Page 8 - AfrOil Week 44 2019

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AfrOil PROJECTS & COMPANIES AfrOil
Aker changes approach
to Pecan oil project in Ghana
GHANA
NORWAY’S Aker Energy said last week that it would have to revise its plans for the develop- ment of Pecan, an oilfield that lies within the Deepwater Tano/Cape Three Points (DWT/ CTP) block, in light of a dispute with the gov- ernment of Ghana.
In a report on its performance in the third quarter of 2019, Aker said that the problem stemmed from “several significant regulatory differences between the Ghanaian and Norwe- gian regulatory systems”.
It did not identify the specific points of contention but said it had suggested making amendments to the African state’s legal regime in order to ensure that development and oper- ations could move forward in a predictable manner.
So far, Ghanaian authorities have only agreed to some of the proposed changes, said Øyvind Eriksen, Aker’s president and CEO. He described this development as unfortunate and said the company was now focused on optimis- ing the development of the Pecan reservoir and tie-in sites, where it has already discovered 450- 550bn barrels of oil in contingent resources.
“Aker Energy genuinely believed that such an approach would be to the benefit of the host country, Ghana, but that it would also enable operators to take a strategic perspective beyond individual fields,” Eriksen said. “Some regula- tory changes are likely to be proposed by the
government of Ghana, though not to the extent requested in the PDO [plan for development and operations]. Hence Aker Energy is chang- ing its strategic approach.”
He explained: “Our sole objective will be to make the Pecan development even more economically robust on a stand-alone basis. Opportunities to simplify the technical con- cept, reduce the amount of investment and [achieve] cost reductions will be implemented. Furthermore, execution models including involvement of local industry and commer- cial terms offered by alliance partners will be benchmarked against proposals from other suppliers.”
Eriksen acknowledged that this new strat- egy was likely to delay work on the project. He said, though, that taking this course would help Aker mitigate its risks and protect the value of its assets in Ghana, even though the company is already protected from the adverse con- sequences of legislative and administrative changes under legislation adopted in 2006.
“The next milestones will be to have the Pecan PDO approved under the Petroleum Agreement and regulations from 2006, and ulti- mately make a final investment decision (FID). Aker Energy will in parallel explore M&A opportunities that may grow and diversify the portfolio beyond the organic approach we have pursued to date.” ™
The Pecan oilfield lies within the DWT/CTP block (Image: Aker Energy)
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w w w . N E W S B A S E . c o m Week 44 06•November•2019