Oil price drop leads to cost saving in Ghana – Director

Mr Kwaku Boateng, the Director of Special Services at the Petroleum Commission, the upstream petroleum regulator, says the fall in the price of oil has spurred efficiency and cost savings in Ghana’s oil and gas industry.

Speaking at an oil, gas and power summit in Accra, the Director admitted that the fall in the price of oil has resulted in some challenges: a slowdown in activity, fewer contracts, fewer jobs and smaller margins as contract sums are being slashed.

However, he said the adverse effect on jobs in Ghana has not been huge, partly because of the Offshore Cape Three Points and the TEN projects which have gone on unhindered.

Mr Boateng said while many international oil companies have slashed their exploration budgets, some small oil companies by as much as 70 per cent due to the price decline and difficulty in attracting capital, the price drop has encouraged prudent and cost-efficient operations in Ghana’s petroleum industry.

“Looking at the two recent developments ongoing, especially the OCTP, we have seen significant improvement on the part of the operator in saving cost in many areas; from rig contracts, FPSO construction, development of subsea infrastructure, vessel supply and others.

“We have seen tremendous cost savings in these areas,” he said.

Whereas typically four or more patrol boats are used around a rig, this era of low crude prices has seen one operator in Ghana managing with as few as two patrol boats.

“Any dollar saved from these contracts is very good for the country,” Mr Boateng said.

By Emmanuel Odonkor