IMANI has poor understanding of petroleum economics - Energy Minister

The Energy Minister, Mr. John Peter Amewu, says the analysis of public advocacy think-tank IMANI Ghana
in respect of the plan of development submitted by Aker Energy and on behalf of all the contracting parties in the Petroleum Agreement (PA) covering the Deep Water Tano/Cape Three Points (DWT/CTP) contract area, was simply meant to alarm Ghanaians that the country risk losing a potential of $30 billion failure to negotiate a new petroleum agreement.

According to the Energy Minister, IMANI Ghana simply multiplied the assumed price of $65 per barrel by the estimated discoveries to contain gross contingent resources of 450 million barrels of oil equivalent (mmboe).

“This exposes the weaknesses in IMANI’s analyses as well as its poor understanding of petroleum economics. IMANI wants us to believe that all the 450million barrels of oil equivalent will be produced but fails to explain how that can be”, he chided.

Mr. John Peter Amewu explained that the 450 million barrels of oil equivalent are gross contingent resources, which are the potential resource available all of which cannot be recovered under current technology.

He reiterated that “in Ghana, our average crude oil recovery rate is 25%. At this rate, the field value will be estimated at $7.3 billion assuming a price of $65 per barrel; thus it cannot be $30 billion as estimated by IMANI”.

“IMANI tried to alarm Ghanaians about a potential loss of $30 billion to the country if the government failed to negotiate a new petroleum agreement with new terms with the DWT/CTP partners. This is absolutely false”, he stressed.

The Energy Minister again mentioned that President Akufo-Addo and his government mentioned that they are working with Aker Energy to enhance oil recovery mechanism to achieve a recovery rate of 40%, which will be the highest in Ghana’s oil and gas history and which occurrence will appreciate the value to $11.7 billion.

“This will be a significant gain for both Ghana and the partners”, he stated in the media briefing at the Ministry of Information Conference room on Friday 26th April 2019.

He added that the “Aker Energy, on behalf of its partners announced after a successful appraisal of the Pecan Field discovery, a significant oil find as captured below: based on existing subsurface data from seismic, wells drilled and an analysis of the Pecan -4A well result, the existing discoveries are estimated to contain gross contingent resources (2C) of 450 – 550 million barrels of oil equivalent (mmboe)”.

IMANI at a recent public advocacy program challenged what it says were various acts of omissions on the part of the Government of Ghana in respect of the plan of development submitted by Aker Energy and on behalf of all the contracting parties in the Petroleum Agreement (PA) covering the Deep Water Tano/Cape Three Points (DWT/CTP) contract area.

But the Energy Minister John Peter Amewu on Friday April 26, 2019 described the claims by IMANI as total falsehood.

In providing some background information on the agreement, Mr. Amewu said the PA covering the DWT/CTP contract area operated by Aker Energy was executed on 8thFebruary, 2006 between the Government of Ghana -GNPC, AMERADA HESS Corporation, Lukoil and FUELTRADE subsequently farmed in 2015.

He announced that there was no basis for a new petroleum agreement as claimed by IMANI because the work that was done by Aker Energy formed part of an appraisal programme based on the existing petroleum agreement.