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General News of Wednesday, 9 October 2002

Source: Reuters

Ghana attracts major oil firms

Oil majors are in talks with Ghana over exploring the West African country's deepwater potential, as fears of a war in Iraq add impetus for the U.S. to reduce reliance on Middle East supplies, its energy minister said on Mon-day.

"For years they wouldn't talk to us, now the major independents and majors are interested," said Albert Kan-Dapaah, Minister for Mines and Energy, in an interview on the sidelines of an oil conference in London.

"The majors are in exploratory talks with the Ghana National Petroleum Corporation," he said, declining to give any names and adding that the government was preparing new licensing for deepwater acreage.

Ghana is frontier oil exploration territory, never having pumped more than a few thousand barrels of oil, compared to its established neighbouring producers such as Nigeria, which can produce over two million barrels per day (bpd).

It has yet to make a major find, though Dapaah hopes to raise production to more than 100,000 bpd in the next five years, relying on a blockbuster discovery to rival those recently seen in Angola.

He said political tension in the Middle East, which holds two-thirds of world oil reserves, was helping Ghana's drive for foreign investment. "It is in the U.S. interest to diversify supply. We have not been approached by the (U.S.) government, but the independents (in Ghana) are American."

U.S. Secretary of State Colin Powell toured West African oil states Angola and Gabon last month to strengthen ties, with the world's biggest oil consumer expected to increase its dependence on imports to beyond 60 per cent by 2020.

So far only independent companies have signed exploration deals for offshore Ghana, with Houston-based Vanco Energy Company planning to invest $30 million, while Devon Energy Corp and EnCana Corp will jointly invest $56 million.

Dapaah told the IBC-organised conference on project financing in Africa that although the government was very confident oil would soon be struck, it was not looking to invest by itself because of the risk involved, while it was also hoping to get out of downstream operations.

Dapaay said a gasoline-making catalytic cracker had been added to its Tema Oil Refinery, which would increase its efficiency and enable it to meet domestic demand of around 60,000 bpd.

However, he said the government was looking to sell the refinery, as while in state hands the local population felt oil product prices should be related to income levels, so that the government was having to subsidise private oil consumption.

"Philosophically it's something we don't think the government should do. We just have to nurture (the refinery) to the level of attracting suitors," he said.

He said it would also be cheaper for the government to import electricity from the Ivory Coast, while a West African power pool would enable small countries to get power from the cheapest source.

"In most places the interconnection is there already. It would be very easy to extend it to Nigeria," he said.

Togo to drill oil soon

Lome, Togo (PANA) - A US petroleum firm, Hunt Oil International Overseas, will soon begin drilling oil off the Togolese coast, according to an agreement signed Monday in Lome between Hunt and Togo Hunt Oil Company representing US and Malaysian firms and the Togo government.
The deal sets out the rights and obligations of the two parties on operations related to the oil contract signed in April 2002 between them on production sharing. This concerns the joint exploitation, evaluation, development and production of hydrocarbon reserves.
Prospecting for oil in Togo started in 1997. Two years later the fields showed promising results, which led the two parties to sign an oil contract in 2002.
Togolese president Gassingbe Eyadema witnessed the signing by Togo Hunt's director general Christopher Stone and Togolese equipment and mines minister Andjo Tchamdja in the Togolese capital.
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