Ghana’s oil production outlook is hanging in the balance amid the delay of the Pecan Oilfield development.
The Pecan Oilfield has come under dispute since Russian invasion of Ukraine.
According to Fitch Solutions, Aker Energy has been hesitant to put forward its updated Plan for Development to the Ghanaian government and commit to Final Investment Decision (FID), whilst Lukoil is involved in the project as the risk of sanctions levied on Russian oil and gas companies that could limit Aker’s ability to work with Lukoil and interfere with operations at the field.
The Pecan field, which is part of the Deepwater Tano Cape Three Points licence block, has estimated reserves of 334 million boe.
It is operated by Aker Energy, who maintains a 50% stake, while the other partners include Russia-based Lukoil (38%), Ghana National Petroleum Corporation (GNPC) (10%), and Fueltrade (2%). The development of the field has faced a variety of headwinds over recent years such as concerns over the capital cost of the project and the size of GNPC’s stake. However, the key barrier since February 2022 has been the participation of Lukoil, Fitch Solutions pointed out.
“Due to the Russian invasion of Ukraine, Aker Energy has been hesitant to put forward its updated Plan for Development to the Ghanaian government and commit to FID whilst Lukoil is involved in the project as the risk of sanctions levied on Russian oil and gas companies could limit Aker’s ability to work with Lukoil and interfere with operations at the field”.
Aker will not surrender oil field to Ghana government
Chief Executive Officer of Aker, Øyvind Eriksen, noted that development plans would not be passed to Ghanaian authorities until Lukoil’s participation was resolved.
To overcome this hurdle, Aker has recommended that Lukoil divest their share.
As of February 2023, the latest update on the dispute indicates that Aker is continuing a dialogue with Lukoil and the Ghanaian authorities to come to a solution and has not put the project itself on hold, instead just delaying their development plans.