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GNGC official blames Sankofa

Gas Project for Ghana’s decision

to seek IMF bailout

GHANA ERNEST Owusu Bempah, the director of public Since the government cannot reduce the amount
affairs for Ghana National Gas Co. Ltd (GNGC), it pays for the gas, he explained, it cannot cut
has alleged that a natural gas supply contract the price of electricity produced by the thermal
with Eni (Italy) is one of the factors that led the power plant (TPP) that burns the gas.
country’s government to seek a financial bailout The Sankofa Gas Project is a multi-bil-
from the International Monetary Fund (IMF). lion-dollar initiative supported by the World
Speaking to reporters in Accra on Novem- Bank that aims to bring more than 1 trillion
ber 1, Owusu Bempah complained that the deal cubic feet (28.32bn cubic metres) of natural gas
signed by the administration of former President from the Sankofa section of Ghana’s Offshore
John Mahama in 2015 had been too favourable Cape Three Points (OCTP) block to shore for
to Eni. To date, he reported, Ghana has paid the use in domestic power generation. The pro-
Italian major a total of $3.6bn for fuel received ject is designed to support about 1,000 MW of
via pipeline within the framework of the Sankofa gas-fired power-generating capacity in Ghana,
Gas Project. It pays about $46mn per month for thereby replacing older and more polluting fuel
Sankofa gas, or $552mn per year, he said. oil-burning plants.
This makes the gas the most expensive in the Eni also has a licence for the Sanko-
world, he asserted. fa-Gye-Nyame (SGN) oilfields within the block,
He went on to say that the current govern- which hold about 500mn barrels of oil. It began
ment, headed by President Nana Akufo-Addo, extracting oil from the field in 2017 and has a
had no option but to continue abiding by the 44.44% stake in the project while also serving as
terms of the Sankofa Gas Project contract with operator. The remaining equity is split between
Eni because the terms and conditions did not Vitol (Switzerland), with 35.56%, and Ghana
allow for any changes. The Italian company was National Petroleum Corp. (GNPC), with 20%.
granted a monopoly contract for a term of 20-25 Ghana’s government has ordered Eni to uni-
years, he remarked, adding that the IMF had tise Sankofa with Afina, an oilfield within the
raised questions about the deal. adjacent West Cape Three Points-2 (WCTP-2)
“We wouldn’t be going to the IMF but for licence area that holds around 1.5bn barrels of
some of these reckless, dubious contracts signed oil and 19.8bn cubic metres of gas. However,
by the Mahama administration,” he added. Eni has been unable to reach agreement with
In the meantime, he said, the Ghanaian Springfield Exploration and Production, the
economy is bearing the economic burdens aris- privately-owned Ghanaian company that oper-
ing from the Sankofa Gas Project deal with Eni. ates Afina.™

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