Over a few decades ago, Africa has been a destination for major international oil companies (IOCs), and East Africa dominates with huge development in oil and gas infrastructure. However, Ghana has emerged as an alternative destination for oil.
“The country is looking for ways to diversify their portfolio of assets… [although] the East African powerhouse [including] Kenya, Uganda, Rwanda, Burundi and Tanzania have since seen massive development in their oil and gas infrastructure”.Africa Oil Week
Tullow Oil, one of the earliest companies in Ghana’s upstream sector, recently announced its ‘Value Maximization Plan’. The company’s intention is to invest over US$4 billion over the next decade to deliver over 50 wells and consistent revenue to Tullow and the Government of Ghana.
In April 2021, Tullow began a multi-year, multi-well drilling campaign, and will drill four wells in total in 2021. This consists of two Jubilee production wells, one Jubilee water injector well, and one TEN gas injector well. The J56 production well came on stream in July 2021 and is slightly ahead of pre-drill expectations.
Recently, it was reported that the Italian oil and gas company Eni has made a significant oil find offshore Ghana, which would allow it to fast-track production in the region. This adds to another successful discovery at Akoma in May 2019, with the two wells predicted to contain between 500 and 700 million barrels of oil equivalent.
Also, Heritage Oil is doubling down on their investment in the country, with the acquisition of interest in both the Offshore South West Tano Block and the East Keta Block. The company has indicated plans to secure a partner to drill two exploration wells offshore Ghana, targeting the extraction of more than 400 million barrels of oil in the area.
Impact of Energy Transition on Ghana’s Oil and Gas Market
This notwithstanding, Ghana’s burgeoning oil and gas market is not immune from external pressures. “A shift in focus for oil majors from fossil fuels to renewable energy in recent years has seen some abandon their assets in Ghana altogether.”
For example, ExxonMobil exited the country without drilling a single well. China, as well as other strong investor in African infrastructure programs, have begun looking elsewhere.
“Where there is uncertainty, there is also opportunity”. The Ministry of Energy is seeking parliamentary approval to borrow as much as $1.65 billion to accelerate oil and gas exploration by acquiring and developing stranded assets, with the hope to incorporate these assets into the Ghana National Petroleum Corp’s (GNPC) portfolio.
In the mid-year budget reading, Ghana’s Finance Minister, Ken Ofori-Atta noted that legal amendments may be required to allow GNPC enter into reserve-based lending transactions.
Some Details on the Africa Oil Week Event
The Africa Oil Week notes that a panel of speakers will be discussing how the energy transition will impact the national economic growth of traditional hydrocarbon producers at Africa Oil Week and will include esteemed guests such as Hon. Matthew Opoku Prempeh, Minister of Energy for Ghana.
Also, the renewed pressure put on fossil-fuel dependent African governments to improve their fiscal and regulatory terms and explore new industries or policies to diversify their economies, will be considered.
“This includes fiscal policies such as tax incentives, oil subsidies, investor protection and price setting mechanisms; navigating the risk of stranded assets; transparency initiatives and stakeholder dialogue; and flexibility and resilience to respond to fluctuating market conditions and operating environments.”Africa Oil Week
Egbert Faibille Jnr., CEO at the Ghana Petroleum Commission, and Dr. K.K. Sarpong, CEO at Ghana National Petroleum Corporation, will also be joining the Ghanaian delegation and presenting a dedicated showcase on Ghana’s upstream prospectivity.
The event is expected to take off from November 8-11, to be held at Madinat Jumeirah in Dubai.