{"id":3336,"date":"2019-04-12T18:58:05","date_gmt":"2019-04-12T18:58:05","guid":{"rendered":"https:\/\/www.aptnewsghana.com\/?p=3336"},"modified":"2019-04-12T18:58:14","modified_gmt":"2019-04-12T18:58:14","slug":"imani-alert-ghana-discovers-africas-biggest-oil-deposit-but-may-lose-7-2bn","status":"publish","type":"post","link":"https:\/\/www.aptnewsghana.com\/index.php\/2019\/04\/12\/imani-alert-ghana-discovers-africas-biggest-oil-deposit-but-may-lose-7-2bn\/","title":{"rendered":"Imani Alert: Ghana discovers Africa\u2019s biggest oil deposit but may lose $7.2bn"},"content":{"rendered":"\n<p>On\n Thursday 14th February 2019, the Ministry of Finance in a press release\n sent from Oslo, Norway, confirmed Aker Energy ASA\u2019s \u201csignificant \noffshore resource base in Ghana&nbsp;and [that Aker] has committed to scale up new development in the Deepwater Tano Cape three points block (DWT\/CT).\u201d&nbsp;<\/p>\n\n\n\n<p>The  statement also said <a href=\"https:\/\/www.aptnewsghana.com\/index.php\/2019\/02\/18\/aker-energy-eyes-ipo-after-submitting-ghana-oilfield-plan-in-march\/\">Aker\u2019s announcement<\/a> was \u201cthe biggest oil find in  Africa, of 450-550 million barrels, with potential recoverable reserves  of nearly one billion barrels.\u201d At today\u2019s Oil price of $65 per barrel,  that field is worth at least $30 billion (bn).<\/p>\n\n\n\n<p>Given\n the fact that this impressive find constitutes additional oil \ndiscovered in Aker\u2019s contract area previously held under an old \nPetroleum Agreement (PA) which lapsed in 2014, it is our considered view\n that the additional oil discovered in 2019 are essentially not covered \nby any of the Petroleum Agreements (PA) in force. Hence those additional\n finds require a new Petroleum Agreement should be negotiated under the \nPetroleum (Exploration and Production) Act, 2016 Act 919. Were this to \nbe done, Ghana stands to gain an estimated $9bn, through potentially 25%\n to 30% increased equity interest and royalties (assuming 5% royalty \nplus 15% carried interest plus 5%-10% additional participating interest \nin block) in the short term plus any potential corporate income tax and \nthe windfall additional oil entitlements (AOE) in the long term. As \nthings stand, Ghana stands to gain a paltry 14% of increased equity \ninterest and royalties (10% interest in block + 4% royalty) amounting to\n $4.2 bn in the short term, representing a potential loss of $4.8 \nbillion \u2013 that is, $9bn less $4.2 bn.<\/p>\n\n\n\n<p>On Monday 3rd March&nbsp;2019,\n Aker in a press statement posted on their website stated &#8220;We are \npleased to announce another successful well as the operator of the \nDWT\/CTP block. The drilling result is another confirmation of the \ngeological model for the area. The discovered resources from the well \nwill further strengthen the robustness of the Pecan field development. \nWe will now continue the appraisal drilling campaign&nbsp;while finalizing the Plan of Development to be submitted by the end of March,&#8221; says Jan Arve Haugan, CEO of Aker Energy.\u201d<\/p>\n\n\n\n<p>However,\n it would appear we may not be exacting the maximum interest from this \nsignificant find. GNPC may have sold Ghana short by allowing Aker to \nassume from the start\n that these new oil discoveries automatically fall under the existing \nPetroleum Agreement (PA), which is erroneous. At the least, Ghana could \nhave exercised its right to take up the 10% additional equity option in \nthe Aker Block. The failure refusal or negligence to do this is truly \nstartling for a developing nation which needs to make the most of its \nnatural resources.<\/p>\n\n\n\n<p>We\n are submitting the questions below for your perusal in the hope you \nwill take the opportunity to correct any misapprehensions:<\/p>\n\n\n\n<p>1.\n When was the original Hess Agreement ratified by Parliament and what \nwas the total exploration period duration and when did exploration \ncease; and, did the minister of energy give any extensions?<\/p>\n\n\n\n<p>2. How many discoveries were made by Hess and which discoveries were appraised and when were these appraisal periods?<\/p>\n\n\n\n<p>3.\n What was the appraisal period for each of the discoveries and what was \nthe result of the appraisal for each of the discoveries?<\/p>\n\n\n\n<p>4.\n At the time of Hess\u2019 exit, what was the status of the various \ndiscoveries and what period was the PA in? Was it Exploration period or \nAppraisal period? Or past these periods for each discovery?<\/p>\n\n\n\n<p>6.\n Did Hess declare commerciality on any of the discoveries? If so which \nof the discoveries and when were these commercialities declared for each\n discovery?<\/p>\n\n\n\n<p>7. When did the exploration period end? Was this Exploration period extended at the end? If so, by whom?<\/p>\n\n\n\n<p>8.\n What was the status of the Pecan discovery at the time of Hess\u2019 exit? \nHow many wells had been drilled? Was any well drilled during Appraisal Period?<\/p>\n\n\n\n<p>9.\n Did Hess propose a discovery area, including hydrocarbon pay sections, \nwhich excludes what is now being explored by Aker Energy?<\/p>\n\n\n\n<p>10. Did Hess identify the Oil Water Contact for the Pecan discovery or any other discovery?<\/p>\n\n\n\n<p>11.\n What was the condition under which Aker was allowed to drill Pecan 4A, \nand Pecan South? What was the objective of the drilling program approved\n by Petroleum Commission?<\/p>\n\n\n\n<p>12. Is there any pressure communication between the reservoirs of the Pecan4A and Pecan South-1 wells drilled?<\/p>\n\n\n\n<p>13.\n If there is no pressure communication or connection between the \nreservoirs at Pecan 4 and those at Pecan South-1, is that not what the \nPA defines as a discovery?<\/p>\n\n\n\n<p>14. How is the Pecan South well classified?<\/p>\n\n\n\n<p>15.\n How the cost of that well is treated &#8211; Development cost or exploration \ncost- taking into consideration the fact that GNPC does not pay for \nexploration, and that the exploration period has expired?<\/p>\n\n\n\n<p>16.\n What is the condition under which Aker would be drilling Pecan South \nEast well? Again what is the objective of the well? How is that well \nclassified? Is it an Appraisal well or an Exploration well?<\/p>\n\n\n\n<p>The\n reason why these questions and the answers we seek are important is \nthat we believe a new Petroleum Agreement for this new Discovery will \ngive Ghana 15% Royalty whereas the existing HESS\/Aker Petroleum \nAgreement gives Ghana 3-5% Royalties, a very significant 10% difference.<\/p>\n\n\n\n<p>Questions on Aker\u2019s Submitted Plan of Development<\/p>\n\n\n\n<p>We note Aker has submitted a Plan of Development for the areas in question. <\/p>\n\n\n\n<p>On\n 28th March 2019, in a press statement posted on Aker\u2019s website, it \nindicated that, as the Operator of the DWT\/CTP contract area, on behalf \nof its partners, Ghana National Petroleum Corporation (GNPC), Lukoil \nOverseas Ghana Tano Limited and Fueltrade Limited, has submitted an \nIntegrated Plan of Development and Operations (PDO) to Ghanaian \nauthorities for the Deepwater Tano \/ Cape Three Points (DWT\/CTP) block \noffshore Ghana.<\/p>\n\n\n\n<p>However,\n a careful review of the submitted POD reveals that it may not deliver \nthe best value to the good people of Ghana. Also, from our \ninvestigations, it looks like there wasn\u2019t much collaboration with all \nthe relevant stakeholders in the various fields prior to proposing \ndevelopment strategies for some of the fields that straddle other \nblocks. These and other things make the under-listed questions very \nrelevant:<\/p>\n\n\n\n<p>1.\n Aker\u2019s Petroleum Agreement and the laws of the land require it to \nsubmit a POD in a particular format. Among others, the POD is to be \nbased on detailed engineering studies and include estimated production \nprofiles, proposal\n for the delineation of the development and production area, etc. Would \nyou say that the POD Aker submitted followed this prescribed format for \nALL the discoveries in your contract area? Kindly note the emphasis on \nthe word \u201call\u201d.<\/p>\n\n\n\n<p>2.Aker\u2019s\n contract area has discoveries that straddle other contract areas; In \norder to propose the most efficient strategy for developing those \nfields, international best practices require that it works closely with \nthe operators of those fields. Did Aker work with the operators of the \nfields that have discoveries straddling its block before proposing a \ndevelopment strategy for those fields?<\/p>\n\n\n\n<p>3.\n In Aker\u2019s POD, the company indicated that it will take a decision on \nthe Beech field in 2025 and bring it into production in 2029 contrary to\n what was earlier communicated to Ghana\u2019s Finance Minister barely a \nmonth ago:<\/p>\n\n\n\n<p>a. What informed this decision?<\/p>\n\n\n\n<p>b. Was this decision taken in consultation with the other operators?<\/p>\n\n\n\n<p>c. What happens if Aker decides, in 2025, not to develop that field, will the nation not have lost out?<\/p>\n\n\n\n<p>4.\n The Finance Minister is reported to have told investors in Norway that \nAker was considering bringing a field (the Beech field) into production \nbefore the end of 2020 or 1st Quarter 2021, is that still the case?<\/p>\n\n\n\n<p>5.\n In the aforementioned press statement on Aker\u2019s website, it indicated \nthat \u201cIn addition to the FPSO for the Pecan field development, Aker \nEnergy has entered into an option agreement with Ocean Yield ASA for a \nsecond FPSO, Dhirubai-1. If the option is exercised, Dhirubai-1 could \neither be used to accelerate production or for other, potential \ndevelopments dependent on volumes and geographical distribution of \nthese\u201d:<\/p>\n\n\n\n<p>a.\n What informed the decision to enter into an option agreement for an \nFPSO even before submitting a comprehensive POD for these \u201cpotential \ndevelopments\u201d?<\/p>\n\n\n\n<p>b. The \u201cpotential developments\u201d, do they straddle other contract areas?<\/p>\n\n\n\n<p>c.\n If some of them do, were the operators of those fields consulted before\n Aker entered into the option agreement with Ocean Yield ASA?<\/p>\n\n\n\n<p>Once again, the reason why these questions and the answers we seek are important is that we\n believe closer cooperation with all relevant stakeholders in agreeing a\n strategy for developing the field would present the country a much \nbetter deal than one developed by a few stakeholders.<\/p>\n\n\n\n<p>Sincerely,<\/p>\n\n\n\n<p>Franklin Cudjoe <\/p>\n\n\n\n<p>Founding President &amp; CEO, IMANI<\/p>\n","protected":false},"excerpt":{"rendered":"<div class=\"mh-excerpt\"><p>On Thursday 14th February 2019, the Ministry of Finance in a press release sent from Oslo, Norway, confirmed Aker Energy ASA\u2019s \u201csignificant offshore resource base <a class=\"mh-excerpt-more\" href=\"https:\/\/www.aptnewsghana.com\/index.php\/2019\/04\/12\/imani-alert-ghana-discovers-africas-biggest-oil-deposit-but-may-lose-7-2bn\/\" title=\"Imani Alert: Ghana discovers Africa\u2019s biggest oil deposit but may lose $7.2bn\">[&#8230;]<\/a><\/p>\n<\/div>","protected":false},"author":1,"featured_media":3337,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[8],"tags":[539],"class_list":["post-3336","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-oil-and-gas"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Imani Alert: Ghana discovers Africa\u2019s biggest oil deposit but may lose $7.2bn - Apt News Ghana<\/title>\n<meta name=\"description\" content=\"t the time of Hess\u2019 exit, what was the status of the various discoveries and what period was the PA in? 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Or past these periods for each discovery?","og_url":"https:\/\/www.aptnewsghana.com\/index.php\/2019\/04\/12\/imani-alert-ghana-discovers-africas-biggest-oil-deposit-but-may-lose-7-2bn\/","og_site_name":"Apt News Ghana","article_published_time":"2019-04-12T18:58:05+00:00","article_modified_time":"2019-04-12T18:58:14+00:00","og_image":[{"width":802,"height":450,"url":"https:\/\/www.aptnewsghana.com\/wp-content\/uploads\/2019\/04\/g-oil-and-gas.jpg","type":"image\/jpeg"}],"author":"Editor","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Editor","Est. reading time":"7 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.aptnewsghana.com\/index.php\/2019\/04\/12\/imani-alert-ghana-discovers-africas-biggest-oil-deposit-but-may-lose-7-2bn\/#article","isPartOf":{"@id":"https:\/\/www.aptnewsghana.com\/index.php\/2019\/04\/12\/imani-alert-ghana-discovers-africas-biggest-oil-deposit-but-may-lose-7-2bn\/"},"author":{"name":"Editor","@id":"https:\/\/www.aptnewsghana.com\/#\/schema\/person\/26a4fa2e1ccac2c31f11b3186d0240fa"},"headline":"Imani Alert: Ghana discovers Africa\u2019s biggest oil deposit but may lose $7.2bn","datePublished":"2019-04-12T18:58:05+00:00","dateModified":"2019-04-12T18:58:14+00:00","mainEntityOfPage":{"@id":"https:\/\/www.aptnewsghana.com\/index.php\/2019\/04\/12\/imani-alert-ghana-discovers-africas-biggest-oil-deposit-but-may-lose-7-2bn\/"},"wordCount":1452,"commentCount":0,"publisher":{"@id":"https:\/\/www.aptnewsghana.com\/#organization"},"keywords":["Oil and Gas"],"articleSection":["Business"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.aptnewsghana.com\/index.php\/2019\/04\/12\/imani-alert-ghana-discovers-africas-biggest-oil-deposit-but-may-lose-7-2bn\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.aptnewsghana.com\/index.php\/2019\/04\/12\/imani-alert-ghana-discovers-africas-biggest-oil-deposit-but-may-lose-7-2bn\/","url":"https:\/\/www.aptnewsghana.com\/index.php\/2019\/04\/12\/imani-alert-ghana-discovers-africas-biggest-oil-deposit-but-may-lose-7-2bn\/","name":"Imani Alert: Ghana discovers Africa\u2019s biggest oil deposit but may lose $7.2bn - Apt News Ghana","isPartOf":{"@id":"https:\/\/www.aptnewsghana.com\/#website"},"datePublished":"2019-04-12T18:58:05+00:00","dateModified":"2019-04-12T18:58:14+00:00","description":"t the time of Hess\u2019 exit, what was the status of the various discoveries and what period was the PA in? 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