Home Opinion GNPC could spend US$66 million to decommission saltpond oil field

GNPC could spend US$66 million to decommission saltpond oil field

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It seems the process towards the decommissioning of the saltpond oil field offshore Central region is consuming a huge chunk of state revenue as huge sums of funds have been pumped into the activity.

Already, The Ghana National Petroleum Corporation has pumped US$11 Million dollars into decommissioning only one out of the 6 oil wells. According to some analysts, the state is likely to spend about US$ 66 Million dollars to decommission all the six oil wells on the saltpond field.

This is worrying based on the fact that funds were not set aside for the decommissioning of the saltpond oil field during its active operation and government had to use revenue from its oil production to undertake this operation when this funds could have been used to undertake other important projects.

It is therefore imperative for GNPC, which is the regulator of the upstream petroleum industry to develop a policy that will compel crude oil producing firms operating in the country to set aside enough funds that will pay for the decommissioning of their wells when they dry up

According to the 2022 report of the Public Interest and Accountability Committee, (PIAC), Total expenditure on the Saltpond decommissioning amounted to US$26.64 million in 2022. This is US$3.23 million more than the US$23.41 million approved in the 2022 Work plan of GNPC.

The decommissioning contract is being undertaken by a wholly owned Ghanaian company, Hans and Co. Oil and Gas Company, leveraging a consortium of experts of varied professional backgrounds gathered from around the world to ensure all necessary procedural, technical and social controls and mitigation measures were rightly executed to reduce environmental impact to the barest minimum.

Production at the field was stopped in 2015 after the field exhausted its reserves to a low of 200 barrels a day and, therefore, unable to meet operational cost becoming unprofitable.

The decommissioning works involves safe plugging or sealing of the wells in the seabed from which the oil was drawn and the disposal of the equipment used during the offshore oil production. It is also ensuring the removal of the subsea infrastructure and the host production facility to pave way for the safe use of the sea area where the production facility stood.

The first phase of the three phase decommissioning project, which includes the decommissioning plan, budget and procurement strategy, was done between March 2018 and November 2018.

The second included the procurement of a contractor to execute the work and the last phase the post decommissioning monitoring and evaluation.

The Saltpond Oil Field is the oldest oil field offshore Ghana discovered in 1970 by Amoco Consortium and started production in 1978 after changing hands to Agri-Petco of the United States.

By Kwabena Adu Koranteng Writes

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