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Reduced investment in fossil fuel threat to local industry - Dep Minister

BY: Donald Ato Dapatem

A Deputy Minister of Energy, Andrew Egyapa Mercer, has said that the drastic reduction in fossil fuel projects by Western nations coupled with the revision of businesses by exploration companies are threats to Ghana’s growing oil sector.

“There exists a real risk of stranded assets owing to Ghana’s vast unexploited oil and gas reserves.

The aforementioned notwithstanding, Ghana still regards its crude as a resource vital for national development and the very medium it can use to fund its way to a net-zero status,” he said.

Mr Mercer stated this when he delivered a key note address at the Africa Energies Summit 2022 in London.

It was attended by key energy players investing in the continent and decision-makers from corporate players active in Africa through to fast-moving independents, finance, legal service and supply companies, and African governments and national oil corporations seeking investors.

Renewable sources

Mr Mercer noted that the intermittent nature of renewable energy sources, as well as the cost implication of technology required to effectively harness same, rendered renewables incapable of satisfying baseload demands.

He said for Ghana and other African nations, natural gas had been identified as the transition fuel of choice, a conclusion which necessitated the continuation of responsible oil and gas exploration and production.

“Also noteworthy is the fact that petroleum products will remain a need for some decades in spite of the global shift away from fossil fuels,” he added.

Mr Mercer told the investors that in the light of this reality and in line with Ghana’s ambition of becoming a hub for refined petroleum products in West Africa by 2030, the country had launched the Petroleum Hub project.

“The hub is intended to feature three refineries, each with a minimum production capacity of 300,000 barrels per day; five petrochemical plants, industrial and storage infrastructure. Some 20,000 acres of land has been secured in the Jomoro Municipality of the Western Region of Ghana for this project,” he indicated.

He stressed that Ghana was open to investments in the hub, explaining that factors like the central location of the country and access to vibrant shipping routes, which provided easy access to regional markets, made the hub project viable.

Mr Mercer added that Ghana had seen the need to develop a National Energy Transition Plan to guide her journey towards attaining net-zero status at a pace realistic to her peculiar circumstances.

Carbon emissions

Mr Mercer urged the world to sympathise and come to terms with the continent’s dire need for basic development with the resources available, whilst honouring collective energy commitments more so because Africa’s total contribution to global carbon emissions stood at less than four per cent.

He said it was incumbent on African nations to employ new and innovative methods to attract energy finance and investment.

“Local technical capacity must be speedily enhanced to reduce reliance on Western support, and energy-related cross-border collaborations amongst African nations must be encouraged.

This would ultimately ensure that African nations derive maximum value from its oil and gas resources,” he added.

He advised that energy transition was coming with some merits which African states must pay close attention to, including the opportunity for industrial, while stressing that commercial venture into the renewables market had the potential for revenue generation, job creation and energy security enhancement.

“Ghana’s recent discovery of high-grade lithium is an opportunity the Government intends to leverage on in exploring the real possibility of manufacturing solar batteries locally.

The naturally occurring sunshine has also become a commodity which African countries must position themselves to fully harness,” Mr Mercer added.