Proposal to increase acquisition of Aker oil block good, but price must be justified - IMANI

Franklin Cudjoe Bore IMANI Africa President, Franklin Cudjoe

Mon, 9 Aug 2021 Source: Kojo Thompson, Contributor

Founding President of IMANI Africa, Franklin Cudjoe, has backed GNPC’s proposal to increase the acquisition of Aker’s oil block.

He was quick to add that the exploration company must do well to justify the price and benefits of the deal to the Ghanaian public.

In an article, Franklin Cudjoe described the timing of the GNPC move as opportune.

“Most of Ghana’s oilfields have a productive life of about 20 years more or less for profitable exploitation. Global oil demand according to experts will plateau from 2030 onwards, with declines in oil demand starting after 2040. Already, the largest oil companies like BP, Shell and others have embarked on decarbonization programs, with over $198 Billion already spent by the top 9 oil companies on such programs," part of his piece read.

"What this means is that the price of oil might be volatile, and with most of our finds being deepwater finds, there is the tendency of them not being economically viable for exploitation in the next 15 to 20 years. Ghana’s oil assets face the risk of being what is called ‘stranded assets’ if the nation is not able to develop the right capacity to invest heavily to exploit the potential of these resources within the next two decades,” it added.

He also bemoaned the unwillingness of investors to pump monies into capital-intensive deepwater projects.

“Globally, between 2019 to 2021 (estimated) total investment has dropped by about 22% in upstream oil and gas projects. In fact, the International Energy Agency predicts renewable power spending in 2021 will be above that of upstream oil and gas activity,” he stated.

There is a push back from some quarters following a request by Energy Minister, Dr Mathew Opoku Prempeh, to Parliament to allow the Ghana National Petroleum Corporation (GNPC) to purchase stakes in Aker Energy’s oil block and in AGM Petroleum’s oil block.

The request before Parliament revealed the GNPC through GNPC Exploration and Production Company Limited (GNPC Explorco) wants to buy 37% stake in Deep Water Tano/Cape Three Points (DWT/CTP) operated by Aker Energy Ghana Limited and 70% stake in the South Deep Water Tano (SDWT) operated by AGM Petroleum Ghana Limited.

Although Parliament’s Joint Committee on Energy and Finance has also recommended approval of the request, some commentators have said the deal needs clarity.

Already, the Chairman of the Civil Society Platform on Oil and Gas, Dr Steve Manteaw, has urged his co-CSOs against killing GNPC’s ambition for Ghana to explore and produce its own oil.

“We will be behaving irrationally if we don’t support GNPC to increase its stake now”, Dr Manteaw said on News File over the weekend.

The CSO front appears divided on the deal, with some pushing for Parliament to investigate GNPC for going ahead to increase its stake in offshore blocks run by Aker Energy.

Source: Kojo Thompson, Contributor
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