When you think of the top oil and gas nations in Africa, Ghana is not one that traditionally comes to mind, but it is one of the rising stars. In the past, Ghana has been one of the smaller oil and gas producers on the continent but that production is expected to grow rapidly over the next five years.

The organisation charged with developing the West African nations’ hydrocarbon assets is the national oil company, Ghana National Petroleum Corporation (GNPC). The rise in Ghana’s production is expected to come from the growth of existing offshore fields such as Twenboa-Enyenra-Ntomme (TEN) and Offshore Cape Three Points (OCTP).

First oil flowed from the Tullow operated TEN fields offshore Ghana to the FPSO Professor John Evans Atta Mills in August 2016. OCTP is an integrated deepwater project in Ghana split into two stages: the development of first oil, then gas deposits operated by Eni Ghana. OCTP is around 60km from Ghana’s western coast and boasts approximately 40bn m3 of non-associated gas reserves and 500m barrels of oil.

Mohammed Amin Adam, Ghana’s Deputy Minister of Energy in charge of petroleum, is confident that the country’s energy sector is on the brink of something big. He says the country can expand oil production from 180,000–-200,000bl/d now to 500,000bl/d within six years, and is targeting up to 1mn bl/d beyond that.

“If we want to sustain or increase production, we will have to be very aggressive in exploration,” Dr. Amin Adam said in a press statement isssued by Africa Oil Week.

The average production for TEN field in 2017 was 56,000 b/d whilst production for the OCTP field is expected to peak this year at 45,000 b/d. In addition to the two established fields there are other developments that are moving ahead rapidly such as the Teak, Akasa and Mahogany East discoveries where test wells have indicated sizeable reserves.

Another major scheme is the Ghana 1000, a multi-phase greenfield gas-to-power project located near Takoradi in the western regions of Ghana. This will consist of approximately 1,300MW of combined cycle power generation technology once fully built and will support Ghana’s burgeoning domestic natural gas industry by purchasing natural gas from the Sankofa gas field, part of the OCTP field. A subsea pipeline will link a Floating Storage and Regasification Unit (FSRU) to onshore facilities which will then supply the project. It’s expected that the FSRU will start up sometime in 2020.

Ghana completed its first oil and gas licencing round earlier this year with two of the five blocks on offer being awarded. First Exploration and Petroleum Development, in partnership with Elandel Energy (Ghana) emerged as winners of block WB02 while Eni Ghana and Vitol Upstream Tano claimed block WB03. Block WB03 is located in the medium-deep waters of the prolific Tano Basin, offshore Ghana. Following the success of this round, a second licensing round is being planned.

Sharing the talent

Throughout the oil and gas industry, collaboration is the name of the game and that is no different in Ghana. GNPC recently signed a memorandum of understanding (MoU) to share expertise with three of its neighbours, Sierra Leone, Gambia and Liberia. “We believe that we need to share experience from other countries as a way of improving what we do,” the chief executive of the GNPC, Dr Kofi Kodua Sarpong, said. “Our organization has been there for nearly four decades and we have the expertise, we can export talent, so we are looking at all these opportunities. In fact, I can say that our brothers and sisters in other countries are knocking on our doors for advice and that is precisely what we want.”

Ensuring local benefit from oil boom

The development of these assets means that it is important that Ghana, in common with many other African nations, ensures that local workers and industry benefit from increased oil and gas activity. “There is a recognised need to develop local capacity in all aspects of the oil and gas value chain through education, skills, and expertise development, transfer of technology and know-how and promote an active research and development regime through collaborative efforts locally and internationally,” Dr Kofi Koduah Sarpong, said.

In Ghana in recent years, attention has been focused on the need to have a portion of locally produced materials, personnel, financing, goods and services rendered to the oil and gas industry with measurable monetary impact. “In tandem with this goal is the pursuit of local content participation, which refers to the level of Ghanaian equity ownership in the oil and gas industry,” Sarpong added. “Ghanaian-owned businesses in the energy sector must be encouraged to increase their participation in this emerging and growing sector. This, surely, will be a more sustainable way of realigning the sector to the needs of the country in terms of employment creation and economic growth whilst reducing the impact of capital flight on the economy.”

Ghana’s oil and gas industry continues to attract key global industry players on the back of sustained investor interest, due largely to the favourable investment climate and stable democracy. “The potential of the sector to be a driver for Ghana’s desired economic growth is evident,” Sarpong concluded. “But I hold the view that true benefits of the oil and gas sector and ultimately economic growth can be obtained only when Ghanaians capture a respectable level of value from the sector. For a country pushing for self-dependency; a Ghana beyond aid, this noble call is not misplaced, and the time to act is now.”

Ghana at Africa Oil Week

Reflecting its growing importance, Ghana will be well represented at Africa Oil Week with a triumvirate of high-profile speakers in Benjamin Kwame Asante, director of petroleum at the Ministry of Energy, Mr. Egbert Faibille Jnr., petroleum commissioner at Ghana Petroleum Commission and the Hon John-Peter Amewu, minister for energy.

Source: www.energynewsafrica.com

A former Minister of Power in the Republic of Ghana, Dr. Kwabena Donkor wants the Akufo-Addo administration to abrogate the concession agreement the Electricity Company of Ghana (ECG) signed with the Power Distribution Services (PDS).

According to him, the government must not hesitate to terminate the deal for proper distribution of power to parts of the country because it has already failed to honour parts of the conditions for the agreement.

“You don’t go into a bid, set up condition precedents and consciously violate the principles underlying the tender and think it is closure. The basis of the contract has been destabilized. I sincerely believe that we should give the concession agreement to the original owner to manage.”

“What should be happening is that we should have the courage of conviction to terminate the contract which should not even exist in law. This is because we have breached the conditions precedent. It is a condition for termination. They should cease to be PDS and the contract taken away from them and then we decide whether we still want the concession option or private sector participation”, Dr. Kwabena Donkor, who is also the MP for Pru East said on Accra –based Citi FM.

The government suspended the PDS deal over what it termed as fundamental and structural breaches in the demand guarantees covering the agreement.

It is, however, yet to take a firm decision on the future of the controversial deal despite the release of some reports from the teams that probed the saga.

The government on July 30, 2019 announced the suspension of the contract with PDS, barely six months after the company took over from ECG.

The suspension order on the PDS agreement was due to what government called material breaches in the provision of the demand guarantees by PDS, which were key prerequisites for the turnover of the assets and facilities.

Government said PDS failed in its obligation of payment securities for the transaction which was discovered upon further due diligence.

A leaked report from a probe by FTI Consulting, a United States-based consulting firm, commissioned by the Millennium Development Authority (MiDA) into the allegations, said there was no evidence to suggest any of the entities involved in the deal conspired to defraud the state.

This report indicated that PDS duly won the contract to manage the assets of the Electricity Company of Ghana (ECG) and said insurance guarantees were paid to back PDS’ takeover of the assets and operations of the ECG.

But the government insisted that the report was misleading and advised, “everybody to just tarry whilst it [the full report] is all put together in the various parties.”

PDS is a consortium between Manila Electric (Meralco) of The Philippines, 30%, Aenergia SA (Angola), 19%; Santa Baron Ventures Ghana, 13%, TG Energy Solution Ghana, 18%, GTS Engineering Ghana Limited, 10%, and TBK Ghana Limited, 10%.

— EnergyNewsAfrica.com 

The Bui Power Authority (BPA), one of the state power generation companies in the Republic of Ghana, has signed a Memorandum of Understanding (MoU) with the University of Ghana, Legon, to provide a 2.5 megawatts (MW) solar farm for the premier university.

Per the MOU, the BPA would have access to the project site, which is covering about 10 acres, to conduct feasibility studies on the project within a period of one month.

The MoU covers the scope of work, design, implementation plan and financing.

Apart from generating electricity, which will be tied to the national interconnected transmission system, the project will also serve as a research center for the university.

The CEO of the BPA, Mr Fred Oware, signed for the authority while the Pro-Vice-Chancellor, Office of Research Innovation and Development, Professor Francis Dodoo, signed for the university.

In an interview with energynewsafrica.com, CEO of BPA, Mr Oware said the MoU was a product of more than a year of engagement with the university on the solar project.

“We should have signed this MOU long time ago, but we our attention was on the Tsatsadu project. Thankfully, we have completed that project that’s why we’re here today,” he said.

He said a lot of studies had been done behind the scenes on the project, which would turn around the energy situation in the university.

“If we pass the feasibility stage and we get authorisation from you, we will be happy to complete possibly less than a year’s time,” he said.

Touching on the benefits of the project, Mr Oware explained that the development of the solar farm would help to reduce the cost of electricity at the university.

He was optimistic that engineering students at the university would also have a direct training in Solar Power installation

“Once we finish it, the university will also benefit from our students’ partnership, which we have had over the years.

“There will be no expatriate in the team,” he added.

He said the authority would work with the Engineering Department of the university for students to gain practical experience.

When asked how much the project would cost, Mr Oware said the cost would be determined when the feasibility studies were concluded

For his part, Professor Dodoo described as fruitful the partnership with the BPA on the project, which included the use of windmills for power generation.

He said the project, when completed, would significantly reduce the university’s power woes.

“The Vice-chancellor sees this as an opportunity for our scientists, scholars and students to latch on,” he said.

The Dean of the University’s College of Engineering Sciences, Professor Boateng Onwona-Agyeman, also said the project, when completed, would significantly reduce power consumption by the university.

Source: www.energynewsafrica.com

Ghana’s Deputy Minister for Energy in charge of Petroleum, Dr Mohammed Amin Adam is confident that the West African nation’s energy sector is on the brink of expanding its oil production from 180,000–-200,000bl/d now to 500,000bl/d within six years.

Additionally, the country is targeting up to 1mn bl/d beyond that.

“If we want to sustain or increase production, we will have to be very aggressive in exploration,” Dr Amin Adam said this at the 3rd Africa Oil &Gas Local Content Sustainability Conference in Accra.

The average production for TEN field in 2017 was 56,000 b/d while production for the OCTP field is expected to peak this year at 45,000 b/d.

In addition to the two established fields, there are other developments that are moving ahead rapidly such as the Teak, Akasa and Mahogany East discoveries where test wells have indicated sizeable reserves.

Another major scheme is the Ghana 1000, a multi-phase greenfield gas-to-power project located near Takoradi in the Western Region of Ghana.

This will consist of approximately 1,300MW of combined cycle power generation technology once fully built and will support Ghana’s burgeoning domestic natural gas industry by purchasing natural gas from the Sankofa gas field, part of the OCTP field.

A subsea pipeline will link a Floating Storage and Regasification Unit (FSRU) to onshore facilities which will then supply the project.

It is expected that the FSRU will start in 2020.

Ghana completed its first oil and gas licensing round earlier this year with two of the five blocks on offer being awarded.

First Exploration and Petroleum Development, in partnership with Elandel Energy (Ghana), emerged as winners of block WB-02 while Eni Ghana and Vitol Upstream Tano claimed block WB-03.

Block WB-03 is located in the medium deep waters of the prolific Tano Basin, offshore Ghana. Following the success of this round, a second licensing round is being planned.

Source: www.energynewsafrica.com

Puma Energy, a global integrated mid and downstream energy company with a local focus, has launched global road safety campaign dubbed: #BePumaSafe.

This campaign is to sensitize its staff, stakeholders, and esteemed customers across the country about road and site safety is on the theme: “Be Safe, Stay Alert, Don’t Speed, Buckle Up, Drive Smart, Don’t Smoke, Stay Sober and Take A Break”.

The key area of focus was still to raise awareness about road safety and help influence, shape and change behaviour within our communities.

–

Source: Myjoyonline.com

The LPG Marketing Companies Association of Ghana has appealed to the Akufo-Addo government to remove what it described as “nuisance taxes” on Liquefied Petroleum Gas (LPG).

According to the Vice Chairman of the Association, Mr Gabriel Kumi, such action will encourage more people to patronize the product and bring respite to “the masses.”

“We humbly invite…Ghanaians in general to urgently appeal to Government to remove all the nuisance taxes on LPG to free up demand and consumption of the product. Taxes on LPG are great nuisance to the consumption of the product,” Mr. Kumi said.

He made the call at the Brong Ahafo Regional forum on Cylinder Recirculation Model (CRM) held in Sunyani last week. The event was organised by the National Petroleum Authority (NPA).

The NPA is holding forums in the various regions ahead of the full implementation of the Cylinder Recirculation Model introduced by government.

The Cylinder Recirculation Model is the implementation model for the National LPG Policy, and it is aimed at providing direction for marketing and distribution of LPG in a safe and efficient manner, so as to facilitate an increase in access to LPG nationwide.

Mr. Kumi at the forum argued that LPG is not a luxury product that government must impose a huge tax on.

“We wish to remind Government that LPG is not a luxury product. It’s indeed a product for the masses with an elastic demand. This simply means that it is impossible to achieve an increment in demand and consumption by increasing taxes which ends up pushing the pump price of the product.”

According to Mr. Kumi, the increase in taxes of LPG is greatly affecting the end consumer.

He advised government to subsidize the price of LPG as done in the past to increase demand and consumption.

“…Rather, you lower the prices, attract more people into the consumption net, so you can increase demand and consumption which will finally move government towards achieving its objective of increasing LPG access, consumption and penetration from the current 25% to 50% by the year 2030,” he added.

The Vice Chairman, also asked for a continuous, open and honest engagement with the regulators to address the current and anticipated challenges that CRM poses explaining that the sector is one of the few remaining sectors of Ghana’s economy which is 100% local content, thus they will not tolerate any policy which has loopholes to sneak in foreigners.

“We shall not tolerate any policy which has loopholes to sneak in foreigners since any attempt to introduce additional players, especially at the initial stage of the implementation when demand and consumption has not reason taken off, in the value chain will only increase the cost of doing business which would eventually hurt the industry,” he said.

—citinewsroom

Government has cleared $300 million of outstanding legacy debt to Bulk Oil Distribution Companies (BDCs) between 2017 and June 2019 with a total of $49.77 million outstanding debt expected to be paid by end of 2019.

These were contained in the 2018 Industry Report of the Chamber of Bulk Oil Distributors (CBOD).

This brings to total an amount of $930 million in subsidies incurred by government through its subsidy policy between 2012 and now.

The outstanding claims at year end 2018 comprised Real Value Factor (RVF) and Forex Loss Under Recoveries Interest (FLURI) claims.

Real Value Factor refers to the financial cost (interest) incurred by BDCs for the delayed payments of price under-recoveries.

Forex Loss Under Recoveries Interest on the other hand, refers to the financial cost borne by BDCs for the delayed payment of Forex Loss Under Recovery (FLUR) by government.

According to the report, Legacy Bonds Limited, assignee of the BDC claims, negotiated and finalised the parameters/terms for establishing the FLURI and RVF claims with government.

Payment of validated claims in June 2019, government through the Ministry of Finance (MoF) issued 10 year ESLA bond of GH₵648.93mn to fully settle the validated RVF claims and partially settle the FLURI claims.

The Energy Sector Levies Act, 2015 (Act 899) as amended (Act 946), was passed into law in 2015, mainly to address the huge debt burden and operational challenges facing State Owned Enterprises (SOEs) in the Energy Sector, support power generation and power supply sustainability, subsidise premix and stabilise petroleum prices, support road maintenance, as well as fund the activities of the Energy Commission.

The Act applied the levies on the price per litre (ppl) /price per kilogram (ppkg) of petroleum, and the price per kilowatt hour (ppkWh) of electricity.

The Government took the ESLA Bill to Parliament to raise funds to pay energy-sector SOEs debt, notably for VRA.

It is also to minimize the non-performing loan (NPL) impact of such debt on domestic and foreign banks as well as suppliers.

Further, it is to improve the Balance Sheet of the SOEs to enable them play their envisaged future roles in an oil-and-gas era.

These roles include stable power supply and, in particular, meeting their financial obligations to banks and independent power producers (IPPs) under the World Bank Partial Risk Guarantee (PRG).

The petroleum levies, on the other hand, have been utilised, through E.S.L.A. Plc, to significantly reduce the liabilities of Energy Sector SOEs to keep them running and viable.

Most of the energy bonds issued so far have been bought by banks in Ghana since the receipts are used by ESLA to pay off the debts being owed them.

This enables the banks to replace those non-performing loans with performing investments in bonds and thus frees them from having to make loan loss provisions.

The ESLA account at the end of 2018, recorded a closing balance of GH₵615.42 million.

E.S.L.A. Plc had issued bonds with a face value of GH₵5.6 billion (GH₵5,664.72 million) as at December 2018, as part of the Government’s plan to refinance Energy Sector debts.

The issuance of the bonds resulted in the reduction of State Owned Enterprise (SOE) debts to its creditors by approximately GH₵5.4 billion (GH₵5,453.20 million) as at end 2018.

Total transfers from the ESLA Accounts towards the servicing of the ESLA bonds amounted to GH¢1.3 billion (GH¢1,353.71 million).

The 2018 Annual Report on the Management of the Energy Sector Levies and Accounts, indicates that for 2019, a total of GH₵3, 947.82 million has been targeted for collection under the Energy Sector Levy Act, (ESLA) representing an increase over 2018 collections of GH₵440.78 million, and 12.6 percent higher than the targeted amount for last year of GH₵3,507.04 million.

—citinewsroom

Representatives from the Queen Mothers’ Foundation of Ghana paid a courtesy call to the Ghana Chamber of Bulk Oil Distributors.

The visit was to seek the expertise of Mr. Senyo Hosi, the Chief Executive Officer, on social development to help the Queen Mothers’ foundation to achieve its set goal and objectives.

The delegates also extended an invitation to Mr. Senyo Hosi to be a patron of the Queen Mothers Foundation in Ghana.

The foundation has undertaken many developmental programmes and projects with support from donors. 

The foundation which was established in 1999, seeks to bring all Paramount, Divisional and Traditional Queen Mothers under one umbrella to foster unity and promote development.

Source: CBOD News

The Chamber of Bulk Oil Distributors (CBOD) has commended government for the payment of legacy debts to the Bulk Distribution Companies (BDCs).

In a statement in its industry report launched yesterday, there was progress made on government’s legacy debt to BDCs, with the payment of all outstanding principal sums (US$427.11mn) and validation of the interest components.

According to the report, this brings the total an amount of US$806.25 million in subsidies incurred by government through its subsidy policy between 2011 and 2015.

The report read: “A total of US$929.58million has been paid between 2011 and September 2019, with a total of US$52.62million outstanding and expected to be paid by year end 2019. The total haircut accepted by BDCs amounts to US$432m.”

Supported by the African Centre for Energy Policy (ACEP), the report also talks about steps taken by the National Petroleum Authority (NPA) to address fuel smuggling in the downstream petroleum sector. 

On the issue of LPG policy intervention, the report projects disruption in the LPG market structure. It anticipates the likelihood of upward pressure on pre-tax prices of LPG and disruptions in the marketing and retailing structure of the LPG industry. It also projects significant disruptions in the retail market structure for LPG.

“The LPG Marketing Companies’ (LPGMCs) dominance of the market (62% share) is expected to be threatened by the more consumer-friendly Oil Marketing Companies (OMCs) (38% share), which are generally more accessible by virtue of their location and significantly out-number the LPG outlets by a ratio of about 5:1.”

Other key issues highlighted in the report are fuel quality policy; licence rationalization; Health, Safety, Security and Environment policy; Ghanaian Content and Ghanaian participation policy.

Again, the report calls on LPGMCs to invest in consumer-friendly outlets which are likely to improve their businesses.

“It may be necessary that LPGMCs swiftly invest in multiple consumer-friendly outlets – like self-service propane outlets in the US which are operated at supermarkets, and develop a delivery-to-consumer option to stand a fighting chance of maintaining their market share.”

Also, it revealed that GH¢952 million was saved from blocking the sale of illicit sale of petroleum products in the country in 2018.  This was a reversal from the losses made in the last three years – 2015 to 2017- through unaccounted stock and evasion of taxes.

The savings, according to the report, was as a result of interventions by the National Petroleum Authority (NPA) to curb the illicit trade of petroleum products and ensure that it was sold through official channels, the annual report of the Chamber of Bulk Oil Distributors (CBOD) has said.

“In 2018, no loss related to unaccounted stocks is estimated as it was revealed that 574.25 million litres more than the official stocks saleable in the country were sold. This indicates that smuggled stocks in the monitored depots must have been trapped as a result of the NPA’s regulatory interventions to curb the illicit trade of petroleum products and forced to be sold through official channels.

“This saved the nation GH¢797.49 million in taxes and GH¢154.93 million in regulatory margins yielding a total savings of GH¢952.42 million,” the report stated.

According to the report, the NPA, aided by elements of the central government made progress towards tackling the challenges of smuggling and tax evasion some of which were covered in the 2017 CBOD industry report.

“This was a welcome move in the industry and yielded tangible results even though there remains a lot to be done to bring sustainable finality to the illegal trade,” the report stated.

Source: B&FT Online

The Chief Executive Officer of the Chamber of Bulk Oil Distribution Companies (CBOD), Mr Senyo Hosi, has blamed the largely poor state of state-owned enterprises (SoEs) on the extension of partisanship into the management of the firms, and that the situation will worsen if politics is not separated from state businesses.

He has, therefore, called for a paradigm shift in the management of SoEs devoid of political interference.

Get Digital Versions of Graphic Publications by downloading Graphic NewsPlus Here. Also available in the Google Play Store and Apple App Store

He said there was too much politics influencing commercial decisions in SoEs in the petroleum downstream sector, citing the Tema Oil Refinery (TOR) and the Bulk Oil Storage and Transportation Company (BOST) as examples.

Speaking at the launch of its 2018 industry report in Accra, Mr Hosi said although TOR remained a viable entity that needed to be revamped, it was important to clearly halt the political interferences.

“There is a problem with the way we manage some of our SOEs, and we need to be very careful. It is our advice that government should stay in the business of policy and let the private sector and the regulator drive industry. I think that helps us as a country from our learnings from TOR and BOST,” he said.

Mr Hosi said the country needed to have some refining activity as it produced a lot of crude but the refining business was a serious one that needed to be carried out as such.

“We are not going to have a functional TOR with political influence. It is a business and it needs the orientation of a commercial entity. Some of the problems include the politics and the interferences in some of the commercial decisions that are made at TOR,” he said.

Mr Hosi noted that it was important to leverage TOR as a refinery trigger for the petroleum hub concept as it would minimise the investment risk.

He said the value proposition to investors should be well established to help to de-risk investment considerations.

“In pursuit of this, it is advised that recommendations in the report for increasing storage asset utilisation through the positioning of Ghana as a redistribution hub be favourably considered.

Source: Graphic Online