The new concession block acquisition approval sees the company further strengthen its stake in the country’s offshore oil and gas exploration despite the lingering controversy over the terms given it for its ongoing Sankofa gas field development..
This is due to the fact that, several renowned Non-Governmental Organisations in the country have raised concerns about ENI’s initial US$ 7 billion gas deal signed between ENI, VITOL and GNPC.
According to the Africa Center for Energy Policy analysis of the deal, the fiscal benefits of the entire project based on the working interests of the parties give ENI Ghana and Vitol Ghana (Contractors) 56% of total cash flows and profits of US$7billion, equivalent to the cost of the project.
It explained that, based on after tax working interest, the contractor group will be entitled to US$14.3 billion (56%) of total cash flow over the project life whilst the state is entitled to US$11.1 billion (44%).
This reveals that, the country’s take is lower than what pertains in previous contracts of other companies.
However, the Cape Three Points Block 4 licence was awarded to a joint venture which involves ENI Ghana (with 42.4691% stake) as operator, Vitol Upstream Tano (with 33.9753% stake), Ghana National Petroleum Corporation (GNPC with 10% stake), Woodfields Upstream Ghana (9.5556% stake), and GNPC Exploration and Production Company (Explorco, 4% stake).
The new block covers an area of 1,127 square kilometres in water depths ranging from 100 to 1,200 meters and partially surrounds the OCTP block also operated by ENI.
In the event of a successful exploration outcome, the block will benefit from the OCTP project infrastructures, currently under development.
ENI operates the OCTP project, which involves the integration and synergic development of several various oil and gas discoveries (Sankofa Main, Sankofa East and Gye-Nyame).
The project envisages the development of subsea wells tied-back to an FPSO which will be connected to shore via a gas transport line.
The OCTP oil production start-up is expected in 2017 while the gas production, which will supply the domestic market for power generation, is expected to commence in 2018.
Ghana’s biggest opposition party – New Patriotic Party (NPP) – alleged a couple of months ago during the visit of Italian Premier Matteo Renzi to Ghana that the deal was inflated by US$2 billion, a charge denied by Petroleum Minister Emmanuel Amah Kofi Buah, who insisted that a renegotiation of the deal by the current administration saved Ghana $600 million.
ENI has been present in Ghana since 2009 where it operates through the subsidiary ENI Ghana. In the country, the company has also undertaken important social programmes including a health project in the Western Region for the benefit of a population of over 300,000 people.
Source; Adnan Adams Mohammed