Government has officially signed an exploration and production agreement with Eni Exploration for the commencement of work on the US$6 billion Sankofa Oil and Gas Fields located Offshore Cape Three Points (OCTP).
The next stage of the project will be the approval of the Plan of Development (POD) after which Parliament would be called upon to ratify it to complete the process. These processes are expected to fully end close of year 2014.
The official endorsement of the agreement by the Government of Ghana, Eni Explorations and Vitol group is to pave way for the massive exploration and development of the field?s oil and gas reserves which is estimated? to produce approximately, 1.3TCF (Trillion Cubic Feet) in addition to 50, 000 barrels of oil per day.
With the agreement, production is expected to begin by 2017 to augment Ghana?s recent production capacity.
Ghana?s negotiation team was led by Minister of Energy and Petroleum, Emmanuel Armah Kofi-Buah and Minister of Finance, Seth Tekper. They both expressed relief at the completion of the negotiation which according to sources have been going on for over a year.
Operators of the OCTP, Eni Explorations say they will deliver the project on time to enable Ghana come out of its current Energy woes.
The project has a lifespan of 20 years to produce both oil and gas for domestic and commercial purposes to help Ghana address the critical constraints of power and cheaper fuels.
The commencement of the project will require additional construction of Floating Production Offshore Storage (FPSO) vessel to store the estimated oil capacity to be produced and the 50 million cubic feet from Tweneboah Enyera Ntonne (TEN) field.
Eni Exploration and Vitol will focus on domestic gas markets where they are expected to play vital roles in production.
There is an ongoing tender process to select what the government terms ?the best? contractor to build the third FPSO and for it to be delivered in the last quarter of 2016 for actual oil and gas production will start in early 2017.
Ghana currently has one FPSO, named after the country?s first president, Dr Kwame Nkrumah. It was delivered to Ghana in 2010 and is currently producing an average of 120,000 barrels of crude oil daily.
A second FPSO, named FPSO J.E.A. Mills, which is currently under construction in Singapore, is 30 per cent complete and would be delivered in the last quarter of 2015. Commercial production of oil would commence on it before the end of 2016.
Large quantities of oil and gas have been discovered offshore Cape Three Points in the Western Region by Eni and Vitol, both oil companies.
The oilfields, christened Sankofa, have large deposits of gas which are expected to power the country?s thermal plants to produce more electricity to bring to an end the frequent power outages being experienced in the country.
More liquefied petroleum gas (LPG) and other petroleum products are expected to come on stream when the FPSO begins production in 2017.
A little over $500 million was spent to import crude oil over an eight-month period to power thermal plants when gas supply from Nigeria to Ghana got disrupted.
Thus, the processing of more gas on the third FPSO would save the government millions of dollars in crude oil imports.
Experts say the FPSO would produce the largest amount of gas in the history of Ghana,? explaining further that aside from the production of more than 50,000 barrels a day, the FPSO would produce more than 150 million cubic feet of gas daily.?
Eni and Vitol are the operators of the Sankofa fields, while the Ghana National Petroleum Corporation (GNPC) is partnering them on behalf of the the country.
Source: Ebenezer Sabutey