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Italian multinational oil and gas company ENI, and Swiss-based VITOL Energy have secured a 6.0- billion-dollar deal from the government of Ghana to commence oil and gas exploration and production, a release said here Monday.
This paves the way for the 6.0 billion OCTP (Sankofa Project) to start commercial production of oil and gas by mid-2017 to augment the country's current production capacity.
The release explained that the approval came after year-long negotiations between the government of Ghana and ENI/VITOL, operators of the offshore Cape Three Points (OCTP) block.
The government side comprised officials from the Ministry of Energy & Petroleum, Ministry of Finance, and the Ghana National Petroleum Corporation (GNPC).
The field, to be operated by ENI with 47.775 percent and VITOL with 37.37 percent, is expected to boost the supply of lean gas and liquefied petroleum gas on the domestic market.
According to Seth Terkper, the Minister of Finance, the project would put Ghana on the path of energy security as there will be more gas to fuel generating plants.
The start of commercial gas production will also require the construction of a third FPSO unit to produce a maximum of 170 million cubic feet of gas in addition to the 120 million cubic feet from the Jubilee Fields and 50 million cubic feet from the Tweneboah Enyeara and Ntome (TEN) projects.
"The next stage of the agreement will be the approval of Plan of Development (POD) and ratification of the approval by Parliament," it said.
"This negotiation has taught Ghana a lesson of the urgent need to strengthen the balance sheet of the country's energy institutions to enable them to borrow on the international market, " said Minister of Energy and Petroleum Emmanuel Armah-Kofi Buah.
This would also reduce the investment risk that had been a major hurdle in the negotiations, as it puts Ghana on the path of addressing one of the critical constraints to power generation, he said.
ENI and Vitol will focus on domestic gas markets where they are expected to play prominent roles in boosting domestic supply.
ENI has been operating in Ghana since 2009 and currently operates two exploration-offshore blocks - OCTP and Keta.
It has been present in sub-Sahara Africa since 1960 and is involved in exploration and production projects in over ten countries including DRC, Angola, Kenya and Togo.
Ghana is test running the China Development Bank (CDB)-funded gas infrastructure built by SINOPEC Petroleum to process 150 million standard cubic feet of gas per day from the Jubilee fields.
This is expected to forestall the perennial shortfalls experienced in gas supply from the West African gas pipeline for thermal electricity generation.
