Gov’t sends the right signal – CEO, Ghana Upstream Petroleum Chamber

Last week, the government wrote to Eni and its partner VITOL as well as Springfield to withdraw the Unitisation directive imposed upon them. We spoke to the CEO of the Upstream Petroleum Chamber, David Ampofo about it and other matters of interest to the oil and gas industry.

Interview with BFT

Q: What do you think about the decision by the new administration to withdraw the unitisation directive?

A: A master stroke. There is excitement in the air already. The industry has been energised. We are once again looking for business activity to pick up. There will finally be movement on so many contracts that have been warehoused for years. The truth is that the industry has been at a standstill since 2020.

It should never have happened. We should not be where we are. We should be doing more. The Chamber worked hard to get the last government to do something about that directive but we were unsuccessful. We met with the new minister, Mr. John Jinapor, and he assured us of governments commitment to resolving the issue and he has kept his word.

Q: What does this mean for ENI?

A: Eni is a global leader and has made a number of discoveries here in Ghana. It means they can get on with the work of producing oil and gas and expand the partnership with the country to enable us meet our energy requirements for development.

It is time to pull our resources together to develop the country and our people. We must ensure that Ghana reverses the declining trend of national oil production from a peak of 195,000 barrels per day in 2019 to current levels which are around 120,000 barrels per day.

Q: What about Springfield? What does it mean for them?

A: Springfield is an important part of this industry. It is a leading Ghanaian oil and gas company and deserves all the support it can get. It is unfortunate that there was a need to go through arbitration. However, with this behind all parties, they can get on with their exploration work and subsequently develop their field. They have a lot to contribute towards the industry.

Q: What would you say are the likely prospects for the industry in Ghana going forward?

A: There is a short term and the medium to long term. In the short term, the industry is likely to experience a rebound led by ENI/Vitol and Tullow/Kosmos. Over the medium to long term, we must do whatever we can to support them as well as Pecan Energies to make Ghana once again a choice destination for oil and gas investors.

We are really hopeful that there will be some movement on this front. New investment must flow in as well. There are large unexplored acreages offshore. There is immense potential in our four oil basins – Tano/Cape Three Points, Saltpond, Accra-Keta and Voltaian. Currently only a fraction of the Tano basin is active and producing.

New ideas abound about what steps to take to maximise production. One such idea is that of infrastructure led exploration, ILX, which means finding additional oil and gas resources within reach of already existing production and storage infrastructure.

Let me also say that the recent successes of new oil discoveries by Eni in Ivory Coast should be a source of inspiration for the prospectivity of Ghana’s hydrocarbon potential.

The recent visits by the CEO of ENi and the Chairman of Tullow are a good sign of a revived partnership. They are the two producing operators in Ghana and are more likely to see an increase in drilling going forward.

They already have activities which are key to immediate revenue for the State. Once drilling begins, the associated value chain of businesses will also become active. When exploration and production is ongoing, international and indigenous service companies have business.

All this means increased prospects for the growth of indigenous Ghanaian companies and the attainment of our local content objectives. That is why we must demonstrate Ghana’s readiness for investments in the upstream industry, both from existing oil and gas companies and new companies.

A: It is a call that Ghana is open for business. Investors respond to a conducive business environment. Once you create a conducive business environment, the companies will flock to the country. But we have to get things right.

There are various aspects of business that we are talking to government about such as protecting the sanctity of contracts, honoring the stabilization provisions in existing Petroleum Agreements, ensuring the predictability of the regulatory regime and generally improving the business environment by striking the right balance between regulatory processes and business support. Every effort must be made to enable and sustain investor confidence.

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