You are here: HomeNews2008 11 06Article 152682

Business News of Thursday, 6 November 2008

Source: Reuters

Norwegian billionaire seeks riches offshore Ghana

Aker ASA , the investment vehicle of Norwegian billionaire Kjell Inge Roekke, has won its first oil and gas exploration licence in its own name and aims to develop the block offshore Ghana using its oilfield services firms.

Norway's Aker said on Thursday it had been awarded the exploration block in a "promising province", where it pledged to carry out seismic surveys and drill a well in 2011.

Aker is best known as a holding company for firms, including engineering powerhouse Aker Solutions , that provide services to oil and gas companies. But Roekke has also dreamt of becoming an oil producer himself.

"We are traditionally known for offshore engineering and services but are gradually adding the licence-holder element -- and the Ghana acreage builds on that strategic move," Geir Arne Drangeid, executive vice president of Aker ASA, told Reuters.

Aker owns 57.7 percent of Aker Exploration , which holds licences off Norway and hopes to use the holding company's capabilities to secure competitive advantage.

Roekke's business model goes against a trend in the oil industry for producers to sell off service units and hire contractors for specific jobs.

Aker said the Ghana acreage, located near the Jubilee discovery in the Gulf of Guinea, will "generate exciting opportunities for several Aker companies."

"It's too early to be very specific," Drangeid said. "But if and when we discover hydrocarbons (oil and gas) and the project comes to the development stage we have the companies that can be involved throughout the field's life cycle," he added.

"Aker is able to cut the time span from identification of resources to production of first oil and time is money."

Drangeid said Aker Floating Production and Aker Solutions combined to develop storage, subsea equipment and engineering "in record time" in a recent project in India.

He stressed, however, that deals must be financially viable.

"It's not an automatic -- Aker companies have to bring the right technology and costs," he said in an interview.


The Jubilee discovery -- believed to hold between 500 million and 1.8 billion barrels of recoverable resources -- has made offshore Ghana a promising oil and gas prospect which Aker now wants to exploit, possibly with partners.

"This is one of the topics on top of our agenda and it will ultimately determine how we work in Ghana," Drangeid said about the prospects of engaging an outside partner.

"One route is taking on a bigger oil company and another is a smaller partner, which would involve more work for ourselves," he said, adding that talks with potential partners had begun.

Under the deal with the Ghana National Petroleum Corporation (GNPC), Aker will hold 85 percent in the South Deepwater Tano block covering 3,500 square km, the size of eight blocks offshore Norway and in water depths from 2,000 to 3,000 metres.

So far, Aker said it would invest $25-30 million in seismic surveys due to start in the first quarter of 2009. Drilling the first exploration well is planned for 2011.

Drangeid said Aker was not too concerned about dropping oil prices, which have halved since mid-year peaks, believing that in the long term more petroleum resources will be needed.

"We take a very long perspective...that the world will need more energy and with our technical expertise and competence we are in a good position to help provide it," he said.