Sankofa gas deal bloated by $2bn – Minority
The Minority New Patriotic Party (NPP) Caucus in Parliament on Thursday said the $7 billion Offshore Cape Three Points Sankofa gas deal between the Government of Ghana and the Italian oil firm ENI, was bloated by at least $2 billion.
“As has been stated earlier by the communications directorate of the NPP, it does appear that the contract is bloated by between two and three billion US dollars to the disadvantage of Ghana,” the Minority alleged.
Addressing a press conference in Accra, Mr William Owuraku Aidoo, MP for Afigya Kwabre South, alleged the inflation was to enable some government officials to get their kickbacks.
Mr Aidoo, who is also a Member of the Mines and Energy Committee, described the agreement as a rip-off which cannot be allowed.
“In doling two billion dollars out, God knows how much somebody in government will be taking as kickback. The agreement stinks, it is a rip-off and cannot be allowed,” the Minority said.
The NPP was at a loss why the Government of Ghana would bend backwards to “sprinkle such quantum of roses in the way of ENI and Vitol.”
It criticised the Term Sheets and Terms and conditions of the Agreement, saying it revealed “a horror tale of poor negotiations” with terms skewed against Ghana, while the contractors ENI and Vitol, benefit from incentives never offered in other previous local agreements.”
Mr Aidoo questioned the competence of the negotiators, and alleged further that “some corruption might have influenced the negotiators to enter into such a bad agreement.”
Mr Joseph Cudjoe, MP for Efia Constituency, said the Minority’s objection was the stance of all the Ghanaians who voted the 123 Minority Members to Parliament, and called on Ghanaians to reject the deal.
The Offshore Cape Three Points (OCTP) Integrated Oil and Gas Project include the combined development of the Sankofa Main, Sankofa East, Gye Nyame, Sankofa East Cenomanian and Sankofa East Campanian fields.
The former three are non-associated gas fields while the latter two are oil fields.
It is on record that the development of the fields began in January 2015.
The fields are located within the Offshore Cape Three Points block in the Tano Basin, at water depths ranging from 600m to 1,000m and approximately 60km off the coast of Ghana. The area covered by the fields is approximately 694km².
Eni’s subsidiary Eni Ghana Exploration and Production is the operator of the block and holds a majority stake of 47.22 per cent. Vitol Upstream Ghana holds a 37.78 per cent interest in the block and state-owned Ghana National Petroleum Corporation holds a 15 per cent interest, with an option to further increase its share by an additional 5 per cent.
The offshore fields are estimated to hold approximately 1.5 trillion cubic feet (tcf) of gas and approximately 500 million barrels of oil. The reserves are expected to continuously feed Ghana’s thermal power plants for more than 20 years.
Oil production from the project is expected to start in 2017 and peak at 80,000 barrels of oil a day in 2019, whereas gas production is expected to start in 2018, with a daily production capacity of 170 million cubic feet. This would be enough to generate an additional 1,100 megawatts of power for Ghana.
The development plan calls for the installation of subsea production systems, in addition to flowlines and risers connected to a leased floating, production, storage and offloading (FPSO) vessel.
The contract for the chartering, operation and maintenance of the FPSO was awarded to Yinson Holdings in January 2015.
The charter period is for a term of 15 years with an option to extend it by five more years. The contract value is currently estimated at $2.54 billion, but will increase to $3.25billion if Eni opts for the additional five-year chartering extension.
The OCTP FPSO will be converted from the Yinson Genesis tanker (formerly Ulriken) which Yinson Holdings acquired from Golden State Petro in October 2014. It will have a storage capacity of 1.7 million barrels, oil processing capacity of 58,000 barrels a day, gas injection capacity of 150 million standard cubic feet a day, and maximum future gas-export capacity of 210 million standard cubic feet per day.
Gas from the fields will be processed in the FPSO and transported via a pipeline to onshore gas-receiving facilities located near the village of Sanzule in the western region of Ghana.
The gas will further be compressed and injected into the Western Corridor Gas Pipeline and supplied to domestic industrial customers. Crude oil will be stored in the FPSO and will be supplied to international markets by means of tankers.
The Ministry of Energy has further agreed to enhance the gas transmission system with compression stations and connections to industrial users, to complement the OCTP project
Source: GNA