Ghana gets nothing from sold $90m Saltpond oil

The Saltpond Offshore Producing Company Limited (SOPCL) has since 2002 lifted 800,000 barrels of crude oil estimated at 90 million dollars, but has not paid any dividend to the government.

The Saltpond oil fields, reactivated in 2002 by SOPCL after being abandoned by various prospecting companies since its discovery in 1970, currently produces between 50 and 100 barrels of crude oil a day from an initial 480 to 600 barrels.

SOPCL is owned by Eternit Universal Limited of Nigeria and Lushann Eternit Energy Limited of Houston which jointly have 55 per cent majority shares and the Ghana National Petroleum Corporation (GNPC) with 45 per cent shares.

Despite its investment, GNPC has never received any dividend, a situation attributed to SOPCL’s fluctuating fortunes.

A source in the petroleum industry told the Times that the poor financial situation of the company had led to some of its service providers seeking judicial intervention to have monies owed them paid.

According to the source one of such companies was Kingdom Holdings Limited whose vessel, M.T. African Waves, was providing storage tanker services for the SOPCL.

The source said to reduce its operating cost, SOPCL in 2008, purchased a new vessel, M.T. Bonsu “but failed to pay outstanding bills owed Kingdom Holdings Limited which has resulted in bad blood between the two companies”.

Giving an overview of the Saltpond oil field, the source said after years of abandonment, the GNPC conducted a number of geological and engineering studies to verify its viability.

As a result of the study, GNPC entered into an agreement in January 2000 with Lushann International Energy of Houston to reactivate the field, based on new prospects and the continuous escalating price of crude on the world market.

Out of this arrangement emerged a joint venture between Lushann Eternn Energy Limited and GNPC, leading to the setting up of SOPCL.

The source said when production started in 2002, SOPCL faced many challenges so only two out of the six wells were operated, which pumped between 480 and 600 barrels per day.

The source said if after eight years of operation, government had not received any dividend from the field, then government must watch out as Ghana had started producing oil from the Jubilee Field, adding that SOPCL should be able to pay some dividend to its minority shareholder, however little, to justify its investment.

Commenting on the issue, Jane Anaman, Administrative Officer of SOPCL said work was going on to make the wells produce more.

On the financial situation of the company, Ms. Anaman said every business owes in one way or the other, so it was no big deal that the SOPCL is indebted to some organisations.

She, however, said arrangements had been made with such companies to effect payment of its debts.

Mr. Edward Bawa, spokesperson for the Minister of Energy said it was impossible for a company which was not breaking even on its investments to pay dividends.

He said the government was monitoring the situation to ensure that the best was made out of the field for the good of the country.

The Saltpond field is located about 13 kilometres offshore Saltpond, in the Central Region.

The field was discovered by Signal Amoco Consortium which relinquished the concession but was eventually developed and exploited by Agripetco from October 1978 to early 1984.

Subsequently, Primary Fuels Incorporated acquired ownership in 1984 and operated it until July 1985 when it was transferred to GNPC.

The field experienced a continuous decline from 4800 BPD in 1978 to 750 in 1984, and then to 580 BPD by July 1985.

GNPC’s equity contributions to SOPCL include its assets at the oil field, comprising Mr. Louie Platform, seismic data, oil wells and studies on the oil field, all valued at 10 million dollars.

Source: The Ghanaian Times