Chevron To Acquire Ghana's Equity In West African Gas Project

Chevron Nigeria, one of the joint venture partners of the Nigerian National Petroleum Corporation (NNPC), has sent in a proposal to acquire Ghana National Petroleum Corporation's 16 per cent equity stake in the West African Gas Pipeline Company (WAPCO).

THIS DAY gathered that representatives of Chevron Nigeria were in Ghana recently to "make their proposals to the government" on taking up the GNPC's theoretical 16 per cent equity stake in WAPCO, which is the putative vehicle that would eventually sign any concession deal under the inter-governmental agreement on the gas pipeline.

Four countries are joint stakeholders in the project, which starts from Nigeria where the gas would be sourced.

The project involves a reserve of more than 40 trillion cubic feet of gas to be sourced from the Western Niger Delta of Nigeria to Efasu in Ghana, covering a distance of 800 kilometres and 100 -120 cubic feet of gas.

The cost of the first phase of the project has been put at about US$450 million. It was designed not only to create a ready source of fuel and energy supply to the sub-region, but also to create regional co-operation and unity.

The memorandum of understanding (MOU) for the project was signed in Nigeria in August 1999 with a consortium comprising the NNPC of Nigeria, GNPC of Ghana, SOBEGAZ of Benin republic and SOTOGAZ of Togo.

Shell Petroleum Development Company (SPDC) and Chevron were appointed by the four countries as the project developers.

Interestingly, Ghana's Presidential Adviser Charles Wereko-Brobby recently told the Chevron officials from Lagos that though his country would recommend 'unshaking' companies for the stake in GNPC, which he described as slow money, "the government would not be rushed into the deal."

Chevron's move at picking up the 16 per cent is aimed at increasing its pressure in the region, having picked up the WAPCO stake that was earmarked for Togo's owned SOTOGAZ. SOBEGAS of Benin owns another equity in the pipeline company.

Energy observers believe that Chevron's influence in Ghana diminished since its major rivals, Shell, started pitching for a bigger role in that country's oil industry.

Industry sources disclosed that Chevron wants to take advantage of the new government in Ghana to play a more prominent role.

Besides Chevron, other investors are also eyeing the Ghanaian oil industry because of its role as the anchor for the market.

Much has been invested by the equity holders in infrastructural development in a project designed to route gas from the Niger Delta in Nigeria to Benin Republic, Togo and Ghana in the first place.

It is hoped that the second phase would bring in Cote d'Ivoire as a supplier and consumer of gas-fuelled power generated from offshore fields.

Upstream, a major player in the energy industry, confirm that investors have cautioned that Ghana, though central in the stake, but without the corporate freedom to deploy resources with minimal interference from state owned monopolies, will scuttle the project.

The monoply is, however, being tackled by the new Energy Adviser to President John Agyekun Kuffor, Wereko-Bobby, who appears not to support the aspiration of GNPC as the major player.

He questioned: "Just give me one good reason why GNPC should hold equity in the pipeline? The gas is coming from somewhere else for use here, so why not the Volta River Authority, if anybody.

GNPC, he said, would not be involved in power generation of any description and should rather return to its core functions of arranging for seismic making that look beautiful and promoting it to the companies.