Ghana signs $6bn oil exploration deal with Italy's ENI

The government of Ghana and Eni Exploration have sealed a $6 billion deal to allow the Italy firm start oil and gas exploration at the Offshore Cape Three Points block in the Western region.

Under the deal, Eni will also deploy a third floating production storage and offloading (FPSO) vessel that will help boost oil production in the West African country.

According to a statement from the Energy Ministry, the deal is subject to parliamentary approval and the block should start producing oil and gas by mid-2017.

The government negotiating team was made up of the ministers of Energy and Petroleum, Finance, and the Ghana National Petroleum Corporation.

Both ministers expressed their relief at the conclusion of the negotiations with ENI/Vitol which has lasted over a year, noting that it puts Ghana on the path to energy security as there will be more gas to fuel generating plants.

“This negotiation has thought Ghana a lesson of the urgent need to strengthen the balance sheet of the country’s energy institution to enable them borrow on the international market. It will also reduce the investment risk that has been a major hurdle in this negotiation,” the statement said.

The negotiations put Ghana on the path of addressing one of the critical constraints to power generation which is clean fuel source.

This project promises to deliver up to 170 million cubic feet of gas per day for the next two years.

The start of commercial gas production will also require the construction of a 3rd FPSO unit to produce at maximum 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 Ntomme (TEN) projects.

ENI and Vitol will focus on domestic gas markets where they are expected to play prominent role. ENI has been operating in Ghana since 2009 and currently operates two exploration-offshore blocks: OCTP and Keta.

Ghana produces around 100,000 barrels per day from the offshore Jubilee field.