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DMEA SECURITY & POLICY DMEA

The World Bank is sponsoring the Sankofa Gas Project (Image: World Bank)

GNGC official blames Sankofa Gas Project

for Ghana’s decision to seek IMF bailout

AFRICA ERNEST Owusu Bempah, the director of public Eni. Since the government cannot reduce the
affairs for Ghana National Gas Co. Ltd (GNGC), amount it pays for the gas, he explained, it can-
has alleged that a natural gas supply contract not cut the price of electricity produced by the
with Eni (Italy) is one of the factors that led the thermal 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 cubic feet (28.32bn cubic metres) of natural gas
deal signed by the administration of former from the Sankofa section of Ghana’s Offshore
President John Mahama in 2015 had been too Cape Three Points (OCTP) block to shore for
favourable to Eni. To date, he reported, Ghana use in domestic power generation. The pro-
has paid the Italian major a total of $3.6bn for ject is designed to support about 1,000 MW of
fuel received via pipeline within the framework gas-fired power-generating capacity in Ghana,
of the Sankofa Gas Project. It pays about $46mn thereby replacing older and more polluting fuel
per month for Sankofa gas, or $552mn per year, oil-burning plants.
he said. Eni also has a licence for the Sanko-
This makes the gas the most expensive in the fa-Gye-Nyame (SGN) oilfields within the block,
world, he asserted. which hold about 500mn barrels of oil. It began
He went on to say that the current govern- extracting oil from the field in 2017 and has a
ment, headed by President Nana Akufo-Addo, 44.44% stake in the project while also serving
had no option but to continue abiding by the as operator.
terms of the Sankofa Gas Project contract with The remaining equity is split between Vitol
Eni because the terms and conditions did not (Switzerland), with 35.56%, and Ghana National
allow for any changes. The Italian company was 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 privately-owned Ghanaian company that oper-
arising from the Sankofa Gas Project deal with ates Afina. ™

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