Ghana Not Losing U.S.$30 Billion in Aker Oil Find

press release

The Minister for Energy, John Peter Amewu, has rejected claims by policy Think Tank, IMANI Africa that the state risks losing US$30 billion in the recent oil find by Aker Energy Ghana Limited.

IMANI Africa, at a recent public advocacy programme, accused government of what it says were various acts or omissions in respect of the plan of development submitted by Aker Energy and on behalf of all the contracting parties in the Petroleum Agreement (PA) covering the Deep Water Tano/Cape Three Points (DWT/CTP) contract area.

However, addressing the press on Friday, 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.

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," Mr. Amewu said, adding, "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."

According to the minister, Ghana's average crude oil recovery rate is 25%. At this rate, he said, 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 stated.

He insisted 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 finds when produced will be shared according to the terms of the applicable petroleum agreement," Mr. Amewu stated.

Providing some background information on the agreement, Mr. Amewu said the PA covering the DWT/CTP contract area operated by Aker Energy was executed on February 8, 2006, between the Government of Ghana - GNPC, AMERADA HESS Corporation, Lukoil and Fuel Trade subsequently formed in 2015.

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

"The contract area has seven discoveries; 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 of AMERADA HESS," he added.

The Minister denied another allegation by IMANI that Fuel Trade is owned by the Chief Executive Officer (CEO) of the Ghana National Petroleum Authority (GNPC), Dr. K.K. Sarpong and his family.

He said Fuel Trade began operations when the New Patriotic Party was in opposition and the current CEO of GNPC was not in the helm of affairs.

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