Growth and opportunity in GhanaJanuary 9, 2020
Hon. John Peter Amewu, Ghana's minister of energy, talks to TOGY about the growth of Ghana’s upstream sector, the government’s plans to develop an oil and gas hub in the country’s Western Region and the investment and partnership opportunities these new projects are creating for both international and local companies.
How attractive is Ghana’s oil and gas industry?
Given the number and calibre of the companies that expressed interest in our maiden oil and gas licensing round, it suffices to say that Ghana’s oil and gas industry is attractive and promising. The continual interest from international oil companies regarding oil and gas exploration and production in Ghana, even after the deadline for expressions of interest, further supports this assessment.
As a way of rewarding the efforts of companies that believe in Ghana, we have enacted laws, such as Act 919 [the Petroleum (Exploration and Production) Act 2016], and other policies that will deepen transparency and ensure fairness in the awarding of oil and gas blocks. These activities are aimed at boosting investor confidence in our oil and gas industry.
What developments have shaped Ghana’s oil and gas industry over the past three years?
Act 919 and its subsidiary regulations, L.I. 2359, were enacted to govern oil and gas exploration and production in Ghana. In fulfilment of this new law, we successfully organised Ghana’s first oil and gas licensing round in 2018, and the government has embarked on a series of efforts to improve the data coverage of our sedimentary basins to increase their productivity and boost investor confidence.
Two fields, the TEN and Sankofa-Gye-Nyame fields, came on stream within the last three years as well. The Takoradi section of the Takoradi-Tema Interconnection Pipeline [TTIP] project has also been commissioned to enable the reverse flow of gas from west to east, and gas is being transported from Takoradi to Tema through the West African Gas Pipeline [WAGP]. To mop up any stranded gas in the west, the Karpowership Osman Khan has been relocated there to consume up to 90 mcf [2.5 mcm] per day.
We also secured a favourable ITLOS [International Tribunal on the Law of the Sea] ruling on the maritime boundary dispute with Côte d’Ivoire, and subsequent bilateral talks by a Joint Ghana-Cote d’Ivoire ITLOS implementation committee ensured a smooth implementation of the ruling. Similar bilateral talks have been initiated by the governments of Ghana and the Togolese Republic to ensure the speedy and smooth resolution of the eastern maritime boundary.
What is your view on Ghana’s gas potential?
Estimates from the three producing fields and the Pecan field indicate Ghana has gas reserves in excess of 2.21 tcf [62.7 bcm]. This is thought to be enough to support Ghana’s needs in the short and long terms. Existing infrastructure is undergoing improvements to increase capacity to deliver gas resources from the west to gas markets across the country. We also believe that a lot of gas resources exist in the unexplored areas in our sedimentary basins, especially our inland Voltaian Basin, which in the long run will be made available for domestic consumption and export.
What investment and PPP opportunities would you like to highlight?
In the upstream sector, there are opportunities along the entire value chain for acquisition of concessions for exploration and production activities, farm-in for active offshore concessions, Voltaian Basin enhancement projects, provision of goods and services, upstream infrastructure development, air transportation, anchor handling boats and diving vessels, real estate, telecommunications, banking, insurance, search and rescue, and consultancy services.
The biggest opportunity in the upstream sector is the petroleum hub, the establishment of which requires the development of infrastructure such as refineries, port terminal facilities and storage facilities as well as petrochemical and LNG terminals with a network of pipelines.
Other key infrastructure requirements include the construction of jetties, hub transmission infrastructure, power plants, petrochemical plants and a lube blending plant, together with transmission and storage infrastructure to link the neighbouring land-locked countries.
The project will also require the construction of infrastructure to provide support services for offshore activities including nautical services, repair and maintenance facilities, exploration and rig equipment servicing, and off-dock yard and dry-dock facilities for repair of vessels, engineering and decommissioning.
Furthermore, ancillary infrastructure requirements for the development of the hub include water treatment facilities, a waste management centre, a laboratory and a light to medium industrial area. This is in addition to the provision of social amenities including health and educational facilities, a security and emergency response facility, and residential and commercial facilities, among others.
What is your assessment of Ghana’s first-ever bid round?
A substantial number of reputable companies, including super-majors, majors and independent oil companies, expressed interest in our blocks during our maiden licensing round. This is an indication that our oil and gas industry is becoming attractive. It being our first time, we encountered some challenges and have learned some lessons from the experience. However, the licensing process went as planned and was transparent.
What are the prospects for new bid rounds in the Keta and Voltaian basins?
Our plans for the Keta Basin include multi-client data acquisition and prospect evaluation before blocks are demarcated for licensing. The government is also on the verge of signing an agreement with a seismic company to carry out a 3D multi-client seismic survey in the Keta Basin. With the availability of quality data in this basin, we hope to attract as many reputable companies as possible in our next licensing round.
For the Voltaian Basin, 2D-seismic data has recently been acquired, and analyses so far have indicated that the basin is prospective. Further work is required in this basin before it can be opened up for licensing.
What kind of infrastructure does Ghana have in place to support the oil and gas industry?
Ghana has three producing fields, each supported by an FPSO. Additionally, we have a fairly developed offshore pipeline network connecting the fields and transporting gas to onshore facilities such as the Atuabo Gas Processing Plant and the Aboadze Thermal Plant.
As for pipelines, the TTIP and the Ghanaian portion of the WAGP are operational, while negotiations for the Ghana-Côte d’Ivoire Gas Pipeline and discussions on the construction of a dedicated Takoradi-Tema onshore gas pipeline are underway.
How many petroleum agreements do you have in place?
There are 19 petroleum agreements in the country [as of December 2019], of which 15 are still in the exploration stage, three are producing and one is at the pre-development stage and expected to be on-stream soon.
Could you walk us through Ghana’s ambition and potential to become a petroleum hub for West Africa?
The establishment of a petroleum and petrochemicals hub in the country is part of the government’s strategic development initiative aimed at promoting socioeconomic growth. The central location of the country, political and macroeconomic stability, access to the regional market and proximity to international shipping routes all make Ghana ideal. The government is already acquiring land in the Western Region for the development of the hub.
The project involves the establishment of major infrastructure for refining and processing petrochemicals in addition to the discharge, storage, distribution, transportation and trading of petroleum products. It will also increase the presence of major international companies while encouraging public-private partnerships and joint ventures, which will invariably result in knowledge transfer and wealth creation.