Government says Policy Think Tank IMANI goofed when it sought to question portions of the contractual agreement it signed with and Aker Energy.
“The contract area has seven discoveries namely 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 under the programme of an appraisal to HESS” he told the media, Friday.
IMANI at a recent public advocacy program challenged what it says were various acts of omissions on the part of the government of Ghana 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.
But the Energy Minister John Peter Amewu at a news briefing in Accra described the claims by IMANI as total falsehood.
In 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 Fueltrade subsequently farmed in 2015.
He disclosed that Fueltrade’s participating interest was set at 2% for which it paid about $9 million with a performance guarantee of 2 million USD.
Is Ghana losing $30 million?
The Energy Minister 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.
Mr Amewu revealed that Aker Energy, on behalf of its partners announced after a successful appraisal of the Pecan Field discovery, a significant oil find as captured below “Based on existing subsurface data from seismic, wells drilled and an analysis of the Pecan -4A well result, the existing discoveries are estimated to contain gross contingent resources (2C) of 450 – 550 million barrels of oil equivalent.”
How did IMANI arrive at valuation of the field at $30 billion?
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. 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 450 million barrels of oil equivalent will be produced but fails to explain how that can be” Amewu said.
He added that “In Ghana, our average crude oil recovery rate is 25%. At this rate, 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 announced 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 find when produced will be shared according to the terms of the applicable petroleum agreement,” said Amewu.
The Minister in his concluding presentation denied allegations by IMANI that Fuel Trade is owned by the CEO of the Ghana National Petroleum Authority Dr K.K. Sarpong and his family.