Energy experts have hailed plans by Ghana National Petroleum Corporation (GNPC) to acquire offshore fields to enable Ghana to own its petroleum projects.
Finance Minister Ken Ofori-Atta first hinted in the 2021 Mid-Year Budget Review that such a move will help accelerate exploration and production before the energy transition takes over and destabilises the country’s nascent oil and gas industry.
“Given the prevailing sentiments around energy transition, there is a strong possibility that Ghana may be left with stranded assets, unless we accelerate our exploration activities and develop a home-grown strategy to extract our fossil fuels,” Ofori-Atta said.
Speaking on the Energy 101 show on Asaase Radio, the petroleum economist Dr Theo Acheampong said GNPC has enough reason to proceed with the move to acquire the oilfield assets.
GNPC has always had a strategy of working towards becoming a world-class operator by 2027, he said.
Acheampong said documents issued by the national oil company in 2016 showed its resolve to achieve that objective through four growth pillars.
“They talk about building and expanding their capacity. They talk about growing and replacing reserves. They talk about efficient capitalisation, which is where the money bit comes in. And then they also talk about capitalising local content development,” Dr Acheampong said.
There is no gainsaying that the drift from fossil fuels to other, cleaner forms of energy will become the mainstay of global economies in the next 50 years, given the rapidity with which the trend is gaining ground.
Risking stranded assets
The situation is being spurred by certain multilateral funding organisations which are covertly restricting funding to new fossil fuel projects. Moreover, investment in oil and gas development is said to be on the decline, which will impact fresh investment.
This definitely will demand that emerging oil and gas economies, including Ghana, respond appropriately to safeguard their resources.
In such a scenario, Ghana’s underdeveloped resources could become stranded, making the energy transition a further threat to oil production in the country.
Oil industry players speak of the pressing need for proactive measures to forestall the nation’s resources from being left in a state that Ghana cannot exploit.
ExxonMobil left Ghana after three years of controlling the Deepwater Cape Three Points oil block, evidently in pursuit of lower-carbon-emission projects.
Experts say if GNPC had the capacity it would have explored these resources. Touching on the benefits that Ghana stands to derive from the acquisition, Dr Acheampong said he believes that the country will develop local capacity to exploit its own reserves.
The petroleum consultant Dr Yussif Sulemana, also speaking on Energy 101, said he believes the move to acquire a large stake in Ghana’s oilfields is timely, as the country has no choice other than to exploit its own resources at this time.
He urged the government to be strategic in deciding which moves to make, saying: “For me the reason [behind] whether to go ahead or not doesn’t come in. We don’t have a choice.”
Charles Ofori, policy lead for climate change and energy transition at the Africa Centre for Energy Policy (ACEP), said he believes that the government should not be in a hurry to acquire the offshore fields.
It must analyse the situation effectively before choosing which option to take, he said.
Meanwhile, the government is said to have approved the proposal by the GNPC, which is awaiting parliamentary approval.