Ministry approves Pecan Energies oilfield development plan
The Ministry of Energy has approved the plan of development (PoD) for the Deepwater Tano/Cape Three Points block offshore Ghana.
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The operator of the block, Pecan Energies, presented an overall plan for the phased development and production of the resources in the contract area.
A statement issued by Pecan Energies last Monday stated that the phased development of the contract area would begin with the Pecan field in two phases.
The Pecan field is the largest of several discoveries in the contract area, with 268 million barrels expected to be produced in the two phases.
The statement added that the Pecan field, situated in ultra-deep waters, ranged from 2,400 to 2,700 metres, about 115 kilometres offshore Ghana.
The operators are expected to finance the development with a capital expenditure (CAPEX) of $3.5 billion. It will be developed with a floating production storage and offloading (FPSO) vessel and a subsea production system (SPS).
The company said it was estimated that all discoveries in the contract area had a recoverable resource potential of 550 million barrels Since the country started the production of oil in 2010, it has cumulatively produced 560.19 million barrels of oil.
Context
The production of the Deepwater Tano/Cape Three Points block is expected to contribute about $10 billion to the economy in the medium term.
Since 2018, Ghana’s oil production has been dwindling at an average rate of 10 per cent.
Although rising oil prices helped to push the earnings to the country to the highest of $1.4 billion last year, the nominal production figures have been on the decline.
Figures obtained from the Public Interest and Accountability Committee (PIAC) indicate that the country’s annual production of oil, which started at 1.18 million barrels (bbls), peaked at 71.439 million (bbls) in 2019, up from 62.135 million in 2018.
Production has since been reducing to 66.926 million bbls in 2020, 55.05 million bbls in 2021 and 51.756 million bbls last year, at an average rate of 10 per cent.
Pecan Energies is owned by Africa Finance Corporation (AFC), a pan-African multilateral development finance institution, which acquired 100 per cent shares of Aker Energy from a Norwegian Industrial Investment Company this year.
AFC
AFC has a proven track record in providing pragmatic solutions to Africa’s infrastructure deficit, having assembled a $10.5 billion portfolio of loans and other investments across six sectors.
Since 2007, AFC has invested over $1 billion in the upstream oil and gas sector in Africa through the deployment of innovative financial products that support the sustainable development of Africa’s vast resources, while retaining value on the continent The corporation has 40-member countries, with Ghana becoming an AFC sovereign shareholder in 2018, having acceded to membership in 2011.
In Ghana, AFC has invested in a number of projects over the last 15 years both as equity and debt providers.
Some of the projects include the Kpone Independent Power Plant, the Takoradi Port Project and the expansion of the Kotoka International Airport.
Competent team
The approval, the company said, was an achievement which demonstrated AFC’s de-risking capabilities.
It also shows the corporation’s capacity to navigate complex challenges, leverage the expertise of the company and collaborate effectively with partners to achieve shared objectives.
“We are excited about the potential GDP uplift of $10 billion for the Ghanaian economy from the Deepwater Tano/Cape Three Points block and look forward to working closely with the government of Ghana to ensure the successful execution of this important project,” the President and Chief Executive Officer of AFC, Samaila Zubairu, said.
“With this milestone, we believe that the future of the Pecan and other associated fields on the block shines bright, bringing with it promising economic prospects and sustainable growth opportunities for Ghana and its people” he said.
What’s next?
Following the approval of the PoD, the company stated that it would now work towards a final investment decision after extensive engagement with all relevant stakeholders and partners.
“We have a highly competent technical team with field management and global deep water project experience,” the CEO of Pecan Energies AS, Eiliv Gjesdal, said.
With AFC’s superior knowhow in investing in the upstream oil and gas sector combined with technical support from the vastly experienced Aker Group “we are confident we can deliver the project on time, with quality and within cost,” he said.
The CEO of Pecan Energies Ghana Limited, Kadijah Amoah, said they had worked together as a team, overcoming considerable obstacles along the way.
“The approval of the PoD is a testament to the perseverance and dedication shown by the Pecan Energies team to the project. We remain committed to Ghana and look forward to working together with our partners towards first oil," Ms Amoah said.