General News Thursday February 11, 2016
Source: Classfmonline.com
Source: Classfmonline.com
The $7 billion OCTP
Sankafa gas deal between the Government of Ghana and Italian oil firm ENI is
bloated by at least $2 billion, out of which some Ghanaian government officials
will cut their kickbacks, the Minority in parliament has alleged.
“As has been stated
earlier by the communications directorate of the NPP, it does appear that the
contract is bloated by between 2 and 3 billion US dollars to the disadvantage
of Ghana,” the Minority said at a press conference in Parliament on Thursday
February 11 addressed by William Owuraku Aidoo, MP for Afigya Kwabre South and
member of the Mines and Energy Committee of the House.
The Minority wondered
why the Government of Ghana would bend backwards to “sprinkle such quantum of
roses in the way of ENI and Vitol.”
“In doling two
billion dollars out, God knows how much somebody in government will be taking
as kickback… The agreement stinks, it is a rip off and cannot be allowed,” the
Minority said.
The OCTP Integrated
Oil and Gas Project includes the combined development of the Sankofa Main,
Sankofa East, Gye Nyame, Sankofa East Cenomanian and Sankofa East Campanian
fields. The former three are non-associated gas fields while the latter two are
oil fields. The development of the fields started in January 2015.
The fields are
located within the OCTP block in the Tano Basin, at water depths ranging from
600m to 1,000m and approximately 60km off the coast of Ghana. The area covered
by the fields is approximately 694km².
Eni's subsidiary Eni
Ghana Exploration and Production is the operator of the block and holds a
majority stake of 47.22% in the same. Vitol Upstream Ghana holds a 37.78%
interest in the block and state-owned Ghana National Petroleum Corporation
holds a 15% interest, with an option to further increase its share by an
additional 5%.
The overall
investment on the project is estimated to reach $7bn. The World Bank is
providing a partial risk guarantee for the project.
OCTP reserves and
production
The offshore fields
are estimated to hold approximately 1.5 trillion cubic feet (tcf) of gas and
approximately 500 million barrels of oil. The reserves are expected to
continuously feed Ghana's thermal power plants for more than 20 years.
Oil production from
the project is expected to start in 2017 and peak at 80,000 barrels of oil a
day in 2019, whereas gas production is expected to start in 2018, with a daily
production capacity of 170 million cubic feet. This would be enough to generate
an additional 1,100MW of power for Ghana.
Ghana's OCTP
development details
The development plan
calls for the installation of subsea production systems, in addition to
flowlines and risers connected to a leased floating, production, storage and
offloading (FPSO) vessel.
The contract for the
chartering, operation and maintenance of the FPSO was awarded to Yinson
Holdings in January 2015. The charter period is for a term of 15 years with an
option to extend it by five more years. The contract value is currently
estimated at $2.54bn, but will increase to $3.25bn if Eni opts for the
additional five-year chartering extension.
OCTP FPSO details
The OCTP FPSO will be
converted from the Yinson Genesis tanker (formerly Ulriken) which, Yinson
Holdings acquired from Golden State Petro in October 2014. It will have a
storage capacity of 1.7 million barrels, oil processing capacity of 58,000
barrels a day, gas injection capacity of 150 million standard cubic feet a day
(Mmscfd), and maximum future gas-export capacity of 210Mmscfd.
OCTP gas and oil
export facilities
Gas from the fields
will be processed in the FPSO and transported via a pipeline to onshore
gas-receiving facilities located near the village of Sanzule in the western
region of Ghana. The gas will further be compressed and injected into the
Western Corridor Gas Pipeline and supplied to domestic industrial customers.
Crude oil will be stored in the FPSO and will be supplied to international
markets by means of tankers.
Ghana's Ministry of
Energy has further agreed to enhance the gas transmission system with
compression stations and connections to industrial users, to complement the
OCTP project.
Discovery and
drilling of the Offshore Cape Three Points fields
The Sankofa field was
discovered in September 2009, with the drilling of the Sankofa-1 well in a
water depth of 866m and to a total depth of 3,704m. It encountered high-quality
reservoir sands containing 36m of net oil and gas.
The well is situated
approximately 35km east of the Jubilee fields.
The field was further
appraised in April 2011 by drilling the Sankofa-2 well at a water depth of
864m. It flowed 29.5Mmscfd of high-quality gas and 1,000boepd of 52° API
condensate during test. It confirmed the presence of 35m net gas and condensate
sands of the Cretaceous age.
The Gye Nyame field
was discovered in July 2011 by drilling the Gye Nyame 1 well. The well was
drilled to a total depth of 3,349m at a water depth of 519m and encountered
significantly thick gas and condensate sands. The field is located 16km east of
the Sankofa field.
The Sankofa East
field was discovered by drilling the Sankofa East-1X well in September 2012.
The well was drilled to a total depth of 3,650m in 825m of water, and
encountered 28m of gas and condensate and 76m of gross oil pay in cretaceous
sandstones. It produced about 5,000 barrels of high-quality oil a day during
test.
The Sankofa East 2A
well, the first appraisal well of the Sankofa East, was drilled in January 2013
to confirm the extension of the oil accumulation in the Cenomanian sequence. It
was drilled to a total depth of 4,050m in water depth of 990m and encountered
23m of gas and 17m of net gas, as well as 32m of net oil in cretaceous sands.