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IMF Might Need Some Answers. GNPC, GNGC, ENI and Due Dilligence

Posted by Business in Ghana on December 14, 2014

By Sydney Casely-Hayford

The news that Ghana’s Parliament approved the deal on the oil and gas project with ENI of Italy could raise important questions related to the Country’s program with the IMF.

There are implications for the budget, even as the price of crude continues to dip below the numbers used to estimate oil revenues to fund the Budget and other sectors, especially social safety nets might be compromised.

Whether subsuming GNGC into GNPC will affect the share of carried and participated interest of GNPC in its contract with ENI and whether there will be an impact on public and publicly guaranteed external debt is a big question.

Parliament already did the unthinkable and passed the $8billion contract with ENI speedily as it does when under pressure from Government to shore immediate cash demands.

The IMF program is struggling to finality, principally on a few key issues. One, the total value of Government debt is still open to debate and whether the composite debt must include liabilities of certain key parastatals such as VRA, GNPC and TOR must still be of concern. As also the debt of key Municipalities and Metropolitan Assemblies.

Two, the projected revenues are a problem with periodic budgets consistently below target and the payroll envelope is still threatening to engulf revenues.

As Parliament ducked the minority call for a stay in loan approval pending the $700million facility in court re: GNPC, the decision begged the question whether anyone had taken a closer look at ENI on the world scope. Read the rest of this entry »

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IMANI Alert: Can the Tema Oil Refinery deliver today? A possible way out

Posted by Business in Ghana on September 7, 2014

The energy sector is undoubtedly the most essential sector if Ghana is to come out of its current economic atrophy.  President Mahama underscored this fact when he declared that the Atuabo Gas project in his view, is the game changer in Ghana’s energy mix and an attempt to resurrect the near moribund economy.  That the second Millennium Challenge Compact is dedicated to energy attests to the vision.

One essential player in the energy picture of this sector is the Tema Oil Refinery (TOR).  TOR was established by Ghana’s first President, Kwame Nkrumah with financial and technical support from Italian investors. TOR’s mandate at the onset was refining crude oil for Ghana and her neighbouring countries. TOR’s core business has over the years been broadened to include procurement, storage, refinery and distribution of crude oil. However many observers have argued that the ambitions of TOR whilst in keeping with a growing economy such as Ghana’s was not strategically anchored in a future vision for running it as a serious profitable business, hence its current near defunct and financially broke natural order.

We have seen successive governments design strategies some of which have involved large financial investments and bailouts of the institution-the result of which is the current recovery levy which became a public debate with various analyses emerging on how the country could generate value from such an economic venture. Such debates and discussions that did not bring closure to the TOR debacle, have resulted in the establishment of institutions such as Bulk Oil Distribution Companies (BOST), Bulk Distribution Companies and Oil Marketing Companies with various responsibilities and duties being assigned to each of these institutions to ensure that the procurement, refinery, storage and distribution of petroleum products within the supply chain are comprehensive to prevent frequent shortages. Recent developments have prompted further discussions of the revival of TOR and how to make it an efficient economic entity. However the following factors must be considered prior to undertaking such investment. Read the rest of this entry »

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Exclusive: Nigeria favors local firms in $40 billion oil contract awards

Posted by Business in Ghana on April 23, 2014

By Emma Farge and Tim Cocks, Reuters

DAKAR/LAGOS (Reuters) – Nigeria has awarded most of its long-term oil contracts worth an estimated $40 billion a year to local companies, according to a confidential list seen by Reuters, meaning global traders need to partner with them to access crude from Africa’s top producer.

Global commodity traders, refiners and Nigerian dealers jockey at an annual tender for access to the OPEC member’s prized crude oil, which is easy to refine and produces more high-value fuels.

The contracts cover around 340 million barrels of oil, worth close to $40 billion annually based on current Brent prices, and run for a year, though they can be renewed. They were allocated to just 28 companies, versus around 50 in 2012, the last time they were awarded.

In a break with tradition, no contracts were given directly to global trading houses Glencore Xstrata (GLEN.L: QuoteProfileResearchStock Buzz), Vitol VITOLV.UL, Trafigura TRAFGF.UL or Gunvor, with only Switzerland’s Mercuria winning a contract, according to a list that four industry sources verified as accurate. Read the rest of this entry »

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Intertek Extends Oil and Gas Capabilities in Ghana

Posted by Business in Ghana on December 12, 2012

Issued on behalf of Intertek by The BIG Partnership

As part of its continued growth in Africa, Intertek, a leading global quality solutions provider, has invested in the expansion of its services to the petroleum industry in Ghana.

Intertek has opened a new technologically advanced calibration laboratory in its Takoradi Port facility, launched earlier this year to provide independent petroleum industry testing and inspection. The introduction of calibration services will build on this to serve a wider customer base in the growing market. Read the rest of this entry »

Posted in Oil and Gas, Uncategorized | Tagged: , , , , | 1 Comment »

Eni Makes First Commercial Oil Find Offshore Ghana

Posted by Business in Ghana on September 25, 2012

by  Eni S.p.A.
Eni has made the first oil discovery in the Offshore Cape Three Points (OCTP) block, located in the Tano Basin offshore Ghana, about 31 miles (50 kilometers) off the coast of Ghana. The discovery is relevant as it may have the potential for commercial development and confirms the importance of the block also in terms of the presence of oil, as well as natural gas and condensates.

Eni plans for the immediate drilling of other wells to delineate the size of the discovery and confirm the feasibility of commercial development. Read the rest of this entry »

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We Have To Track Down The Oil Thieves

Posted by Business in Ghana on July 23, 2012

By Patrick Dele Cole

It seems the Nigerian government is finally waking up to the financial impactillegal theft and sale of crude oil is having on our nation, as well as on the oil-producing Niger delta region.

Last month the minister of finance said she believes up to 17 per cent of the country’s production was lost in April. This means we could be losing up to 400,000 b/d.

About $9bn of revenue, equivalent to almost a third of the federal budget, is thus under the control of a criminal cartel with tentacles that stretch from the Niger delta, through the armed forces into the heart of organised crime and out into the rest of the world. Read the rest of this entry »

Posted in Oil and Gas, Uncategorized | Tagged: , , , | 1 Comment »

Sonangol: An Economic Octopus

Posted by Business in Ghana on July 18, 2012

By Tom Burgis, www.ft.com

A tale of two financing deals encapsulates the breathtaking expansion of Angola’s state-owned oil company. In 1989, when Angola was tearing itself apart in civil war, Sonangol, the state-owned oil company, struggled to secure a $60m six-month credit line. Nowadays, bankers say, it commands multibillion-dollar borrowing facilities that stretch over 10 years.

Respected abroad, it is all-powerful at home. From the sizeable stakes it routinely takes in oil ventures led by international groups and its growing portfolio of operatorships to its interests in infrastructure, banking and real estate, the literary prize it offers and Petro, the football team it owns, Sonangol is an octopus enveloping the economy. Many observers say it is a sovereign wealth fund in all but name, spreading petrodollars around the globe. “It’s like the tail wagging the dog,” says one international official in Luanda. “It’s not a state-owned oil company: it’s like an oil company that owns the state.” Read the rest of this entry »

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Rival to Nigeria as Prodigious Source of Crude

Posted by Business in Ghana on July 18, 2012

By Tom Burgis, www.ft.com

On the morning of Friday February 10, the oil world was abuzz. Cobalt International Energy, a midsized explorer backed by Goldman Sachs, had announced what was potentially one of the biggest discoveries of recent years.

The find in Angola’s Kwanza basin was a “game changer”, in the words of one veteran oilman. Cobalt’s well, drilled to a depth of 4.9km through a thick layer of salt, had found a reservoir the Texan explorer estimates to contain 1.5bn barrels of crude.

It confirmed a new energy frontier. If the so-called “pre-salt” region proves as rich as early indications suggest, it would set Angola on course to join the big league oil producers over the coming decade. Read the rest of this entry »

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Pipelines Bypassing Hormuz Route Open

Posted by Business in Ghana on July 15, 2012

By Javier Blas, http://www.FT.com

Saudi Arabia and the United Arab Emirates have opened new pipelines bypassing the Strait of Hormuz, the shipping lane that Iran has repeatedly threatened to close, in a move that will reduce Tehran’s power over oil markets.

The quiet opening of the pipelines comes amid heightened diplomatic tensions over Tehran’s nuclear programme. Iran’s oil production has fallen to its lowest in more than 20 years due to the impact of US and European sanctions, prompting Tehran to repeat its threats to shut down the strait, the conduit for a third of the world’s seaborne oil trade. Read the rest of this entry »

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IMANI Alert: Worrying Developments in Ghana’s Oil Sector

Posted by Business in Ghana on July 7, 2012

From IMANI Center for Policy & Education  www.imanighana.org

Many observers would have noticed a recent brief from Bloomberg about the investment prospects for Ghana’s offshore oil sector.

http://www.bloomberg.com/news/2012-07-05/ghana-oil-partners-to-invest-20-billion-in-oil-fields.html

From the very start IMANI has been somewhat less sanguine about developments in the nascent industry (see previous commentary on our website).  Despite the highly optimistic forecasts now and in the past, it is important to note the following facts: Read the rest of this entry »

Posted in Franklin Cudjoe, Oil and Gas | Tagged: , , , , , | 5 Comments »