GOVERNMENT HAS dismissed policy think tank, IMANI’s claim that Ghana is going to lose a whopping amount of $30 billion if the state fails to renegotiate the petroleum agreement with Norwegian energy giant, Aker Energy.
It would be recalled that on Thursday, April 25, 2019, IMANI held a press conference in Accra, announcing that Ghana risks losing US$30 billion in the recent oil find by Aker Energy Ghana Limited.
IMANI Africa indicated that Aker discovered the oil after its exploration licence had expired in 2014 and failed to go through the right processes, thereby making their exploration activities illegal.
It expressed the belief that the Pecan X and Pecan Y in the Deepwater Tano Cape Three Points block (DWT/CTP) are essentially not covered by any of the Petroleum Agreements (PA) in force, hence those additional finds require a new Petroleum Agreement to be negotiated under the Petroleum (Exploration and Production) Act, 2016 Act 919.
But Energy Minister, John Peter Amewu told journalists at the Information Ministry on Friday that IMANI’s statment was a fabricated falsehood.
According to Mr. Amewu, “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.
Mr. Amewu indicated 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, Mr. Amewu explained that IMANI simply multiplied the assumed price of $65 per barrel by 450 million barrels.
The Minister said “this exposes the weaknesses in IMANI’s analyses as well as its poor understanding of petroleum economics.”
He noted that “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.”
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.”
Mr. Amewu explained that “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.”
He says “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 IMANI claimed because the work that was done by Aker Energy formed part of an appraisal programme based on the existing petroleum agreement.
He added that “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.”
Meanwhile, he categorically denied IMANI’s allegations that Fuel Trade is owned by the Chief Executive of the Ghana National Petroleum Authority Dr. K.K. Sarpong and his family.