Energy & Utilities
From The Report: Ghana 2014
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Roughly seven years after the discovery of oil, Ghana’s hydrocarbons sector has seen significant growth in terms of both production and infrastructure, yet the industry is still very much a work in progress. New projects are being ramped up to develop the sector, including for the downstream segment. Ghana’s proven crude oil reserves were estimated at 660m barrels as of January 2013, which could be higher as exploration is still ongoing. In the near term, the country has begun to shift to optimising the development of its hydrocarbons in a sustainable manner. It also aims to finalise linkages with associated sectors, including the power industry – an objective that the planned gas processing plant, upon completion in late 2014, should start to fulfil. While financial and technical bottlenecks have hampered the pace of refinery activity and new electricity generation, should these challenges be resolved, the country could emerge as not only an exporter of crude, but also as a downstream petroleum products manufacturer and a provider of surplus electricity to the regional power pool.

This chapter contains interviews with Kwesi Botchwey, Chairman, Ghana National Gas Company; Abdalla Salem El-Badri, Secretary-General, OPEC; and Kirk Koffi, CEO, Volta River Authority.

Articles from this Chapter

Overview

The country has become a major regional upstream producer
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Roughly seven years after the discovery of oil, Ghana’s hydrocarbons sector has seen significant growth in terms of both production and infrastructure. Yet the industry is still very much a work in progress, with potential for investment across the value chain. The past few years have been busy ones, as the country needed to create an enabling environment for the sector from scratch, including a new regulatory framework, new agencies and new funding. All this was done with an eye to attracting foreign expertise and capital to fast track the development of the first significant commercial discoveries and generate export earnings. Increasingly,…

Analysis

Changes on the horizon: A new gas processing plant will provide feedstock and boost efficiency
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Targeted to start running by the end of 2014, the Atuabo gas processing plant (GPP) is arguably Ghana’s most anticipated energy project. Once up and running, the project will provide a much-needed source of natural gas feedstock for the country’s power plants – a requirement thrown into relief following the disruptions experienced by the West African Gas Pipeline (WAGP) in 2013. The Atuabo GPP will also potentially allow for improved efficiency at the Jubilee field, where gas has until now been re-injected or, to a more limited extent, flared. Local content has also become a hot topic for energy-related industries around the world, and…

Interview

OBG talks to Kwesi Botchwey, Chairman, Ghana National Gas Company
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Interview:Kwesi Botchwey To what extent will the Ghana gas project impact the role of Atuabo in the local energy industry? KWESI BOTCHWEY: Takoradi has become a hub in Ghana following the growth of the offshore oil and gas industry. Not only are Accra-headquartered oil and gas companies opening offices in Takoradi, but other industries have taken notice of its dynamism as well, with housing, real estate and hotels continuing to develop. The natural constraints of Takoradi mean that the development…

Interview

OBG talks to Kwesi Botchwey, Chairman, Ghana National Gas Company
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Interview:Kwesi Botchwey To what extent will the Ghana gas project impact the role of Atuabo in the local energy industry? KWESI BOTCHWEY: Takoradi has become a hub in Ghana following the growth of the offshore oil and gas industry. Not only are Accra-headquartered oil and gas companies opening offices in Takoradi, but other industries have taken notice of its dynamism as well, with housing, real estate and hotels continuing to develop. The natural constraints of Takoradi mean that the development…

Analysis

With a good track record for policy stability, the government is looking to increase local participation in projects
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The governing legislation for Ghana’s hydrocarbons sector was first passed in 1984, at a time when production was minimal. As a result, the discovery of far larger reserves and production potential in 2007 necessitated an overhaul of the country’s regulatory framework to accommodate everything from new revenues to environmental oversight. “Collectively, the legislation encompassed only around 29 regulations, which served its purpose at the time when the country was not viewed as an energy producing nation. But now that we are, more regulation is needed, especially around health and safety and local job creation, as Ghana no longer wants…

Analysis

Appropriate regulations and infrastructure will be necessary as demand is set to grow domestically
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Previously dominated by multinational firms, Ghana’s oil distribution and retail sector, consisting mainly of bulk delivery companies (BDCs) and oil marketing companies (OMCs), has seen a dramatic rise in domestic participation in recent years. Prior to having its own crude processing facilities before the commissioning of the Tema Oil Refinery (TOR) in 1960, Ghana was fully dependent on imports of refined petroleum that tended to be distributed internally by the local branches of multinationals such as Shell, Texaco, BP, Mobil and Total, with the state-owned Ghana Oil Marketing Company serving as the lone local representative When the National…

Analysis

Shared geological structures across the Atlantic are leading to interesting prospects
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Discoveries of new elephantine deposits of hydrocarbons in South America and East Africa in recent years have tended to overshadow developments along Africa’s oil-producing Western coast, but new discoveries in deep offshore areas along the coast of countries like Ghana, Nigeria, Gabon and Equatorial Guinea offer significant promise. While OPEC’s two sub-Saharan members, Nigeria and Angola, still dominate production on the continent, the International Energy Agency (IEA) forecast a long-term decline in sub-Saharan Africa’s non-OPEC output from 2.3m barrels per day (bpd) in 2012 to 2.1m bpd by 2035, due in large part to maturing onshore production…

Interview

OBG talks to Abdalla Salem El-Badri, Secretary-General, OPEC
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Interview:Abdalla Salem El-Badri What effect will the growth of North American and non-OPEC production have on OPEC output? ABDALLA SALEM EL-BADRI: North American tight oil production has clearly been the main force behind non-OPEC supply increases in recent years. These are all welcome developments: it is good for these countries in terms of their economies and jobs, adds depth to global supply, aids market stability and provides further proof to consumers that the world is not running out…

Analysis

New finds of shale oil and gas may mean a different picture for the global energy industry
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The single largest structural shift in the last decade in global energy markets – emerging output of shale gas and oil in the US – is having a clear effect on African oil producers. A growing reliance on African exporters in the early part of the millennium, reaching a peak of 20.34% of US oil imports in 2007, has sharply reversed as newly accessible domestic sources of similar light, sweet crude in Texas and North Dakota have come online. And while a growing number of African markets are joining the ranks of Nigeria, Angola and Egypt as key liquefied natural gas (LNG) exporters, the reconfiguration of new US LNG terminals for export will…

Overview

Rich in natural resources, the country is working to expand and diversify its power supply
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As with any rapidly expanding economy, Ghana’s high GDP growth rates have gone hand-in-hand with increased industrial and household consumption, which in turn has pushed up demand for key utilities infrastructure, including water, power and sanitation. While its electricity provision ranks ahead of many of its regional peers, the country is expending significant amounts of capital and resources to ensure that its generating, transmission and distribution assets are able to meet future demand and also avoid being exposed to exogenous shocks. Fortunately, Ghana is endowed with resources such as natural gas, sun and water. These segments are attracting…

Analysis

An emphasis on IPPs is defining the sector
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According to the World Bank’s 2013 Ghana energy report, $4bn of investment is needed over the next decade to compensate for previous investment lags in power generation, transmission and distribution infrastructure. Estimates for annual power demand growth range from 8% to 12%, meaning there is certainly a market for new power generation. To avoid unduly impacting the government’s balance sheet, the country is turning to the private sector in the hopes of boosting independent power producers (IPPs). IPPs There are three IPPs operating in Ghana, contributing around 540 MW of the country’s nearly 2500 MW of installed power generation capacity.…

Analysis

Power Africa aims to boost private sector investment in electricity
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Infrastructure development is of the utmost importance to fuel sub-Saharan Africa’s economic growth. Nowhere is the need for expanded infrastructural capacity more important or more visible than in the area of power production, particularly in generation and distribution. The hum of diesel generators from Lagos to Nairobi is a constant reminder of the poor state of the continent’s electricity networks. Capacity For the entirety of sub-Saharan Africa’s 48 countries (with a total population of approximately 800m) there are 68 GW of installed generation capacity, roughly equivalent to that of Spain (with a population of around 47m). Of the…

Interview

OBG talks to Kirk Koffi, CEO, Volta River Authority
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Interview:Kirk Koffi How big an impact do you expect the Ghana Gas Project to have on power generation? KIRK KOFFI: Ghana has installed thermal capacity of 1200 MW, requiring 280m standard cu feet per day (scfd) of gas. Our contractual quantity with Nigeria is 120m scfd, of which we have received an average of 55m scfd since January 2014. On this basis, the deficit in supply is over 220m scfd. Insufficient gas supply from Nigeria means we have had to rely on crude oil, at twice the cost of…