Having become an oil-producing country since the end of 2010, Ghana is seeking to increase its domestic production by the end of 2018. To achieve this goal, a whole series of measures have been going on for a few months: from the granting of new exploration licenses to the establishment of a legal framework that can govern the oil sector, the country is launching an offensive in the sector.
Blamé Ekoué, Accra
Though oil remains Ghana’s main source of foreign exchange, the authorities are planning to increase offshore exploration to take advantage of the country’s deposit extraction. To this end, an offensive has been launched in recent months to discover other oil fields in order to increase domestic production from 2018. For Dr. Mohammed Amin Adam, Deputy Minister of Energy in charge of oil, the offensive known as the “Aggressive Exploration Campaign” aims to preserve downstream reserves on the one hand and maintain upstream production in the oil and gas sector. “When we joined the government, we realized that in the future we would not be viable in the oil and gas industry because we are not making new discoveries of deposits. However, we are exploiting the reserves discovered for a long time and that could exhaust them without being able to replace them,” he explained. According to the Ministry of Energy, annual production should reach 242.3 million barrels in 2018, against 39.1 million in 2015 following all measures taken. Gas production should reach 16 billion m3. It should be noted that the increase in oil production should dampen the shock of the fall in low prices in the world market. The Jubilee offshore field is the first place of production. The reserves would be between 800 million and 1.2 billion barrels, of which 1/5th would have been extracted at the end of 2016.
The rush of large gas and oil companies to Ghana
The new administration established for a year is working hard to attract large oil and gas companies such as Exxonmobil, the world’s largest oil and petrochemical company. Indeed, the American oil giant has just acquired an exploration license in Ghana last January. According to Dr. Mohammed Amin Adam, Deputy Minister of Energy in charge of oil, the new strategy of oil exploration will attract to Ghana large multinationals that have already proved their worth in this sector. “One of the goals pursued through this accelerated offensive is to do business with large multinationals which have a lot of experience and success in the industry. As you already knew, we managed to convince Exxonmobil, the largest oil company in the world, to come to Ghana,” he said. The oil giant, which will hold 80% of the exploitation rights, will start exploration in 2018 on the Abyssal block Cape Three Points Deepwater Block. The country also signed, in September 2017, a contract described as historic by Nana Akuffo Addo, the Ghanaian president, with Gazprom for the supply of liquefied gas. “We signed an agreement with Gazprom to come to Ghana to supply us liquefied gas. We are targeting large companies that have the money, the technology and a good reputation to help us in our quest to find new deposits,” said Minister Mohammed Amin Adam. Some experts have welcomed Gazprom, whose expertise will enable Ghana to successfully exploit its gas fields already exploited since the inauguration in 2014 of Atuabo’s gas production unit. Already, onshore seismic research in the Volta Basin by the Ghana National Petroleum Corporation (GNPC), as part of its 2015-2019 five-year exploration program, suggests a significant discovery of deposit. And the Ghanaian president is pleased. “It’s good to wait for the directive to start generating spinoffs. According to the Ghana National Petroleum Corporation, the results of its pilot study in the Volta Basin show the presence of oil. I hope, eventually, that there will be something great to celebrate,” he said in a speech to the nation on December 31st. Already with the start of exploitation of the TEN fields (Tweneboa, Enyenra and Ntomme), in the Tano Basin, closer to the border with the Ivory Coast which could bring up to 165 billion dollars, Ghana is slated to become one of the oil giants in sub-Saharan Africa from 2020 with an estimated 245 million barrel reserves of this deposit, and a potential of 2.4 million m3 per day.
The Italian ENI, Vitol, Kosmos, Anadarko, Petrol SA and the GNPC are also planning to develop the Sankofa and Gye Nyame fields located in the Cape Three Point Offshore Block, following an agreement signed in 2015.
Measures that raise concerns elsewhere
In its quest for new oil and gas fields, the Ghanaian authorities are planning to also implement the first tender ever launched in the country’s public procurement history with a focus on competitiveness to grant new oil blocks to deserving and relevant companies. According to the Ministry of Energy, this measure will allow to be selective in granting licenses to companies wishing to operate in the oil sector in Ghana. However, this measure raises many concerns with the civil society which sees behind the intention of the authorities to use a mutual agreement contract. The Institute of Economic Affairs (IEA), a Ghanaian think tank, will be the first to call for more transparency in the awarding and licensing of exploration and exploitation. In addition to the measure, some analysts also criticize generous tax breaks recently granted to Exxonmobil while awarding a contract to it last January. But, we remain confident with the authorities that all the new measures will rather increase the revenues from the sector. The report of the first half of 2017 by the Central Bank of Ghana (BoG) reveals that the country has achieved an increase in income from oil extraction. Actually, these revenues reached $ 191.32 million US for the first half of 2017 compared to $ 114.4 million US for the same period in 2016. The central bank of Ghana sees the increase in revenues in the start of exploitation of the TEN fields since August 2016.