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Ghana ‘commits $8bn’ to boost offshore oil and gas project

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Ghana’s government has reportedly signed a financing deal to push forward the development of the country’s Sankofa offshore oil and gas field.31 Oct 2016

Ghana’s $8 billion commitment to the project is aimed at eventually boosting domestic power supplies and ending decades of power outages for the West African nation, the UK’s ‘Daily Telegraph’ said.

Exploration and commercialisation of gas from Sankofa, 60 kilometres offshore, is being carried out by Italy’s Eni group and Dutch commodities trader Vitol in partnership with the Ghana National Petroleum Corporation.

Ghana’s funding commitment to Sankofa follows last year’s approval by the World Bank of what it said was a record investment of $700m in guarantees to support the project’s development.

The bank said that once the Sankofa field starts to produce gas in early 2018, Ghana will be able to reduce its oil imports by up to 12 million barrels a year and cut carbon emissions by 1.6 million metric tons of CO2 annually.

Helen Bone of Pinsent Masons, the law firm behind Out-Law.com, said: “Conventional energy sources continue to hold sway for much of Africa, as renewable sources alone cannot make up the vast deficit required to meet the continent’s increasing energy demands.”

Bone said: “The ongoing reliance on oil leaves the Ghanaian economy open to strong influence from Opec’s policy decisions and the striking of a sustainable balance of energy solutions remains a pertinent issue.”

Ghana’s finance minister Seth Terkper has said Sankofa will be “a game changer” for Ghana and other middle income sub-Saharan African countries as it is set to shape the country’s energy sector for the next 20 years.

The Ghana Institute of Governance and Security said in a report released last year, ‘Four Years of Oil Production in Ghana’, that the country received more than $2.7bn in total revenue from the oil sector after four years of production activities under the country’s ‘modern concession system’.

However, the report said the figure could have been around $6.4bn if the country had adopted production sharing agreements.

According to a report released earlier this year, West Africa is becoming an increasingly attractive regional market for “dynamic impact investing’’ on the continent.

The ‘Landscape for Impact Investing in West Africa’ (56-page / 1.62 MB PDF) report, by the Global Impact Investing Network and global development advisors Dalberg, supported by the UK Department for International Development’s ‘impact programme’, said the region is a “perfect example of a region where challenges and opportunities collide”.

In June, West African leaders launched an initiative to reform energy sector policies and create “a pipeline of bankable investment projects” to boost access to sustainable energy throughout the region.

Source: http://www.out-law.com/en/articles/2016/october/ghana-commits-8bn-to-boost-offshore-oil-and-gas-project/

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