opportunities that we have line of sight to, but they require some form of commercial access ahead of development.
That includes things like infrastructure-led opportunities around TEN and Jubilee, unassociated gas, as well as oil production beyond the current license periods. The value gained from these possibilities, it has not been built into our business plan. Again, there is more upside here to play for in this fourth category.
Just as a quick illustrative example, if you take the TEN fields, if you just take the well options and define projects categories, you achieve up to 28% recovery within the current license period. Just by industry norms, that would suggest that there is additional upside opportunity to be covered from that fourth value category, and I am going to shine a light on a little bit of that for you in the next few slides.
Altogether, this provides a really rich pipeline of investable opportunities, each of which are really material pieces, and they have got really quick paybacks and high returns. Also, none of them is large enough such that they individually make or break for the business. So it gives us a lot of utility in our portfolio in Ghana.
What I verbalized while talking about the previous slide is summarized here on slide 17. Jubilee and TEN are just two big areas composed of multiple fields that have had, on average, about 14% of their resources recovered. That is about 550 million barrels of oil in place on a gross basis to play for, and that is just within access to resources and current license periods.
The bench is deep and the major infrastructure is in place with two effective and improving, of course, FPSOs as I talked about, and vast amounts of sub-sea facilities already laid. On the next slide 18, we zoom into the map from the previous one, and I wanted to just give you a little sense of the specificity we have around these opportunities.
On all three of the major TEN fields, there is defined extension prospects, including areas like Tweneboa West, Nyanza South, Nyanza Central and North, and of course, also mentioned here, Greater Ntomme. On Jubilee, our most immediate projects are Jubilee Southeast and Northeast, which I will come to on the next slide. Of course, all these projects entail drilling wells and tying them back and producing them through the TEN and Jubilee FPSOs.
Hence, there is a lot of synergy with our efforts to build on strengthening our subsurface operations, drilling, projects execution capability, and reducing our cost base. These benefits, they just deliver a compounded value for the future. In addition, both Jubilee and TEN have a number of infill drilling options which could be accessed with limited to no additional infrastructure and brought online very rapidly.
Moving on to slide 19, we are going to take a closer look at the next 10 years of drilling opportunities across TEN and Jubilee. As you can see, while this is a packed activity set, these are very economic wells, even at the lower end of the anticipated production range for each. These wells are either infill options, again, which can be drilled from existing infrastructure, or they fit into our defined projects category.
Jubilee Southeast and Northeast are very well-defined, and they've actually already had their phase I sanctioned with first wells online in 2022. The TEN projects I spoke about are being matured as we speak, and we should progress through sanction in the next two years. My next slide 20, gets into the fourth category of value, which is again, over and above the current business plan.
One reality seen time and time again in our industry is that big fields just get bigger, and we expect Jubilee and TEN to be no exception. On Jubilee, we're currently targeting up to 40% resource recovery during the license period, but again, we see significant additional resource potential possible through enhanced recovery and base production beyond the current license expiry.
On TEN, there's two sizable prospects that we're evaluating right now in Tweneboa West and Greater Ntomme, both within tie-in reach of the FPSO. We're assessing these opportunities further and working with the government of Ghana and our joint venture partners to move these towards development. Finally, beyond these investable oil opportunities, Jubilee and TEN have an appreciable unassociated gas resource in their coast code.
We estimate this to be about 1 trillion cubic feet of gas in place on a gross basis. That's a lot of gas. The development of this resource, it aligns well with the government of Ghana's vision to grow the domestic power and manufacturing sector. It's worth putting ourselves in a position to pursue it.
I'm going to end here on slide 21, where I want to give you a little bit more on access prospects in and around our fields in Ghana, specifically in this case on TEN. Again, this is potential value above and beyond our current business plan. In Ghana, we've developed a really exhaustive inventory of potential tie-in targets, and we're maturing multiple options that can contribute over 100 million barrels of oil equivalent in place on a gross basis.
That's attractive growth potential, and it's in our own backyard. We've begun the engagement with the government of Ghana towards access rights, of course, where appropriate. In neighboring Côte d'Ivoire, we're defining the continuation of this TEN resource play into what's now known as Block CI-524. Our newly reprocessed seismic data is revealing very attractive potential. We're progressing the technical evaluation, leveraging our existing geoscience expertise.
These are all potential opportunities that could be tied into the TEN FPSO and they make up part of what you've hopefully now seen as a deep bench of value investments for our business in Ghana. With that, I just wanted to say thank you to everybody for listening, and I'm now going to hand back over to Rahul to tell you about our non-operated portfolio. Rahul, back to you.
Okay. Thank you, Wissam. I will talk about our non-operated portfolio, which is a fantastic set of assets. What is really great about these is they provide, again, very visible, stable production cash flows. This is all, again, through defined projects, through near-field exploration and license expansion. It is a diverse portfolio, as you can see, it is across three countries: Côte d'Ivoire, Equatorial Guinea, and Gabon. What we are pleased is that all our partners here, we have good operators.
They have tremendous depth and experience, particularly in these countries. Each one of these has very flexible but very valuable investment opportunities. Also what it does is some of the positions that we have, they offer some very interesting short cycle near-field exploration projects.
A good example is, I do not know how many of you are familiar with this, but we have the Simba field in Gabon. It is operated by Perenco. We have a non-operating stake of 57.5%. This was tied back to the Tchatamba platform, which is offshore in Gabon, back in 2019. It is still producing about 4,700 bpd net to us. The whole cycle from discovery to tieback was just a few months. That is the kind of opportunities that you have in this business.
Now we have made some pretty major changes in how we run this business. To give you a sense, last year we had 46 people in the non-op team, and they were covering a very wide variety of activities and disciplines. But we sat down and Jean-Médard Madama, , he was on our team that I described.
Under Jean-Médard Madama 's leadership, we sat down and we said, "Look, let us be clear about where we are adding value and where we are focusing our efforts." What we have done is through that effort, we are now able to run this business. He is running this with just 15 people. Let me just then just move to just talk about some of the defined projects that underpin this kind of non-op production base. Across the three countries, we have a pretty well-defined inventory of investments. This is a diverse portfolio. These are fairly mature fields.
They are well understood, and it is a mix of infill wells and there are some development projects. On balance, I would say the projects are at relatively low risk, and they are technically simple and they are managed by what, as I said earlier, experienced and efficient operators who have got proven track records.
Generally, a fairly low risk portfolio of investment opportunities. Also, critically, these projects, all of them, as shown in this page, they deliver very high returns, and very, very rapid paybacks. For example, in Gabon, we have got expansion opportunities across most of the fields. This will involve over 40 wells. We have line of sight on at least two projects involving MOPUs, which is just Mobile Offshore Production Units, and that is for increasing water handling and power generation. That allows increased offtake from fields.
These are, again, very profitable. In Côte d'Ivoire, CNR is the operator. They are looking at the phase IV infill drilling program. That is going to add six wells, six infill wells. There are, I think, four producers and two injectors. That is, again, a very high return project.
It adds resources, but it also extends the economic life. Similarly, in Equatorial Guinea, we have the Okume field. There is an infill program there, and that provides again short payback and high returns. I think you can see why we are prioritizing capital spend in these non-operated assets. Let me now shift gears to talk about our non-producing assets and where we plan to unlock value in Kenya. Our Kenya business is run by Madhan Srinivasan .
He has been part of the team for a long time, knows the Kenya assets really well. The emerging basins portfolio, the exploration business that is being run by Amalia. Amalia joined us earlier this year, from Repsol, and she was at Exxon before that.
If you look on slide 26, the focus across Kenya and the emerging basins is about how do we unlock value from this stuff? It is about discipline sort of focus. This year, 2020, has been a year of transformation for this. We have sold, as you know, we have sold our assets in Uganda through very disciplined rationalization. We have migrated our exploration portfolio. We have exited about 11 blocks, and we are progressing exits in two countries.
Essentially, the story is about Kenya and about selected emerging basins. We really like these positions. The reason why we like them is because we have a differentiated ability to unlock value here. Kenya is a big resource. I mean, you guys are familiar with this, but it has got many development challenges, and it does not work at low prices.
We are working closely with the government of Kenya. We are working with our partners, and I will talk more about that to see how we make this project viable. In exploration, we are concentrating on the areas. Amalia and the team are working on the areas where we can leverage our core strengths. What the team is good at is deepwater turbidite systems.
That is kind of the theme here. If you look at the focus on the map, you have got along the transforming of non-tech margins, that brings synergies within the portfolio. Again, on the map, you will see we have got a very material, very interesting position in the Suriname-Guyana Basin. That is really where you will see the pie chart with the prospective resources on the right. 60% of our risk prospective resources are really in the Suriname-Guyana Basin.
Now, this is one of the hottest emerging basins, and we will have activity here in the near term. The important thing is that these are big opportunities. It is a large portfolio, but we have limited commitments, and that gives us the option then to focus on a rigorous application of our intellectual capital. That gives you kind of an overall picture, but let me now focus first on Kenya. In my view, the challenge in Kenya is not the resource.
It is large. It is well-defined. We have got lots of exploration wells, lots of appraisal work has been done. The challenge is the complexity of the development, it is the commercial arrangements, it is land and water issues, and it is also the overall economics. I think some of you are familiar with the original development plan, right?
Now, that was meant to work at oil prices of at least $50 real, right? If you think about a lower for longer oil price world, it doesn't work. The good thing is these are shallow, productive reservoirs and light oil. Let's say if this was West Texas, it would have been really, really valuable. But the problem is it's not, right? But what we do need is we need a different mindset for this project. We need a different way of thinking about it.
And that process of changing the mindset, that review will take some time. What we're pleased is that the government has agreed to give us an extension on a conditional basis. We've now submitted what they asked us for. The big conditionality was that we submit a 2021 work program.
We've submitted it to that government, and we're in the process of agreeing the budgets. And pending that, we expect we receive the full license extension until the end of 2021. And what that does is then it gives us time to review the development concept while we work in parallel with the government to address the wider kind of commercial issues and non-technical issues that we need to address to de-risk the project and to make it investable.
Now, we're not starting with a blank sheet of paper. We've got a solid foundation of technical work, commercial work from which we build on. I think there's a lot of work that's been done on, for example, tendering, which gives us a good sense of the market, the costs.
What's important, and that's going to change, this is going to be critical, is that the early oil production system is complete. We've got six months of production data, right? That's very fundamental because it'll help us improve our understanding of the dynamic performance of these fields. So all the other critical areas, which is really land, water, environmental approvals, commercial agreements, which is required to implement the fiscal package to support the development, all these require effort.
It is not simple. But what we're encouraged by, the government is very keen to progress these. Let me just talk a little bit more specifically about how we're approaching the redesigns. We don't have numbers yet, but essentially kind of to walk you through. While we're waiting for our work program and budget approval for 2021, we've already started work with our JV partners.
We've created a very lean and focused team, working very closely with our JV partners, and that team is doing very detailed work, and we're also leveraging some external expertise. Some of the areas, and I'm not going to go through all of these, but some of the areas that we're focusing on is kind of reevaluating.
And these are kind of things which think about these as levers that will give us a different perspective on this. So we're looking still at a phased development concept, but the areas that we're looking at for improving our confidence in reservoir performance, so integrating all of the recent production data. We have injection data, but from EOPS, all that will help us increase confidence in reservoir performance.
I think one of the big things is going to be how do we come up with a drilling program that is targeting the most productive parts of the fields in the early phase of the project. What that does is it allows us to potentially deliver higher IP. Also in addition to that, we are looking at saying how do we accelerate more production within the license period.
That is on the kind of subsurface. Then we are looking obviously at optimizing the CapEx and the OpEx. We are also looking to reassess the water injection plan to improve overall recovery and looking at how we enhance sweep efficiency. Again, if this was in West Texas, you would have a very different approach to water injection. We are trying to figure out how do we integrate some of those approaches here.
I think all that then creates a kind of potential to accelerate resources within the license period, maybe through a higher and longer kind of plateau. This is all work in progress, and we will integrate this with the work we are going to be doing with the government of Kenya on the fiscal packages. The plan is to kind of create an investable opportunity and deliver a Field Development Plan by the end of 2021.
That is the story in Kenya. Let me now move on to our the very material positions that I talked about in the emerging basins. I think many of you are familiar with the recent discoveries in the Guyana-Suriname area. I have highlighted those in green and red on this map. You can see that. You can also see that our acreage in this basin is well-positioned.
In Guyana, for example, we have tested the extension of these proven plays into both of the Kanuku block and the Orinduik blocks. That is in Guyana, right, with the 2019 wells. I think there is good calibration. The team is doing is they are maturing, they are de-risking the prospect inventory. You could see that kind of in orange. In 2021, we will generate some drillable prospects. That again, what that allows us to do is to plan for the next phase of drilling.
In Suriname, the blocks are positioned in the further extension of the kind of play that is working. I will talk about the risks there. We are looking to drill next year at the GVN-1 well, and if that de-risks it has significant oil potential.
Let me share some details on the next slide, which is slide 30, on the GVN-1 well. This is in Block 47. We are looking to drill start spud in Q1 of next year. It is a firm commitment well. It has two dual Cretaceous targets. There is a combined prospective resource which is a gross unrisked number. So 400 million barrels of oil equivalent.
It is a material risk, prospect from that perspective. Overall, the reservoir deposition systems are pretty well-defined based on the 3D seismic data. The key risk here is in the petroleum system. The petroleum system is proven. It is to the basin in the west, but we are stepping about 100 km to the Northeast. That remains kind of the key risk.
Now, the great thing about this is if the petroleum system is working, then it would de-risk a lot of follow-on potential, which is quite big. I do not want to over-egg this thing, but just to give you a sense of the scale of the follow-on potential. There is over 1 billion barrels of gross unrisked recoverable. We are going to be kind of watching this well pretty carefully. We have got significant equity, but for this well, we are exposing only about 36% in interest because we carry.
While it was a firm commitment well, I think we have managed our exposure reasonably well. On slide 31, we can highlight the other position we have here, which is in Guyana. We operate the Orinduik block in the west, and then we are partnered with Repsol, in the Repsol- operated block, which is called Kanuku. That is in the east.
You see this cross-section, and what I am trying to illustrate here is the kind of three plays that are across the acreage. We have got to put a lot of technical focus to better understand all three of these plays. What we are doing is we are integrating the results of the 2019 discoveries and also improving our understanding of the complex petroleum system.
The key here, I think as many of you know, is where is the good oil? How do you control the oil quality in the area? That really comes from understanding the complex petroleum system. We reprocess data in Kanuku. We are reprocessing the data in Orinduik, and all of that will allow us to complete the maturation of that. Remember I showed you that prospect portfolio, kind of like the orange, to define deliverable prospects next year.
The three plays are, you have the Cretaceous turbidite play, which is, I do not know if you can see this, but it is the yellow kind of double-headed arrow. You may remember this is where we found kind of good quality oil in the Carapa discovery there. That was non-commercial. The idea is to say, can you find prospects that are of scale or not?
The two tertiary plays, which again, hopefully you can see on the map is the pink and the gray arrows. There, the focus is in looking at migration timing and barrier history to help us again, understand the areas where there is good quality. The prize here is big. It is, again, talk gross numbers, it is 2 billion barrels of oil equivalent. That is a gross unrisked number.
It makes a lot of sense with that scale for us to focus here. I hope this section gives you a better understanding of how we are leveraging our intellectual capital in Kenya and across kind of these emerging basins. Let me hand you back to I am going to hand you over to Julia, who will talk about our commitment to ESG.
First of all, everyone, thank you for taking the time to join us this morning. Let me introduce myself. I am Julia Ross. I joined Tullow in 2001, and over the last 19 years, I have spent most of my time on the corporate finance side of the business. Over the years, I have also had responsibility for finance, insurance, marketing, and I have worked closely with many of the teams across the business. I joined the senior leadership team in January of this year, bringing an in-depth knowledge of the business and also an understanding of Tullow.
In my role as Director of People and Sustainability, my responsibilities include shared prosperity, net zero strategy, people, culture, and internal communications. One of my current areas of focus is ensuring the organization has the right resources and the performance focus to deliver the strategy that is being outlined today.
We are also working with Partners in Performance to help ensure that we achieve significant cost savings across the business, which Les will outline later. First of all, this morning, I would like to take you through our approach to ESG, being environment, social, and governance. As a responsible operator, we are focused on all elements of ESG.
The publication of our sustainability report and the issuance of our climate policy earlier this year demonstrate our commitment to playing a positive role in society, and that we are responding to the increasing information needs of our stakeholders. On the environmental side, today I am going to focus on the work that we are doing on reducing our greenhouse gas emissions in Ghana. But rest assured, we remain dedicated to being environmentally responsible in all areas of our work.
I wanted to reiterate our support for the goals of the Paris Agreement and the UN Sustainable Development Goals, or SDGs. We focus on the SDGs where we have the most material impact, such as SDG 13 on climate action, with the goal of taking action to tackle climate change and its impacts. Our emissions in Ghana have increased from last year.
This is due to the elevated levels of flaring in 2020, which were required for better reservoir management and sustained production levels. We do recognize that our emissions are too high, and we are working to address this. For example, in our 2020 scorecard, we set a KPI to deliver the net zero plan to reduce our Scope 1 and Scope 2 emissions. That plan is well advanced, and we will be presenting that to the board later this year.
We are also committed to providing the full details of that plan in Q1 of next year. The high-level infographic on this slide shows some of the decarbonization options that we are hoping to benefit from. The biggest opportunity comes from the utilization of the excess gas that we produce, and we are working on a number of those initiatives, not only to abate carbon, but also to deliver energy efficiency, enhance oil recovery, and also to increase the uptime of our assets.
Some of those initiatives are underway. As Wissam mentioned, we are working with the government of Ghana to agree higher gas offtake, and this year we have had record levels of gas export, but we do want to continue to grow that.
In addition, we are evaluating various decarbonization options, which are on this slide, for the FPSO, which include flare and vapor recovery, power generation efficiency, the retrofit and revamp of other equipment. We are also working with our joint venture partners and also the government to align on both gas utilization and the future decarbonization plans. Let me now take you through our approach to the social element of ESG.
Our aim is to create lasting socioeconomic benefits for our host countries. Shared prosperity has been and will continue to be a key part of Tullow's DNA. We have always believed in developing the oil and gas of emerging economies as a privilege, and one where we both have an opportunity and an obligation to share the prosperity with the local communities and economies in which we operate.
We seek to align with our host government priorities and SDG 4 and SDG 8 , which focus on health, education, and community support. Let me take you through our approach to social investment, local content, and how our gas reduction has benefited Ghana more broadly, which is explained on this slide. A key project in our social investment program in Ghana is the Free Senior High School program, a flagship government initiative to provide better access to education.
We have committed more than $10 million to the program over five years. On local content in Ghana, our focus is on building capacity. Our strategy is to concentrate on specific sectors, two of those being the marine logistics and also the aviation sectors.
We supported the development of the first Ghanaian-owned and flied offshore supply vessel, and also the upgrading of the Takoradi Air Force Base, which now has the ability to support national and commercial aviation and the growth of Ghana's offshore petroleum industry, whilst also providing an enhanced operational base for our own activities.
The 200 Bcf of Jubilee Foundation gas, which is supplied to the Ghana National Gas Company, has fueled approximately 25% of Ghana's domestic power generation. Providing more than 6.5 million people with access to electricity, and it also supports the government's strategy of electrification. We have a long-term commitment to Ghana, and we have made a significant contribution. Now let me take you through our approach to governance. As an emerging markets player, we are committed to the highest standards of corporate governance.
We strive for full transparency, both internally and externally, and we look to align with SDG 10, which has the aim of reducing inequalities. We make a significant socioeconomic contribution to our host countries, and over the last five years, we have contributed around $3.4 billion to our host countries and make full transparent disclosure of the beneficiaries, but also the amounts paid through taxes, payments to local suppliers, and also socioeconomic investments.
We were the first oil company to sign up to the Extractive Industries Transparency Initiative, and we have well-established processes and controls to prevent modern slavery in our operations and our supply chain. We run mandatory annual training on our code of ethical conduct for all employees and the board, and we seek to have a leading approach to and disclosure of our ethics and compliance, and we have a zero tolerance to bribery and corruption.
We also encourage speaking up. We have a workforce advisory panel which meets regularly with the board to ensure our communication across the company is open and transparent. To reiterate, as a responsible operator, we will continue to retain our focus on all aspects of ESG. Thank you for your time today. I will now hand over to Les, who will take you through the financial strategy of the company.
Thanks, Julia. Good morning, everyone. It is a real pleasure to be here. Thank you for taking the time to listen to us today. In my section, as Julia just said, I plan to talk about the robust financial framework which underpins the new approach that you have heard from the team today. Many of you will already know me, but here is a brief reminder of my background. I joined Tullow back in 2014 after over 25 years at BP. As you might imagine, I held a variety of roles. These included CFO positions in the Middle East and in Canada.
In Tullow, I was previously Vice President of Finance and Commercial, and then I was appointed CFO back in 2017. In that time, we have worked hard on improving Tullow's financial position. As everyone knows, 2020, this year, has been one very much focused on addressing our current challenges.
As you have seen today, very much planning for the future. It is actually very important to reflect on how much we have achieved this year, despite extremely challenging and very difficult circumstances. Now we have a great opportunity to create and deliver value as we look forward. You have heard from Rahul and other members of the senior leadership team.
My role now is to draw all of this together as we consider the financial management of the company going forward. While clearly there is still more for us to do, we are in a stronger place financially a result of all that hard work. Under the previous strategy, significant priority was given to high risk, but potentially high return opportunities, notably frontier exploration. As you heard from Rahul earlier, under the new approach, we will focus over 90% of our capital on a strong set of producing assets.
These will deliver value and cash flow. The other thing we have been doing this year, while we have been shrinking the size of the organization, we have been very careful to think how we organize it best for the future. One important area is under myself, where we have adopted a much more new integrated approach, with certain teams like commercial now directly reporting into myself.
What this is allowing us to do is to support a much more granular approach to the allocation of capital at the group level, which I think you heard quite clearly from Rahul and Wissam earlier on. This has allowed us, through the work we have done this year so far, to put solid foundations in place to address our debt maturities to further strengthen the company's financial position. Let me first start with slide 37, which is on the external environment.
This is quite a simple chart, really. 2020, as we all know, has been an extremely challenging year globally. It's impacted every single one of us, including our industry. The COVID-19 pandemic continues to create a volatile and challenging trading environment. Brent crude prices, as you can see from the chart, fell to a low of only $13 per barrel on the April 21st.
They averaged only $18 per barrel in the month of April, and only $29 per barrel in the month of May. We also saw during that period earlier in the year, that the differentials for our West African crude blew out by -$9 per barrel. That was all driven, if you might recall, by the concerns about tank trucks driven by the demand destruction that was occurring across the globe, again driven by the pandemic.
While we've seen some modest improvement in price, it does continue to be volatile, and economic recovery remains fragile. That said, we've seen in just the last few days, some real positive news on potential vaccines, and this is helping provide some early, much needed signs of confidence. You will also see on the chart we've got dotted lines reflecting our hedge position. Our hedging continues to provide important downside protection.
Over the last few years, we've delivered post cost around $1 billion worth of revenue. Hedging will continue to be an important risk management tool for the company going forward. You will also see in the chart that we've displayed a series of external forecasts. They're obviously in quite a tight range, but are of course, dynamic. You will see for the financial forecast that we've used here today, we've assumed $45 per barrel for 2021.
As Rahul said earlier, $55 per barrel nominal, 2022 out to 2030. We see that as a conservative assumption in the longer term, but realistic, and also at the bottom end of this external range that you can see on the chart. So now let me turn to slide 38, which covers our financial framework. It's important, as I said at the outset, that our new approach is underpinned by a robust financial framework. In our case, this is made up of three parts.
Firstly, we need to strengthen the balance sheet. Following the Uganda deal, net debt has now been reduced to around $2.4 billion. We will be prioritizing cash flow in the near to medium term to further deleveraging.
We're targeting net debt of $1 billion- $1.5 billion, and aiming for our gearing to be at the lower end of the 1x to 2x range. All that assuming the prices that I've just laid out. Of course, if we see prices recover further, we will be able to get there quicker, which we assume for now is that we should be able to get there in a 2025 year period.
All of this will make us much more resilient to oil price volatility. Secondly, we will also ensure we allocate the capital in a disciplined way. As you've heard, we will focus over 90% of our capital on producing assets. Where again, as you saw earlier, in one of the charts that Rahul used, we have a deep portfolio of good investment opportunities, all of which are resilient to low oil prices.
The quick payback and high returns from these investments will result in the company being effectively self-funded. We will retain flexibility within a lower range than we had previously, with the ability to respond to oil price environments. Thirdly, we'll be focused on value creation. We have laid out today a very clear set of priorities. We will maximize the value from our producing assets and seek to unlock value from Kenya and emerging basins.
But very importantly, we plan to do the latter without entering into any major capital commitments. Now you want me to turn to slide 39 and address our costs base. We have two charts here, one G&A and one OpEx, both of which are showing a downward trend. But in reality, we continue to drive down all of our costs to respond to the challenging external environment.
Our objective has been to make the business much more resilient to lower oil prices and do this on a sustainable basis going forward. We've been working hard, as you heard from Wissam and Rahul earlier, to really instill the mindset of every dollar counts across the company, along with a very strong focus on performance management.
We heard from Julia that we're taking advantage of advisers, and we're also using external benchmarking to challenge our own thinking and identify areas for further cost savings. We're not just satisfied with our current position because we know we can do better. This has meant, though, that we've had to make some very difficult decisions, but these have been very necessary this year. By way of a few examples, we closed our offices in Dublin and Cape Town.
We've outsourced certain finance and supply chain activities, and we've reduced our exploration footprint, as you heard earlier. We now have a much leaner, streamlined organization with headcount reduced by around 60% from the end of 2019. The result of all that work is meaning that we're taking around about $125 million per annum of annual cash cost savings out of the business, worth around $5 per barrel.
As I said earlier, we will continue to pursue further efficiencies. These reductions are substantial, and they're well above the three-year target of $200 million, as you'll recall that we set ourselves earlier this year. Wissam also explained earlier what he's doing to reduce OpEx as we turn to more steady state operations, particularly in Jubilee, after removal of the temporary offloading system and set up that we had as a result of the turret work that's been ongoing in Jubilee.
As a result, at the group level, this should allow us to sustain an average unit OpEx of less than $11 per barrel through to 2025. I'm really pleased with the progress that we've made on costs. Resetting the cost base is vital to make us more resilient to lower oil prices going forward. Now on slide 40, I'm going to cover our capital allocation.
As you've heard from Rahul and Wissam, we have a strong portfolio of producing assets, along with a large discovered resource base in Kenya and significant resource potential in emerging basins. We will invest around $2.7 billion net Tullow over the next 10 years. Going forward, we'll be much more focused on our producing asset base, where as you saw earlier, we have a wealth of high return, fast payback investment opportunities.
This is a departure from the past of when we sought to spread our capital more broadly to progress opportunities right across the portfolio. This is not something that we will be doing going forward. These investment opportunities, as you saw earlier, are also resilient to lower oil prices. What is helpful about that is that gives us extreme confidence to be able to invest.
This will also allow us to maintain flexibility within a lower range than we had previously, around $150 million - $450 million in any one year. If you look at 2020, our forecast for this year is around $290 million, excluding Uganda following the transaction. This is down around 17% from our original guidance of $350 million at the beginning of the year. This underscores our ability to be able to adjust in new capital to be able to respond to the external environment.
Looking forward to 2021, specifically, we expect to spend around $325 million. As you heard earlier, this is part of a shift towards more of our producing assets. That will be about 80% in 2021, rising to over 90% in 2022 and beyond. This will allow us to start implementing the plans that Rahul and Wissam laid out earlier. Our exploration spend in 2021 is primarily driven by existing commitments with the well in Suriname and Argentina Sidetrack.
Looking forward, we will have a disciplined approach. We will focus on low-risk producing assets, and this will allow us to retain a lot of flexibility to be able to respond to the external environment. Now I am going to turn to slide 41, which covers our decommissioning costs. As you are aware, we have ongoing decommissioning activities in Mauritania and the U.K. Southern North Sea.
These total around $500 m illion of exposure, as you can see from the chart. Over the years, we have been optimizing and deferring expenditure wherever possible to respond to the lower oil price environment. We are about two-thirds through the activity set. Over the course of 2020, so by the end of the year, we will have completed the operated activity, which is under Tullow control. The reason for highlighting this is twofold.
One is I wanted to recognize the very good job that the team has done in managing this significant liability, where we have also taken opportunity to optimize the activity set with the other U.K. operators. The other reason I wanted to highlight this is over the next two years, there will still be significant spend, around about $200 million, roughly split evenly, $100 million each per year, which is about $160 million after U.K. fractions.
After that, this will drop off dramatically and will be done effectively by the end of 2025. All future decommissioning costs are included in forecast cash flows with no significant material execution activities expected over the next decade. This is a good progress on our decommissioning and our management of this significant liability.
Now let me turn to slide 42 and what we have been doing this year to deliver proceeds from asset sales. On the November 10th, we received $500 million worth of consideration from closing our deal in Uganda. This was just seven months from announcement of the deal on the April 24th. As you might imagine, we learned a huge amount from the previous lap Uganda transaction, which is something I worked on previously. Most notably, agreeing the tax agreement up front with the government was an important step.
There was excellent collaboration throughout with the government and Total, and we also had strong commitment in the senior-most levels, and this proved to be a key success indeed. Some aspects of the transaction were much more straightforward than before, where there was no preemption by GNPC, which obviously was a simplifying step.
We also reached agreement in the transfer operatorship much, much more quickly than previously. As a result, and including 3Q performance, net debt has been reduced to $2.4 billion in November, with a liquidity headroom of around about $1 billion. We are also looking forward to a $75 million payment when FID is taken, and also this future contingent payment, oil price related, when first oil comes in a few years' time.
Also, very importantly, as you can see on the right of the chart, we have eliminated future capital exposure. We have also had no impact on the borrowing base of the RBL. Having completed Uganda, and in light of the plan that we are presenting today, including the material annual cost savings I talked about earlier, there is now no urgency or a lot less urgency to deliver further asset sales. Having said that, we have continued to receive unsolicited offers for our assets, and we will consider further asset sales provided they do two things.
One is they value accretive, and second, that they continue to strengthen the balance sheet. Finally, on slide 43, let me describe in a little bit what we are doing with this cash flow that we are describing over the next 10 years.
Since early 2017, when I took over as CFO, we have been rigorously and resolutely addressing the significant debt that was on our balance sheet. From just under a peak of $5 billion at the beginning of 2017, we have reduced net debt by around 50%. As a consequence, if you look at annual financing costs from the end of 2016 to now, we have reduced that annual cost by around $100 million per annum. This is significant.
As our debt is reduced, we have also been reducing the size of our facilities. We reduced the RBL facility size from $3.7 billion to $2.5 billion at the refinancing, which is now amortized to just under $2 billion. Also, in 2018, we eliminated the undrawn RCF facility, which at its peak in 2016 was $1 billion. We now have a capital structure which is split about 50/50 between bank debt and bond debt.
With a net debt of about $2.4 billion, as I said, our liquidity headroom of about $1 billion following completion of the Uganda transaction. The plan we have outlined today will deliver around $7 billion of operating cash flow over the next 10 years, with around $4 billion for debt service and shareholder returns. These are significant numbers.
This is split relatively evenly between the next five years to 2025 and the following five years out to 2030. We want to be able to reduce our net debt by a further $1 billion or so to around $1 billion-$1.5 billion. This will bring us well inside of the 1x to 2x range for gearing that we want to operate at. We expect we will be able to reach these by 2025.
But of course, with material potential on upside at higher oil prices, this will allow us to be able to achieve that much quicker and hopefully strengthen the balance sheet much quicker. We have been proactively considering a range of financing options together with our advisers. You heard earlier that we have been using a series of technical advisers.
As we have over time, we have always taken advantage where possible of financial advisers, and that has been no different this year. We have done that in light of our upcoming maturity. We maintain strong relationships with our banks and bondholders with whom we maintain and keep up a regular dialogue. We believe, as you can see from the plan that we laid out, there is sufficient medium and long-term free cash flow to provide a credit runway necessary to address our debt maturities.
However, I do not plan to make specific comment on potential refinancing scenarios today. All of this activity puts us in a very strong position as we look forward into 2021 and beyond. Now let me hand back to Rahul, who will just say a few words to conclude.
Okay. Well, thank you very much, Les. Apologies, guys, because we are running a little bit behind. You can see we have a lot to share, and there is a lot of excitement and enthusiasm, what we are trying to do. But I do hope you found the presentation useful, and you have got a better understanding of how we have unlocked value and deliver cash flows.
Just to conclude, and I am going to keep this kind of simple, but in a sense, I hope you get a sense that the asset base has very significant value, and it is underpinned by a very large and very well understood resource base, which has got material growth options. So that means you can sustain this for some time, right?
The other thing is that with all of the stuff that I talked about, Wissam talked about, Les talked about, we have got a lot of focus on operating efficiencies and costs. What that does is you can make money at low prices. If you have a high-quality investment portfolio and you are very disciplined in how you are spending your money, you are going to be self-funded from a production growth point of view. We can calibrate production.
We can go up. Growth rates can be calibrated based on how much capital you spend. So all that will deliver is very strong cash flows, $7 billion we talked about. That will enable very rapid de-leveraging that Les described.
And if you imagine a very stable and a growing asset base, that means there is material accretion of equity value on that, along with the various levers that I talked about in Kenya and Guyana and all of that stuff. What is critical is along this journey, and this is what Julia talked about, is we will unlock material value for our host countries.
We will positively impact our local communities. That is something that we take a lot of pride in. We will create local content and we will reduce emissions. So I think you agree this is a great place for us to be. It has been challenging, but I think we know what we have to do, and we are well on our way to transforming our business. It is a work in progress, but I think we know what we have to do, and we are making good progress in that.
And importantly, I think just to underscore this, it is not just me, the team, the rest of the organization is deeply committed to achieving success. So look, with that, let us kind of hand over. We are going to look at addressing your questions. The way we will do it is please, again, you have to dial in and you have the conference call number. But as you ask questions, either I will answer them or I will direct to my colleagues, kind of as appropriate. And of course, we will have an opportunity to talk to a lot of you as we go along in the coming days and weeks. So over to you guys. Just look forward to your questions now.
Ladies and gentlemen, we will now begin the question and answer session. As a reminder, if you wish to ask a question, please press star one and wait for your name to be announced. Please stand by while we compile the Q&A queue. This will only take a few moments. If you wish to cancel your request, please press the hash key. Once again, it is star one if you wish to ask a question. Thank you. Your first question comes from the line of Collins May from [inaudible] . To ask your question, your line is now open.
Thanks very much for taking my questions. Two please, if I may. Just first of all, with respect to the balance sheet, on your revised price deck, can you talk about whether you still expect to be in breach of the 3.5x RBL gearing covenant at the end of this year and at the end of June of next year? And similarly, on the liquidity test, is that still likely to be in breach?
So that is the first question. And then the second one is just on Kenya. If I understood it rightly at the interim, you said that the license extension in Kenya, which you talked about in your remarks, was only until December 31, 2021, was the final time that the exploration license could be extended.
It looks as though you're spending really very little money next year on Kenya. I'm just wondering whether it's going to be possible to get to an FID by the end of 2021, or whether it actually requires a further license extension beyond that you would have to build in in order to make that project go. Thank you.
Collins, thanks for your questions. I think let me take the Kenya question and I'll hand over to Les on the balance sheet. I'll do the Kenya first. Basically, we're very well aligned with the government and with our JV partners. We want to try and make this project work and at low prices, right? Think about the work that we're doing next year.
It's a lot more about tying up stuff that we've done in the past. There's been a lot of appraisal work done. There's been a lot of work done on surveying the market and pre-FEED and all sorts of stuff, right? I think what we need to do is to really change our mindset and think about that differently. That doesn't require a lot of money.
We've also changed the approach of even how we are doing that work. That's thematic across the business. I talked about the non-op sort of going from 45 to 15 people. The Kenya stuff we're doing with a very lean team, closely working with our partners. It's less about the money we spend.
Because it's being done collaboratively with the government, which we are trying to get ourselves to FDP by the end of next year. That's the objective. My sense is with the work we're doing and what we do with the government of Kenya in terms of aligning all the commercial agreements and all that, I think we have a fair shot of getting there. That's the answer, Collins, in Kenya. Let me turn over to Les to talk about the value chain.
Thanks, Rahul. Morning, Collins. As you'll recall, we've held two RBL redeterminations already this year. We did one in March. We did one back in September. At September, we had full support from the banks, and we came out, as you'll recall, with the revised $1.8 billion of borrowing base. At the same time, we requested, and we had approved, a revision to the year-end gearing.
That's now all in place. While, yes, we will exceed that at the end of the year, we've now got, if you like, some leeway on that. We don't expect that to be a breach at the end of the year. We also went through with a positive response on the test that you referred to. If you look forward, we will be having our January redetermination. It's premature to step forward into that place.
But other than to say that what our track record has been, has been when there's been any potential breaches on year-end, this is something which we don't take for granted, but we've had support from the banks. And we've also laid out today in the business plan a runway on future cash flows, which will help us deal with the forthcoming debt maturities.
And that's something I'm not going to get into in detail today, but we will be following up on that course through the Capital Markets Day. So everything resolved in the recent RBL determination, and we've got another one coming up in January. We're going to share with the banks in more detail what we've just described to everyone today.
Thank you.
Thank you. Your next question comes from the line of Michael Alsford from Citi. Please ask your question. Your line is now open.
Thanks. Good morning. For the presentation, it was very helpful. And I guess it's very clear that you're focusing on maximizing value from the core production assets. One thing that jumped out when I looked at slide 13, when you talk about your operating cost guidance for TEN, operating costs do move up significantly per barrel to $11.50 from around $8.30 in 2020.
Which would imply, therefore, that a pretty steep production decline into 2021 because of the actual absolute costs look pretty flat. So could perhaps you talk a little bit about what's going on at TEN? Why the steep production decline, or am I missing something? And secondly, just if you could give us some sensitivity on cash flow or EBITDA or free cash flow to oil price.
I know there's a chart in the slide deck, but when you look at it, the sensitivity to oil price looks a little bit lower than what you've historically talked about. If you can give us a $5 move oil price sensitivity to your plan, that'll be helpful. Thank you.
Okay. Michael, I'll address the production decline, and I'll then turn to Les to address the EBITDA sensitivity. I'll also give you my sense of the operating margins. That's smart, Michael. You're focusing on the right questions. I think it's very simple, guys. These fields, Jubilee, TEN, any of them are not our portfolio. They're great resources.
But you need to invest to drive production growth. Simplistically, we just haven't invested in these. Jubilee, like I said, the last well we drilled was in mid of July of 2019. I think in TEN we just did one well this year. The key for us is as we look forward and look to agree a well schedule with our partners, redesign a drilling program, there will be a decline for 2021, for sure.
That's just a consequence of the fact that we don't have the well stock there. But what is important, I think the key message is that one is that decline is going to more than offset by the savings that we have. I just want to give you, Michael, a sense. Our 2020, this is my numbers. I look at after-tax operating margins, right? Let me just go forward.
The 10-year number, we had $7 billion of operating cash flows, right? You divide that by we produced 260 million barrels of oil over the 10-year period. That's about a $27 a barrel after-tax operating margin. That's pretty healthy. That's at 55. If you take next year at 45, and I just simplistically take $10 off, so that's call it $17.
That's about 50% higher than our operating margin for this year, right? Why is that? That's because of all the cost savings. I think when we're looking at this business, we're saying, "Well, how do we make money? How do I deliver cash flow? How do I create value?" It's that combination of production and cost and all that.
I think next year, because it's a transition year, we're going to recover from our CapEx spend. But what is going to really helping us is that we can more than offset it from the cash flow savings that we have. That's the story on the production decline. The other point I think Wissam said in his comments, and I don't know if you picked it up, but we're doing a lot of work in terms of operating costs.
I think we've done a lot on Jubilee. I think TEN, the team needs to really look at TEN from a longer-term perspective and say what structural changes can we make on the costs. I think expect more on that in the coming years, but we don't have visibility on that yet, so we can't give you guidance. I hope that answers the production question, and maybe give you a sense of what I call sort of- I look at sort of after-tax operating cash flow margins, I guess, is that. Les, do you want to add more to it for Michael?
No, I think at this stage, it's probably premature to get into talking about EBITDA. We've laid out today a little bit. The way you describe, I think, Rahul, is accurate. We're laying out a future which has got a bit of a range to it on future production potential. I think the way to see it gives you a good idea of the operating margin and the cash flow potential from the business. When we come towards 2021, we will be able to describe in a bit more detail what exactly will be the numbers for 2021. We'll describe that then, Michael, I would say.
Okay. Thanks. And for the detail, thanks, Rahul and Les. Just to give a quick follow-up, though. On that slide, in the 43, when you go source of the use of cash, it looks like $7 billion at $55. If you look at the shaded area, it gets to about $8.5 billion at 65. Divide that simply by 10, that's a sort of a $150 million move for a $10 move in the oil price. As I say, it looks low relative to history, but I guess we'll go with that for now. Thanks.
Yeah.
Okay.
Your next question comes from the line of David Round from BMO Capital Markets. Please ask your question. The line is now open.
Great. Thanks for the presentation. I just had a couple of questions. The first was on slide six, and really just a question around the fact that it looks like you could maybe do half of the projects identified are below $500 million and probably two-thirds are below $1 billion. Can you give us any sense or any indication of the scale of the resource associated with the highest return project?
I suppose another way of asking is, if you only spent $1 billion, would the contributions be meaningful enough for you? One for Les, again, apologies. Follow up again on the redetermination coming up in January. I appreciate you don't know how that will play out, but what's the art of the possible there? Is a good outcome just to maintain the borrowing base, or could we also see some big changes to the amortization schedule? Is that something that requires a larger refinancing?
I think that's a good question, and I figured as at the moment we put these things, you guys will want to get more kind of granularity and detail. But the thing is, if you look at particularly the opportunities that Wissam described in his presentation, I would say a lot of the material ones, you take, well, firstly, all of the infill ones are very, very high return, right?
But then if you take something like Jubilee Southeast, which is a very critical project, and I'm going to take a contract approval on that to my board next week. That's one which kind of opens up, if you remember on Wissam's slide, I'm just kind of pulling that up. It's slide 18, right? So the whole eastern section of Jubilee, that's Jubilee Southeast and Northeast. That opens up once we do the Jubilee Southeast project.
The way we've designed it now is it's a very high return project because you put in the manifold and you follow that up with a series of kind of infill programs. When you look at that chart on slide, which is this? Slide six, I think. No. Yeah, slide six. What you will have in this is pretty much all the big resource ones I think are going to be in a pretty decent return.
What they do is, like the Jubilee Southeast, let's say, is a high return project infrastructure piece of it, but then the infill numbers that come after that become even higher returns because their margin returns are much higher. I think the point that Les mentioned, which is that it's a very scalable capital program. If we have a year of low prices, we'll scale it down.
If you have higher prices than we expect, and if Les is happy with the rate of debt pay down, we can scale that up so we can drive production growth much higher. Because they're quick turnaround and quick paybacks, you see the effect straight away.
Okay. Maybe just quickly just to follow up on that. What does the risk profile look like with these new opportunities? Obviously, there were some issues at TEN with some of the wells you've drilled recently. Do these come with higher risks?
No. I think what we've done is a lot of work in terms of this is just an assessment, but then we've gone out to working with external advisors to kind of challenge and validate that stuff. There's been very good cooperation with our partners. I think it's quite well understood. What we are doing is, so there is a lot of investment opportunities, right? What we've tried to focus on this slide is the 60 that are well-defined and they're de-risked, right? There's others in the hopper, which we haven't included here, which haven't been de-risked. The ones that we have here, we feel pretty good about these.
But there are others, and what will happen is there will be a process which is, and again, I go back to what Wissam covered in some of the projects that he talked about, which are the upside, which are not included in this profile. Those we need work to do to de-risk those.
Rahul, maybe I can just touch on the question that was asked about borrowing base.
Yes.
Our objective when we get into January, as you know, under these processes with the banks, they tend to take a conservative approach. So the objective by asking for January was that we knew we were going to be laying out today the future potential of the business, and really our objective in January is to make sure that as a minimum, we maintain our current position to actually being able to describe to the banks in much more detail, and I've been working very collaboratively with Wissam and his team, as you might imagine, as to how we best describe that to the banks.
And we're already in action in preparation for that event. So that's really our objective here, is to be able to lay out in some good detail. Also working with our external reserves auditor in the same fashion. That's really the plan here as we go into January, is to lay all of that out rather than wait until March, which would be our normal timing for the redetermination.
It is a change in perspective, right? Once the banks understand what we are talking about, which means that this is a massive resource which has the ability to replenish and sustain, at least this is what I have been spoken to senior people in the banking group. I have said, "Look, that is the mindset shift that their technical people need to understand." I think that is the conversation we are looking forward to having.
Okay, great. Thanks a lot.
Thank you. Your next question comes from the line of Nick Cooper from [inaudible]. Please ask your question. Your line is now open.
Good morning. Thanks very much for the presentation. Couple of questions from me, if that is okay. So first one, I just wondered if you could talk a little bit about how many wells you expect to drill next year in Ghana, and how much incremental production and 2P you expect those to deliver. Then the second question is on Kenya. Is your current view that you would need to farm down from the current 5% working interest in order to sanction that project? Thank you.
I think the next year, drilling question, I think we are in discussions with our partners. We will go through the kind of budgeting process, the sequencing and things like that. If you kind of start mid-year, we should at least get a couple of wells in. But it is hard for us to predict that just now. My request to you would be, we will have the budgets done, I think at our trading statement in January. We will give you a more explicit guidance on that. But naturally kind of given the assets that we know are investable, we are keen to get going on that. But Wissam is working through that actively as we speak.
But again, just to give you kind of just real kind of comfort, and maybe this is more than you need to know, but as I said earlier, I am taking a kind of contract award for Jubilee South East to our board next week. I am taking an award for a contract to the board next week. We are getting on with this thing. I think in terms of the Kenya, look, I think we have to do this in steps, right?
The first thing we need to do is just better define the project and see if it is making it work. I talked about the details of some of the things that we are looking to do. I think then we would really need to figure out kind of what is Once the project is investable, then we figure out what is the best way forward for us is.
But it is probably not right for me to speculate on that just now. I think, my focus, the team's focus, Madhu and all these guys, we are just trying to make sure, let us get the project working. Then, if it is good, I am sure you will get people to invest, but if it is not, you will not. I think I would hold off on sort of commenting on the farm down for now.
Okay. Thanks very much.
Thank you. Your next question comes from the line of James Hosie from Barclays. Please ask your question. Your line is now open.
Hi. Good morning, and thank you for the presentation. Can I ask just about the dependency of the new strategy on the oil price outlook? You mentioned sort of the potential to accelerate activity if you have a higher oil price environment. But just looking the other direction, at what oil price is your capacity to invest then constrained and the medium term production outlook you have on slide seven then going to decline below the sort of bottom end of that range?
I think as Les outlined, we think we have the range is somewhere between sort of $150 million to kind of $300 million, let us say. Almost like $150 million- $450 million, right? From a CapEx point of view. I will give you kind of two or three sort of building blocks so you guys understand this. That is the range, right? And we think the midpoint of that is about kind of $300 million.
And I would say roughly 70% of that would probably be in Ghana, right? So that is one kind of just kind of scope of dimensions. Second thing you think about is that if you look at Jubilee this year, so it has declined from, I think a peak in February was about 90,000 bpd , and it is about 80 today, right?
Let us say over a year, it has declined sort of 12,000 bpd . That is about the IP of one well. In fact, it is higher than one well, right? My point is that if you have an active drilling program, right, then you can drop your sort of completions sort of to lower levels to sustain production because these wells are prolific. So if you get one or two wells a year, you are able to stem decline.
In my mind, I think we are going to be running at least one rig all the time. And there is a question to say, would you accelerate to two rigs depending on the oil price or not? If you follow the disciplined capital allocation that Les talked about, I think you would stop a lot of other things before you would stop drilling in Ghana.
Okay. Thank you. Can I just ask a second question then on hedging? Because obviously, historically, Tullow has been quite consistent with hedging strategy. Is that going to continue as it has before, or is there going to be a change in approach?
It's a good question. Let me pass that on to Les, please.
Hey. Hi, James. Completely consistent approach. You can see we've got the bit of detail on the bottom left-hand of the chart. You won't be surprised that we're almost there for 2021. I think we're 54%. 2022 is just a little bit slower. The reason for that is because of the low oil prices that we saw in the first half of the year that we expect to build that out through 2021. So no change. We don't second guess the oil price. We plan as best as we can, and hedging is a really important risk management tool.
Okay. Thank you. Very good.
All right. I know there's a lot of questions, and we took a little bit longer, so if it's okay with you guys, we'll carry on for another 10 minutes. I expect, I think, we won't be able to go through all your questions. But look, Chris and Matt, we're going to reach out to make sure we're engaging with everybody. We want to make sure you guys all understand what we're trying to do. So operator, please carry on.
Thank you. Your next question comes from the line of Al Stanton from RBC. Please ask your question. Your line is now open.
Yes. Good morning. Can I ask three questions, all linked? First of all, the $2.7 billion, I was wondering if you could give us a breakdown of that, either by geography or by asset. I suppose I'm pretty interested to know whether exploration is included in that. It's a bit hard and certain whether that is actually other investment or actually included.
Then in terms of lining up the spending with the reserves and the resources, Tullow in the past has been very good at highlighting its reserves and resources and being perhaps less clear on its spending. So slide 17 suggests that Jubilee, in the past two years, has grown from a 690 million barrel field to a 738 million barrel field, whereas TEN has shrunk from 349 to 223.
I'm wondering if all of that we're ignoring gas and whether gas is included or excluded from your production guidance and your reserve guidance. Also, I suppose, in your CapEx guidance. If you're going to commercialize the gas, should we be adding that to the production stream and coming up with additional CapEx?
Okay. Firstly, Al, the $2.7 billion includes exploration. The bulk of it, the investment is in productive assets. I think it also includes, from memory, about $400 million for decommissioning. If you remember Les' chart, I think that chart from memory had about $300 million, $280 million or so, which is associated with the U.K. and Mauritania stuff in the coming years.
What he also said in his presentation is that what we are doing is we are taking cash provisions in Ghana. Roughly, I would say, of the $2.7 billion, you have to take out the $400 odd million for those spend, which is depreciation related. The bulk of it then is in Ghana and is in the West Africa portfolio. This is my approximation, so do not hold me to this, Al.
I think it is roughly about 70%, I think is in Ghana. The rest is in the West Africa portfolio. From an exploration perspective, what we are doing really right now is just saying, "Look, what is committed?" The view is that we were going to look at what we have and then figure out what is the right kind of capital allocation in that going forward.
That is the capital allocation plan. I think in terms of the production, we do not include. Wissam talked about the gas commercialization stuff, right? That is not included in these production numbers. That is not included in the CapEx. The way we have approached this plan is very simple. It is saying, here is the defined projects. What is the kind of reserves associated with that, and then what is the production associated with that?
The upsides that Wissam talked about, gas commercialization and all that is not part of this. Neither from a capital point of view nor from a production point of view. I think from your question on reserves. Roughly, we have the 650 or so, which is the 2P/ 2C in my slide. I would say that is probably broken down to about 120 of that is in the non-op, and then probably 530 is between Jubilee and TEN.
I suppose on the last question, slide 17 shows a different portray of what companies used to show as a pie chart. You have 85. Okay, fair enough. I will leave it with that, even. Okay thank you.
Okay, thanks Al.
Thank you. Your next question comes from the line of Chris Wheaton from Stifel. Please ask your question, your line is now open.
Brilliant. Thank you very much indeed for the presentation this morning. Two questions, if I may. Firstly, follow up on Al's question on slide six. There's $2.7 billion of CapEx identified in your statement. Slide six shows $1.7 billion. You just identified $400 million of decom, and there's a bit of exploration, which I'm assuming is going to be committed at the moment to no more than $100 million. There's still $500 million left. Could you please explain what that $500 million is?
Then second question to both Julia and you, Rahul. Governance issues at Tullow Oil is one of the reasons why Tullow Oil got to where it is today. Could you talk about the culture change you've put into the business since you joined in July, please, Rahul? Because I think that's really important. Talk about perhaps changes to performance management, reporting, culture, all those things, what you've changed since you've joined.
Okay. So roughly, like I said, it is about kind of 400 is decom. I think I probably misspoke. So total spend, so $2.7, sorry, Al, apologies. The $2.7 doesn't include decom. So decom is on top of that. So that is about 400. So roughly the spend that we have on what we call sort of production and development, is roughly kind of $2.6.
What you have in the project portfolio is all the kind of defined projects. Then what we have in addition to this is what we call some kind of NFA CapEx associated. Wissam talked about things like, you have got kind of shutdowns, you have got some capacity expansions, which are not part of these. So what you have in these are in essence kind of projects that are associated with production, right?
That is what we call NFA, so the facilities expansion. Then in addition to that, we have some spend on exploration, which is really kind of what the committed spend is. Then at the back end of the period, we have some CapEx spend, which is sort of more, I would say, less defined. So that is not quite in the project, in the screening period yet. So that is the kind of breakdown, I would say.
Great. Thank you. My question on governance.
Oh, sorry. Yes. Look, I think the big thing here, right? And I will have Julia sort of comment on this as well. Number one, we have got complete support from the board to make this transformation, right? That is number one. Number two is, you are trying to create a culture.
There are two or three big different things. One is where there is a real commitment to building kind of an operating business, which means you heard Wissam talk about every barrel matters, every dollar matters, right? There is a whole focus on kind of cost. But then also Julia talked about this idea of kind of transparency and kind of have a non-hierarchical system. And look, some of that comes with our own behavior, some of that comes with our kind of operating style.
Having a culture where people own the business, but then also are not afraid to speak up, I think that's two ways. That's one coming from the organization, but it also kind of then falls on kind of my head and Les' head and Wissam and all the guys to say, are we really getting people to put forward dissenting views? Because the view to be a successful operator in our business, I don't have all the answers.
But you want to make sure the people at the coal face are able to say what they have to say. There's an open transparency around that. We are really working hard on that. There is a lot of communication in the organization. And despite COVID and despite remote working and all that stuff, I think that's together really well. That's my perspective, but Julia, you may want to comment further on this.
Yeah. Chris, maybe just building on what Rahul said, I mean, for me, the really important thing is that open communication. I think the reductions in the organization this year, there are a lot less of us, then we've reduced the layers to make sure that top-down and the bottom-up, in particular, communication lines are open. And for example, we run with the senior leadership team coffee mornings across the business, and we've done that actually, I think Rahul started doing it before he joined officially in July.
And that's really led to Rahul meeting, I think the majority of staff across Tullow in all locations. That's one of the real drives. And we are also working with Partners in Performance to really look at the performance culture and drive a performance culture, making people take ownership and real accountability and responsibility for the areas of the business. It'll take time, but we are really driving for that change.
Look, I think the key is, you could see kind of the numbers and you can see the reserves and you could see the kind of projects and all of that stuff. But at the heart of it's kind of the mindset and it's the kind of ownership. What's amazed me is, I've been here, whatever, a little under five months, or maybe two more prior to that. I've pretty much spoken to everybody in the company. But you see this huge enthusiasm and kind of drive, and frankly, that gives me the confidence when I stand up in front of you guys and say, "Look, we'll make this work.
Right. Thank you very much indeed.
Thank you. Your last question comes from the line of Mark Wilson from Jefferies. Please ask your question. Your line is now open.
Thank you very much. My question regarding the Jubilee facilities, FPSO obviously is a key piece of equipment in all this. Since Wissam talked to water injection getting up to 300,000 bpd and gas export 250 million cubic feet a day. Do you have that capacity on the FPSO today, or would that require additional investment? Also, could you just let us know what is the capacity of Ghana to take gas as Julia said she's going to, the flaring worries?
I will give you a quick thing, and then Wissam can give you more color. I think if you saw on his slide, he talked about capacity expansions at Jubilee on both water injection getting to 300 and for the gas process. I think those capacity expansions are planned, but he can talk more about that. What we are assuming in the plan, if you will, is today we are exporting 135 million standard cubic feet a day.
We do not see in the plan what we have defined is going to need anything more than that. As Wissam talked about, I think that is in the market today. One is the government is, or GNGC is taking that. Number two is, this is the best gas from a government's perspective, right? Because we have the foundation gas, which is free.
Subsequent gas is, I think, we would be the cheapest gas supplier in the country by a long margin. It obviously supports the oil. It has associated liquids, which drive all of the LNG, the LPG stuff. So it kind of sits very favorably on the cost and value curve from the government's perspective. What we have not factored in is the upside from the non-associated gas and stuff. Maybe, Wissam, you want to just talk more about both of those.
Yeah. Thanks, Mark, for the question. I will just address it specifically on the two things you asked about, so gas and water. Let us take water first. Most of our investment right now is on improving the reliability and capacity of our water injection system. So there has been investment in 2020. That has yielded positive results, and we have gotten ourselves up to being able to inject above that 200,000 barrels of water a day mark. We are now finishing work to get that sustainably up there.
Then further investments required, which will happen next year, to get us above those numbers you see closer towards the 300,000 barrels of water a day mark. So the short answer is the capacity will come with the additional investment, and a lot of that has been achieved this year, with more to follow next year.
Your question on gas, there is, as I mentioned in my talk, de-bottlenecking required to get up to the numbers we want on Jubilee. So we have done some of that this year. It has allowed us to demonstrate reliability and capacity to the government of Ghana. They have reciprocated that with greater gas take, as I said, getting us up to 130 million standard cubic feet of gas take.
Most of that has been from Jubilee. Our plan now is to de-bottleneck facilities further over the coming years to get up over that 250 million standard cubic feet mark gradually, that I mentioned on slide 12. The capacity of the market, just today, our main customer, the government of Ghana, through GNPC, the national gas company, take over 300 million standard cubic feet of gas. That is just today.
That capacity is forecast to grow even further with their prospects over the next, particularly two to three years, to numbers where the 250 million we've noted is comfortably within that space. Our goal over the next year is to occupy even more of that 300 million existing right now. As Rahul said, our gas is most competitive on cost and comes with additional oil to the government, so it makes it very attractive. Then as they grow their capacity over the next two years, we follow suit, and fit in with even more gas export.
Right. Okay
Okay. If I can ask one follow-up to Les, please. That'd be very good. You said you're not going to speak to debt maturities, which I completely understand. But I'd like to ask, does the business plan that you've just submitted have you maintaining that $500 million liquidity through the end of 2022, given the debt maturities? Thank you.
Okay, Les, I'll hand over to you on that. Les.
Yes. I laid out in the framework, Mark, the importance of maintaining adequate headroom. I mean, that's something which we've maintained that position for a while. That's something that we will keep under constant review. I mean, we are drawing in our sort of capital profile. If you remember, we had a kind of $200 million - $600 million range.
We're saying $150 million - $400 million. And we will maintain appropriate headroom for our future sort of spending profile. So I think as we go through the course of next year, we'll also address what's an appropriate level of headroom. As we sit here today, $500 million feels appropriate. We're sitting actually with about $1 billion of headroom today, which puts us a good place actually as we go into addressing our debt maturities going into 2021.
I don't plan to talk about the detail of that today. But as you might imagine, we've been talking to banks, bondholders, as we do regularly, and that's something we'll be doing as we follow up towards the capital markets thing.
Okay. Well, look, thanks again, everybody, and I apologize to those whose questions we've been unable to answer. But really on behalf of my team here at Tullow Oil, we thank you guys for your interest, for your participation. I hope you have a better understanding of what we're trying to do. We're working hard on this, so I hope you get a better sense of what we're trying to do. We will have a chance to talk to many of you in the coming days and weeks.
And of course, you can always reach out to our IR guys if you have questions, and we'll try and make sure that you have a good understanding of this plan. But thank you again, and all the best, everyone, and stay safe. Bye.