We do not oppose unitization; we working with government, partners – Eni, Vitol
Oil firms, Eni and Vitol say they do not oppose unitization but rather working with the Ministry of Energy, the Petroleum Commission and the Ghana National Petroleum Corporation to find a mutually acceptable solution to enable Ghana capitalize on the Afina discovery.
In a statement, Eni said it has leverage on expertise in unitization, based on negotiation and execution of more than 130 unitization and pre-unitization agreements around the world including Australia, Algeria, Angola, USA, Croatia, Italy, Mozambique, Nigeria, Norway.
“Many unreliable and ungrounded data are circulating, which risk confusing the public. Eni is trying to find out if there is a viable solution that could be beneficial to all parties. The timing for finding a viable solution is driven by the goodwill of the parties to share data and cooperate”, the statement further said.
“We have recently been able to work on the data thanks to the intervention of the Ministry of Energy and delivered our analysis in the direction of finding a viable solution regarding the potential optimization of the recovery of oil reserves”, it added.
Continuing, the oil firm said unitization is appropriate when a hydrocarbon accumulation straddles a contract area boundary or hydrocarbons from one contract area migrate into the other contract area or hydrocarbons are commercially producible on both sides of the contract area boundary.
“In principle we are not opposed to unitization, but this needs to follow an appropriate, shared work programme and evaluation process to assess the elements listed above before taking decisions in the interest of all parties. This entails an appraisal programme of the Afina area including (but not limited to) production and interference tests in order to understand the potential benefit that a unitization of the Sankofa field and the Afina discovery could deliver.”
In any case, the statement explained that parties to a unitization agreement have to contribute to the costs and liabilities deriving from the development and production of hydrocarbons, related facilities, and other expenses, adding “in order to have a right to the hydrocarbons produced and in proceeds from the production, each party must first pay its share of the costs of producing hydrocarbons from the unitized field.”
“We are confident that the analysis and the resulting report will allow the parties to progress discussions toward an agreeable, commercial solution of the matter”, it added.
On Offshore Cape Three Points (OCTP)
- OCTP project has reserves for 500 million barrels of oil in place, and 40 billion m3 (270 million barrels of oil equivalent) of Non-Associated Gas.
- Sankofa reserves have been proven through multiple appraisal wells that assessed the potential production from original discovery. These reserves represent the base for the development and production plan that defines the amount of investment needed to put those reserves in production, and from which revenues for the different parties are estimated.
- OCTP project Operator and partners have invested so far 6 B$ with a total estimated full life expenditure of $10.6bn (including EXPL, CAPEX, OPEX, ABEX, as per PoD), the largest single investment in Ghana, with a total expected revenues of $8.1bn pertaining to GoG (as per PoD):
- fiscal take – $2.8bn
- royalties – $1.6bn
- GNPC entitlement – $3.7bn
- All figures reported are taken from PoD approved by GNPC, Ministry of Energy and Parliament.
- As of today Government of Ghana enjoyed a cash flow of $625m.
- OCTP project has met all deadlines set with record time-to-market, 3 months ahead of schedule, (PoD approval 12/2014, first oil 05/2017), delivered consistently hydrocarbons in line with PoD approved scheme honouring contractual obligations.
- Overall cumulated oil production is 50 million barrels as of April 2021. (Total Condensate production 6.74 million barrles (including SNKE-2A); non associated gas (NAG) production 120.01 Bscf (without SNKE-2A); total NAG production 144.46 Bscf (including SNKE-2A)
- The performance of Eni on Sankofa field and its reliability are insightful of the reliability of the initial hypothesis made on reserves and investment needed, and reflect the reliable approach consistently applied through the world according to best industry standard.
- The project allows Ghana to save ~45% of energy cost or 1.2B per year and it represents a stable energy source to fuel power sector for over 20 years
- OCTP’s gas production and treatment have been both consistently exceeding daily nominations and adapting to frequent change of demand on a daily basis, covering other sources’ shortfalls.
- This flexibility toward demand is only possible in a dedicated non-associated gas project such as OCTP, and it is combined with the extreme reliability of the ORF facility (99+% uptime, versus 95% high performance industry benchmark).
- The Sankofa field has the capacity to increase gas production to 260 MMScfd and potentially further to 300 MMScfd.
- The ability to consistently supply gas with high level of flexibility, to increase production to nearly double current production and the optimal performance of the ORF facilities confirms Eni Ghana’s ability to support the development of Ghana’s energy sector.
Source: Joy Business
Extranewsgh.com is not responsible for the reportage or opinions of contributors published on the website. Read our disclaimer.
Send Your News Stories and General Inquiries to firstname.lastname@example.org or Whatsapp: 0206386139