Interview: Joe Mensah
To what extent have low oil prices impacted the country’s energy industry?
JOE MENSAH: The drop in export revenues has obviously had significant implications for Ghana, but the country has been somewhat less impacted than other producers. The breakeven price, for example, is quite low, at around $30, and Ghana is very competitive when it comes to lifting costs. This means that capital expenditures have not been substantially affected. There is, of course, still room to improve hedging and further limit the impact of this sort of volatility.
What will be the focus of exploration and production activities in Ghana for the near term?
MENSAH: The development of the Tweneboa, Enyera and Ntomme (TEN) fields will drive the upstream sector over the next 12 months. Therefore, as our priority, it is taking up the majority of our budget in 2015. The fields, which we are developing with our consortium partners, including Tullow Oil, Anadarko, Ghana National Petroleum Corporation and Petro SA, are currently on track to start producing by 2017.
The TEN fields have deposits of both oil and gas, and, under the initial plan, we expect to develop total reserves of up to 300m barrels of oil equivalent. Following the experience of developing and operating the Jubilee field, there is a lot of attention being paid to ensuring that deadlines and production targets are met. However, things are proceeding on schedule and on budget, which is obviously encouraging.
Ghana’s oil production has had a relatively good year, with output around 100,000 barrels per day. Nonetheless, the TEN fields should provide a welcome boost to production volumes.
To what extent is infrastructure currently able to handle output from new fields?
MENSAH: Given that Ghana’s oil and gas sector is, in many ways, still in the early stages of the learning curve, particularly compared to places like Nigeria, there is a rush to ensure sufficient infrastructure capacity for increased production volumes of offtake. Expanding infrastructure is not necessarily easy. It requires a consensus among all the stakeholders on matters of equipment and strategy, for example. However, things are now up and running,as evidenced by the commissioning of the Atuabo Gas Plant.
Having adequate infrastructure is obviously important to ensure that the development of hydrocarbon fields proceeds smoothly. This is illustrated by the impact that the compressor breakdown had on production earlier in 2015. As gas production from the TEN fields increases, there will be a need to handle the flow with new pipelines and processing plants.
What efforts is Ghana making to develop a localised resource base for the sector?
MENSAH: Ghana has been very successful in this respect. Ensuring local employment, knowledge transfer and community support is crucial for any industry, and the oil and gas sector is no exception. The energy sector currently employs more than 7000 people locally, which is a significant step up from 2008 when it employed only 125.
However, further growth will take time. There is also a need to develop staff, invest in training, encourage knowledge transfer and, ultimately, ensure a qualified human resource base. This cannot be done overnight. Momentum is building, however. It begins with increasing the awareness of available opportunities and the skill sets needed. We are taking an active approach by offering internships for potential hires and seconding staff abroad for further training.
The TEN fields is a great example of how far things have come. A lot of vital production equipment, including anchor piles and equipment for the Floating Production Storage and Offloading vessel, is manufactured by local companies using local employees.
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