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Vitol, Eni to develop $7B oil and gas project in Ghana

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Commodities trader Vitol and Italian energy company Eni receive final approval from Ghana’s government to develop a $7B offshore oil and gas project, in the largest project backed by foreign investment in the country since gaining independence in the 1950s. The Offshore Cap Three Point project would produce 15 years worth of gas for Ghana’s domestic power stations as well as crude oil for sale on international markets. Vitol and Eni expect oil to start flowing from the project’s five fields in 2017, with gas production expected to start a year later. The decision to go ahead with the project comes as many oil and gas companies are looking to cut costs and reduce spending on big developments because of sharply lower oil prices.

The completion of the $7 billion project would not only add 1.15 trillion cubic feet of gas but would also pull the country out of the current power deficit that had compelled the service providers to resort to load-shedding. The completion of the $7 billion project would not only add 1.15 trillion cubic feet of gas but would also pull the country out of the current power deficit that had compelled the service providers to resort to load-shedding. Ghana President Mahama said it formed 12 percent of the $53.5 of the total Foreign Direct Investment for Africa in 2015.

Ghana’s energy sector has expanded significantly since the discovery of the Jubilee oilfield in 2007. Output has increased from 7,000 barrels a day in 2009 to about 100,000 b/d, according to the US Energy Information Administration. Development of Sankofa fields and Gye Nyame field via OCTP Integrated Project will provide enough gas to power Ghana’s thermal power operations for 15+ years.

The OCTP development comprises five fields1 (Sankofa East Cenomanian Oil, Sankofa East, Campanian Oil, Sankofa Main Gas, Sankofa East Gas, Gye Nyame Gas), and will access approximately 1.5 trillion cubic feet (tcf) of gas-in-place and around 500 million barrels of oil-in-place. The development of the pure gas fields contained in the project has been described by the World Bank as a ‘top priority’2 for Ghana, as it will underpin the growth of a domestic thermal power sector and accelerate Ghana’s industrial development.

1OCTP licence comprises five fields: Sankofa Main (non associated gas), Sankofa East (non associated gas), Gye Nyame (non associated gas), Sankofa East Cenomanian (oil), Sankofa East Campanian (oil). The development is located in the Offshore Cape Three Points (OTCP) licence approximately 60 km offshore the Ghanaian coast. The development is in a depth of 600 – 1000 m of water. The fields will be produced via sub-sea production systems located on the sea bed and the oil and gas are brought to surface by flowlines and risers connected to a floating production, storage and offloading (FPSO) vessel.

Gas will be processed and transported via a dedicated pipeline to onshore gas receiving facilities located near the village of Sanzule on the coast in the Western Region of Ghana. Gas will be compressed and injected into the Western Corridor Gas Pipeline for transportation to industrial customers in Ghana. Oil will be stored in the FPSO and then offloaded to tankers for sale in the international market.

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