The risk factor associated with oil exploration in Ghana is getting lesser by the day, thanks to the announcement of more oil discoveries in the country in recent times.
A total of 19 oil discoveries have been made since 2007 with the latest successful appraisal announcement by the Italian oil firm Eni being a booster.
The Public Relations Officer at the Ministry of Energy, Edward Bawa, told The Business Analyst in an interview on Monday that the increasing number of oil discoveries in the country means that the risk factors in exploring oil in the country is getting lower and the advantage being that “We can now strengthen our negotiation value as a nation. It affords us the opportunity to negotiate better terms,” he stated.
The country’s stake-holding in blocks currently hovers around 10% to 15% but Mr. Bawa said now the country can increase that to 20% when negotiating new terms. He said the new discoveries also means government’s assets as well as its revenue sources are increasing.
“Anytime a new discovery is announced, government’s potential source of revenue increases. This obviously will catapult our move from lower middle income to upper middle income,” Bawa emphasized.
Last weekend, Eni, announced its successfully appraisal of the Sankofa East discovery offshore Ghana. The company estimates the overall potential of the discovery to be around 450 million barrels of oil in place with recoverable resources of up to 150 million barrels.
Eni successfully drilled Sankofa East 2A, the first appraisal well of the Sankofa East supervises the bringing on-stream oil discovery in the Offshore Cape Three Points (OCTP) block, located in the Tano Basin offshore Ghana, around 50 kilometers off the coast.
“The result is important because it confirms the commercial standing of the oil discovery in the OTCP block and the strategic importance of the block for further industrial and economic development in the country,” a release from the company stated.
It said Sankofa East 2A has been drilled 8 kilometers south west of the discovery well Sankofa East X1 and confirmed the extension of the oil accumulation in the Cenomanian sequence. The data acquisition confirmed the hydraulic communication in the oil prone reservoir between the discovery and the appraisal well.
Sankofa East 2A well, which reached a total depth of 4,050 meters, was drilled in 990 meters of water. The well encountered 23 meters of gas and condensate gross pay (17 meters net), and 76 meters of gross oil pay (30° API, 32 meters net) in good sands of cretaceous age.
Eni has immediately commenced plans for the commercial exploitation of the oil reserves. There are also ongoing engineering studies for the development and commercialization of the gas reserves of the block in accordance with the principles sanctioned in the Memorandum of Understanding (MoU) recently signed by Eni, Vitol and Ghana National Petroleum Corporation (GNPC) with the Ministry of Energy of Ghana.
The MoU focuses particularly on the domestic gas market, in which Eni and its joint venture partners aim to play a prominent role.
Eni estimates overall recoverable resources in the OCTP block of approximately 450 million barrels of oil equivalent including gas, associated liquids and oil.
Eni, through its subsidiary Eni Ghana Exploration and Production Limited, is the operator of the OCTP block with a 47.222% share. Other partners are Vitol Upstream Ghana Limited, with a 37.778% share, and state company GNPC with a 15% share. GNPC has an option for an additional 5% share. Eni has been operating in Ghana since 2009 and currently operates two exploration offshore blocks OCTP and Keta.
Eni has been present in Sub Saharan Africa since the 1960s and currently participates in exploration and production projects in Angola, Congo, Ghana, Gabon, Mozambique, Nigeria, Democratic Republic of Congo, Togo, Kenya and Liberia. With rapid successful growth in exploration activity, Eni’s current operated production in the region is approximately 450,000 barrels of oil equivalent per day.
Source: The Business Analyst, Wednesday 23rd January, 2013.