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Business News of Wednesday, 28 April 2021

Source: business24.com.gh

Coronavirus pandemic stalls US$325 million petroleum projects in 2020 - PIAC report

The coronavirus pandemic stalled upstream petroleum projects worth US$324 million that were in the exploratory and appraisal stages, the Public Interest and Accountability Committee (PIAC) has revealed in its 2020 annual report.

The petroleum revenue watchdog said the companies were due to undertake various drilling campaigns; acquisition and interpretation of seismic, geological and geophysical data; well planning; procurement tender; and mobilisation before the onset of the COVID-19 pandemic.

“Since then, project execution, planning, risk management as well as associated preparatory activities have stalled, with implications for cost and time overruns,” the committee said.

In addition to the exploratory projects, Aker Energy in March 2020 also postponed its development activities in the Pecan Field project, valued at US$4.4 billion.

The company was scheduled to submit a revised Plan of Development (PoD) and make a final investment decision on the field. However, due to the effects of the pandemic on the oil and gas industry globally, it requested a suspension and postponement of the development activities, PIAC said in the report.

Other projects that were affected by the pandemic are the Central Tano Block and the Deepwater Cape Three Points West Block. In the case of Central Tano, AMNI, the operator, had to reschedule its planned drilling campaign from the second to the fourth quarter of 2020.

At the same time, ECO Atlantic, the operator of the Deepwater Cape Three Points West Block, suspended all exploration drilling preparatory activities, despite commencing the process of rig tendering, tangibles contracts, and support services contracts.

Eni, the operator of the Cape Three Points Block 4, indicated to the Petroleum Commission its plan to postpone the drilling of the Eban-1X exploratory well to the first quarter of 2021, the report disclosed.

The pandemic also forced GOSCO, the operator of the offshore South West Tano Block, to put on hold all exploration drilling preparatory activities, contracting of key services, and plans to secure a rig.

Additionally, the appraisal programmes of Eni’s Akoma-1X, AGM Petroleum’s Nyankom 1X and Kyekyen 1X, and Springfield’s Afina-1X discoveries also faced significant delays.

“Generally, there was a freeze on the work programmes, and a decision [was taken by the regulator] to restore the initial period or extensions lost for all companies whose agreements would have otherwise expired in 2020 but for the COVID-19 pandemic,” PIAC stated.

“There was also a freeze or cancellation of critical operations and maintenance works on production facilities scheduled for the year, due partly to the skeletal workforce operated by most companies in compliance with approved COVID- 19 protocols,” it added.

The year 2020 saw a reduction in oil production after three years of consecutive increases. Production declined by 6.3 percent to 66.9 million barrels from the 2019 volume of 71.4 million barrels.

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