Energy & Utilities
From The Report: Ghana 2020
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The Ghanaian energy sector has undergone transformative changes in recent decades. When Ghana made its first discovery of deepwater oil and gas in 2007, biomass was the largest component in total energy consumption. The subsequent exploitation of this new hydrocarbons resource, combined with a national drive towards electrification, saw a significant reduction in the importance of biomass as an energy input. Ghana has one of the highest electrification rates in sub-Saharan Africa. A recent drive to develop electricity infrastructure has brought the period of unstable supply and raised installed generation capacity to an end. However, this development brought its own challenges: oversupply in the system resulted in the government paying for power it did not utilise, leading to contract renegotiations with private sector power producers that threaten to undermine investor confidence. This chapter also contains interviews with John Peter Amewu, Minister of Energy; and Kevin Okyere, CEO, Springfield Group.

Articles from this Chapter

Overview

Period of growth: Oil and gas infrastructure continues to develop as companies explore onshore and offshore potential
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The decade from 2009 to 2019 was highly transformative for the Ghanaian energy sector. When the nation made its first discovery of deepwater oil and gas in 2007, biomass was the largest component in its total energy consumption. The subsequent exploitation of this new hydrocarbons resource, combined with a national drive towards electrification, saw a significant reduction in the importance of biomass – mostly firewood that was historically used to heat homes and small businesses – as…

Interview

Forward looking: John Peter Amewu, Minister of Energy, on improving investor confidence and increasing production
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Interview:John Peter Amewu How successful has the oil block licensing round been in attracting foreign investment? JOHN PETER AMEWU: This was the first time in our history that we engaged in a competitive licensing round for our oil blocks. It was preceded by a licensing round in which several blocks were awarded without proper structures and regulations in place, which resulted in their underperformance in terms of productivity. The evaluation process for bidders is now a lot more transparent,…

Analysis

Fresh approach: A new competitive bidding system aims to increase transparency and improve regulation across the sector
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For many years, commercial agreements made between Ghana and oil companies were reached through direct negotiations. This open-door policy was useful in the early stages of the development of upstream oil and gas industry; it allowed the government to rapidly build momentum in the sector. However, as policymakers began to look to the long-term development of its resources, they came to the conclusion that a more transparent and better regulated process was needed. The new competitive bidding…

Analysis

Local participation: Domestic engagement to increase across the value chain as ambitious targets are set for 2020 and beyond
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Ghana’s recent competitive bidding round for offshore oil blocks garnered considerable foreign interest. Applications from global players, such Italy’s Eni, helped to boost investor confidence in the domestic oil and gas industry. However, an increasing foreign presence runs counter to a competing ambition: Ghana has long worked to boost local participation across the petroleum value chain, first introducing a local content policy for the sector in 2010. A target of 90% Ghanaian content…

Interview

Lighting the spark: Kevin Okyere, CEO, Springfield Group, on the role of local firms in upstream development and deepwater exploration
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Interview:Kevin Okyere In what ways will the latest discoveries in the Deep Water West Cape Three Points block impact the country’s upstream market? KEVIN OKYERE: The most recent discoveries in the Deep Water Tano Cape Three Points block are significant and show that Ghanaians and Africans can successfully operate deepwater assets, as our company was the first on the continent that drilled in deep water and found hydrocarbons. Indeed, we made a number of discoveries in the block before…

Overview

Power moves: Drive to develop electricity infrastructure ends period of unstable supply, as government moves to update contracts
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Ghana has one of the highest electrification rates in sub-Saharan Africa, with more than 70% of rural areas and 95% of urban dwellers having access to electricity. A recent drive to develop the country’s electricity infrastructure has brought to an end a period of unstable supply and raised installed generation capacity to 4780 MW as of the outset of 2019. However, this development brought its own challenges: oversupply in the system resulted in the government paying for power it did not…