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Gov’t must come clean on the Saltpond oilfield – Prof. Gatsi

Government must clarify its plans for the Saltpond oilfield, following the decision by Ghana National Petroleum Company (GNPC) to halt the de-commissioning process and keep a skeleton staff on the ‘non-operational’ oilfield, Prof. John Gatsi has said.

The Head of Department of Finance, School of Business at the University of Cape Coast (UCC), said the recurring subject of decommissioning the field calls for investigations to bring finality to the issue, particularly given the back-and-forth stance of the GNPC.

He explained that the Petroleum (Exploration and Production) Act 919 gives specific roles to the Petroleum Commission and minister in charge of petroleum in ensuring speedy and effective decommissioning of oilfields.

Prof. Gatsi said the investment decision to keep the workers on the oilfield, per a cost benefit analysis, is not in the interest of the country.

He, therefore, urged that clarity be brought to whether or not some private benefit is taking place hence the declining interest to decommission the oilfield or otherwise.

“A new position should be given quickly so that we are very clear in our minds what is actually going on at the Saltpond oilfield,” he added.

The Public Interest and Accountability Committee (PIAC), in its ‘2017 Half-Year Annual Report’ on developments within the oil and gas industry, repeated its stance for the “GNPC to, as a matter of urgency, complete de-commissioning the Saltpond field.”

PIAC maintained that the cost of funding skeletal staff on the production platform was not a judicious use of resources. “In maintaining GNPC’s skeleton staff on the production platform, the Corporation spent US$74,193 on staff emoluments and maintenance-related costs.”

PIAC, in its 2016 Annual Report, also stated that the dwindling crude oil production volumes from the Saltpond field, coupled with rapidly falling global crude prices, are rendering the continuous operation of the Saltpond Field unviable.

A leading member of PIAC, Dr. Steve Manteaw, explained that the committee’s recommendation on decommissioning the field is premised on the fact that the country continues to pump money into an area where no returns are being recorded.

He however maintained that if the operators or regulator has or holds a view that is in contrast to PIAC’s position, that information has to be made public.

“We have made our recommendation; it is up to the authorities to respond and tell us why the decommissioning is not continuing.”

Background

Saltpond Offshore Producing Company, the country’s oldest producer of crude oil, shut down its producing wells in December 2015. The Ministry of Energy gave its approval for the field to be decommissioned, which enabled GNPC to start the contracting process to decommission the field.

The de-commissioning process’s first phase started in October 2016, and entailed selection of a Consultant to lead the process.

Technical and Financial proposals from shortlisted consultants were submitted and evaluations completed, but the decommissioning process was later suspended.

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