Ghana says it has signed US$6 billion agreement with Italian oil company, ENI Exploration, for the production of oil and gas offshore the west of the country.
An official statement in Accra on Monday said the Government negotiating team made up of officials of the Ministry of Energy and Petroleum, Ministry of Finance, Ghana National Petroleum Cooperation (GNPC) and ENI Exploration, operators of the offshore Cape Three Points (OCTP) block had concluded negotiations to open way for ENI to commence production of oil and gas.
“The $6 billion OCTP (Sankofa Project) is expected to start commercial production of oil and gas by mid-2017 to augment the country’s current production capacity. The next stage of the agreement will be the approval of Plan of Development and ratification of the approval by Parliament,” the statement issued by the Ministry of Energy and Petroleum said.
It quoted the Minister of Energy and Petroleum, Emmanuel Kofi Buah and Minister of Finance, Seth Terkper, who led the Ghana negotiating team, as expressing their relief at the conclusion of the negotiations with ENI/Vitol, which took over one year, noting that it had put Ghana “on the path to energy security as there will be more gas to fuel generating plants”.
“This negotiation has thought Ghana a lesson of the urgent need to strengthen the balance sheet of the country’s energy institution to enable them to borrow on the international market. It will also reduce the investment risk that has been a major hurdle in this negotiation”.
The statement said the negotiations put Ghana on the path of addressing one of the critical constraints to power generation, which is clean fuel source.
“This project promises to deliver up to 170 million cubic feet of gas per day for the next 20 years and put Ghana on its way to a future where one of the critical constraints to power generation (cheaper fuel) will be addressed.”
It said the start of commercial gas production would also require the construction of a 3rd Floating Production Storage and Offloading (FPSO) unit to produce at a maximum 170 million cubic feet of gas in addition to the 120 million cubic feet from the Jubilee Fields and 50 million cubic feet from the Tweneboah Enyeara and Ntomme (TEN) projects.
ENI and Vitol will focus on domestic gas markets where they are expected to play a prominent role.
ENI has been operating in Ghana since 2009 and currently operates two exploration-offshore blocks – the Offshore Cape Three Points in the west and Keta in the east.