The Ministry of Energy has given an assurance that Ghana’s upstream petroleum industry remains inspiring and attractive to investors, in spite of the exit of ExxonMobil.

It said ExxonMobil, which had interest in the Deepwater Cape Three Points (DWCTP) block in the Tano Basin, withdrew, citing investment requirements for developing the ultra-deep oil infrastructure and corresponding resource accumulation, even though the area has high prospects.

Giant basin

Speaking to the Daily Graphic yesterday, the Chief Director of the Ministry of Energy, Mr Lawrence A. Apaalse, explained that ExxonMobil’s area was just a minute fraction of the entire segment of vast basins across the country’s coastline, stretching more than 5,000 metres in depth.

He said Ghana’s basins held great prospects, and that “the reason for the exit, ExxonMobil says, is not that there is no hydrocarbon deposit in the DWCTP block; oil exists, but economically, the geo-bodies are not huge enough to warrant investment, considering the water depth”.

Ultra-deep & Kosmos Energy

Mr Apaalse said the company attributed its withdrawal to the huge cost of investment and the ultra-deep nature of the block.

“Withdrawals are normal industry practice, and in the case of the country’s premier field, Jubilee, the initial company allocated the block left, citing similar reasons.

“However, when Kosmos Energy came with the technology and took the same block, it made a huge discovery,” he said.

Mr Apaalse said in the case of Jubilee, after the discovery by Kosmos Energy, it invited Tullow Ghana to join in the investment, paving the way for global majors and giants to enter the country and things were going very well.

Scientific data

While emphasising that developments such as the exit of ExxonMobil happened in the industry, the chief director said what was important in the current situation was the continued promotion of the DWCTP block and other areas of the country’s upstream sector to attract more investors.

He said even though ExxonMobil was exiting, it would leave behind a lot of scientific data which could be used to better model the basins and make better packages for the second round of licensing or for direct negotiation with prospective investors.

COVID-19 angle

Sharing his perspective on ExxonMobil’s exit, the Executive Director of the Institute of Energy Security (IES), Nana Kwesi Amoasi VII, said he was not surprised, considering the ravaging nature of the COVID-19 pandemic.

He said though the withdrawal of the company was expected, more needed to be done to promote the prospects of the country, which were good.

Background

ExxonMobil acquired rights in 2018 to explore the ultra-deepwater block DWCTP.

The associated petroleum agreement was ratified in April 2019, leading to the opening of a venture office in the country in June, 2019 to undertake exploration activities.

The company, which has the controlling interest and was the operator, entered into an agreement to licence data from a multi-client seismic survey over a 3,300 square kilometre area covering the DWCTP block.

Once the seismic programme was completed, ExxonMobil, together with its partners — GNPC and GOIL Offshore Limited — was to evaluate the potential for drilling its first exploration well in the country.

 

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