ExxonMobil’s Exit From Ghana May Signal Impending Mass Exodus Of Oil Giants

The sudden exit of the American oil giant, ExxonMobil, from Ghana’s Cape Three Point may not be isolated even as the government would have the people believe, but the symptom of troubles in the country’s oil and gas sector.

It is emerging that all the major oil companies under contract from the government are unhappy and are itching to leave because of the government’s poor handling of the contractual relations.

Italian oil exploration giant, ENI is said to be annoyed with the government over its decision in 2020 to unitize the Sankofa field which it runs, along with Ghanaian-owned Springfield Energy’s Afina field which is unproductive. 

Eni has been working to challenge the unitization which had been sanctioned by John Peter Amewu when Amewu was Energy Minister, arguing that the data collected does not confirm the two fields are connected or are part of the same reservoir.

Eni, which has been in production since 2017, is also said to have been angry at the government’s decision to import gas from Shell to Tema LNG Terminal, despite the country having substantial gas resources of its own.

For Norwegian company, Aker Energy, its mood has been described as pensive by experts who observe that it may be looking to sell part or all of its shares in the offshore Pecan field.

More than two years after it submitted its initial development plan for the Deepwater Tano-Cape Three Points (DWT-CTP) permit, where the offshore Pecan field is situated, Aker Energy has not made any progress.

Aker bought the permit from Hess Corp in 2018 but submitted its first proposal in March 2019. This led to heavy criticism from GNPC. The government would subsequently offer advantageous tax incentives, but Covid-19 upset both the tax incentives and Aker’s plans.

Aker, owned by billionaire Kjell Inge Røkke recently announced the start of a G&G campaign on Pecan field, which would allow him to submit a development plan at the end of the year.

With things not looking so good in Ghana’s oil sector, experts are saying the government has no choice but to hold on tight to what it has with Tullow Oil even though the relationship with Tullow is not exactly smooth sailing with Tullow and the government often disagreeing on local content.

The UK firm launched a drilling campaign in April on its producing deposits Jubilee and TEN, on which production began in 2010 and 2016, respectively.

 Both Tullow and the government are counting on these wells to increase production. So far, technical problems have prevented Tullow from producing more than 90,000 bpd on Jubilee, far from their plateau of 120,000 bpd. On TEN, production is at around 50,000 bpd, less than half of its plateau amount.

To top it off, the administration has been dragging its feet for two years on the sale of the holdings in Anadarko, bought in 2019 by Occidental Petroleum (Oxy).

Chinese major CNOOC and British Boru, run by Tullow’s former chairman Aidan Heavey, are in the starting blocks to buy them but no decision has been made.

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