Monday, 26 March 2018

Gov’t to pursue aggressive oil production

Image result for Boakye Agyarko

Adnan Adams Mohammed

Mr Boakye Agyarko, the Minister of Energy, has said government’s policy for the upstream oil industry was to undertake aggressive exploration by incorporating and attracting the right partners to conduct operations to serve as a catalyst for economic growth.

This has informed government’s decision to opt for direct negotiations with ExxonMobil as opposed to an open competitive tender since most oil firms have challenges operating in water depths between 2,000 and 4,000 metres.

The ExxonMobil agreement has been described by energy experts as worse deal ever since Ghana started oil production 10 years ago.
But, he defended that, the government signed an oil exploration contract with the ExxonMobil Company to explore for oil in the Deeper water Cape Three Points Oilfields because it has the capacity to deliver.

“That informed government’s decision to opt for direct negotiations with ExxonMobil as opposed to an open competitive tender since most oil firms have challenges operating in water depths between 2,000 and 4,000 metres.

‘‘The direct negotiations was the best way to go considering that there are just a few oil companies in the world that have the wherewithal, in terms of equipment and financing, to undertake such ultra-deep-water exploration,’’ the Minister explained.

Mr Agyarko made the remarks at the Sixth Edition of the Ghana Economic Outlook and Business Strategy Conference in Accra, last week, on the theme: ‘’10 years of Oil and Gas: ‘‘Challenges and Prospects’’.

The minister said, Ghana still has a large and relatively unexplored sedimentary basin with huge oil and gas potential. Out of the total offshore area of about 256,000 square km, only 30 percent is licensed for exploration.

But to do this, Agyarko said it was necessary to reposition the national oil Company, the Ghana National Petroleum Corporation (GNPC), with a core mandate, either as an explorer or an asset manager.

Alex Mould, immediate past Chief Executive of the GNPC, challenged that the role of GNPC was not in dispute as the law setting them up was clear on their mandate.

"GNPC is the only entity allowed in this country to explore for oil, which means when any IOC wants to explore for oil in Ghana, they have to do it in association with GNPC where they are GNPC's contractors," Mould said.

The forum was organised by the Africa Business Media Network, publishers of the Ghana Business and Finance Magazine, which brought together industry players, including regulators, service providers, operators, civil society organisations and government officials.

The event was intended to offer a platform for stakeholders in the oil and gas industry to deliberate on the successes, challenges and prospects of the sector and chart the way forward.

Again, Mr Agyarko noted that the agreement with ExxonMobil would offer Ghana an opportunity to accelerate exploration activity with the view to making more discoveries and increasing the reserve replacement rate.

‘‘We will continue to develop mechanisms that will enable us to attract partners of this calibre into the country to further de-risk the ultra-deep water potential and benefit from cutting-edge technology,’’ he assured.

In the deal, ExxonMobil holds 80 per cent interest, while the Ghana National Petroleum Corporation holds a 15 per cent carried interest, and the remaining five per cent would be assigned by ExxonMobil to a local partner of their choice.

Currently there are 17 active exploration and production agreements signed between the Government of Ghana and other international and local oil firms to explore petroleum resources.

Mr Agyarko said his outfit was working towards the completion of the tie-in of the Ghana Gas pipeline and the West African Pipeline and associated modification works at both Regulation and Metering Stations (R&M) in Takoradi and Tema.

Dr Yaw Osei Akoto, the Board Chairman of the Africa Business Media, in his welcome address, said the forum was playing a significant role in the national discourse in the economic development of the nation.

He said it provided a platform for constructive interaction between government officials, players in the oil and gas industry, regulators and civil society organisations and believed the event would go a long way to better the economic fortunes of the nation.