Monday, 16 September

Aker oil find: IMANI goofed; lacks knowledge in oil sector – Amewu

Business
The Minister of Energy, John Peter Amewu, has said policy think tank IMANI Africa goofed when it created the impression through its press conference on Thursday, 25 April 2019 that Ghana stood to lose about $30 billion in the Aker Energy oil find if the Plan of Development and Operations (PoD) provided by the Operator of the Deepwater Tano / Cape Three Points (DWT/CTP) oil block offshore Ghana on behalf of its partners, Ghana National Petroleum Corporation (GNPC), Lukoil Overseas Ghana Tano Limited and Fueltrade Limited, if the PoD is allowed to stand as presented.

IMANI challenged what it said were various acts of omissions on the part of the government of Ghana in respect to PDO.

However, Energy Minister John Peter Amewu, at a news briefing in Accra described the claims by IMANI as total falsehoods.

In providing some background information on the agreement, Mr Amewu said the Petroleum Agreement (PA) covering the DWT/CTP contract area operated by Aker Energy was executed on 8th February 2006 between the Government of Ghana – GNPC, AMERADA HESS Corporation, Lukoil and Fueltrade subsequently farmed in 2015.

He disclosed that Fueltrade’s participating interest was set at 2% for which it paid about USD$9 million with a performance guarantee of USD$2 million.

“The contract area has 7 discoveries namely pecan north, almond, cob, beech, pecan, paradise and hickory north. The first five are oil discoveries while paradise and hickory north are gas discoveries. Aker Energy acquired the interest of AMERADA HESS Ghana Limited in February 2018 and proceeded to continue the unfinished works under the programme of appraisal to HESS” he added.

IS GHANA LOSING $30 BILLION?

Mr Amewu criticised IMANI for misinforming Ghanaians on a potential loss of $30 billion to the country if the government failed to negotiate a new petroleum agreement.

“IMANI tried to alarm Ghanaians about a potential loss of $30 billion to the country if the government failed to negotiate a new petroleum agreement with new terms with the DWT/CTP partners. This is absolutely false”, he said.

Mr Amewu revealed that Aker Energy, on behalf of its partners, announced after a successful appraisal of the Pecan Field discovery, a significant oil find “based on existing subsurface data from seismic, wells drilled and an analysis of the Pecan -4A well result, the existing discoveries are estimated to contain gross contingent resources (2C) of 450 – 550 million barrels of oil equivalent”.

How did IMANI arrive at the valuation of the field at $30 billion?

In questioning the valuation of the field at $30 billion, the Energy Minister said IMANI simply multiplied the assumed price of $65 per barrel by 450 million barrels.

“This exposes the weaknesses in IMANI’s analyses as well as its poor understanding of petroleum economics. The 450 million barrels of oil equivalent are gross contingent resources, which are the potential resource available all of which cannot be recovered under current technology. IMANI wants us to believe that all the 450million barrels of oil equivalent will be produced but fails to explain how that can be”, Amewu said.

He added: “In Ghana, our average crude oil recovery rate is 25%. At this rate, the field value will be estimated at $7.3 billion assuming a price of $65 per barrel. We are working with Aker Energy to enhance oil recovery mechanism to achieve a recovery rate of 40%, which will be the highest in Ghana’s oil and gas history and which occurrence will appreciate the value to $11.7 billion. This will be a significant gain for both Ghana and the partners”.

He announced that there was no basis for a new petroleum agreement as claimed by IMANI because the work that was done by Aker Energy formed part of an appraisal programme based on the existing petroleum agreement.

“It must be stated that as a country, we operate within the laws governing petroleum agreements, therefore any petroleum find when produced will be shared according to the terms of the applicable petroleum agreement”, said Mr Amewu.

The minister denied the allegations by IMANI that Fueltrade is owned by the Chief Executive of the Ghana National Petroleum Authority, Dr. K.K. Sarpong and his family.


Source: Ghana/ClassFMonline.com/91.3FM

Source: Patrick Ayumu