101101ogj_Ghanainsert_1 1 10/18/10 10:04 AM contents A new era for 1-2 The clock counts down to first oil, A new Era for Ghana 3-8 First Oil and Beyond and to economic transformation 9-10 Supporting Growth 11-16 Building a Downstream Powerhouse 17-20 Powering Up 21 n 2007, exactly fifty years after gaining A Champion for Africa I its independence, the West African 22 nation of Ghana made the offshore oil Data and References discovery that is now poised to help transform the countrys economy and turn it into an upstream and downstream energy hub for the region. Foreign investors from across the world, including international oil majors from the US and Europe and state-owned oil companies from China and elsewhere, are now lining up to enter the country, staking out early positions in a brand new territory, and seizing this rare opportunity to ramp up their reserves. The first oil from the Jubilee field, up to , All production and editing was done 1.8 billion barrels of light crude oil and by Star Communications. For more associated gas reserves in deep water in the information: Gulf of Guinea, is set to start flowing by the proved to be a curse as much as a blessing in www.star-communications.us end of 2010, after one of the fastest countries such as neighboring Nigeria, development times ever seen in the global Ghana is pushing through new legislation Writing: offshore industry. that will try to ensure that the oil and gas Mark Beresford Production from the field, which is discoveries serve to raise the standard of Production Development: operated by Tullow, will start in November living across the country. Danielle Jacobsen or December and within six months will be pumping at As Ghana becomes an oil-producing Design & Layout: 120,000 barrels per day (bpd) of nation, we will maximize for all Ghanaians any Dispar Comunicación oil and 120 million cubic feet benefit that we can accrue from this bounty Photos: (mcf) of gas. It is then expected to John Atta Mills, President of Ghana Courtesy of Cirrus Oil Services, Ghana Ports ramp up to 250,000 bpd in a and Harbour Authority, Kosmos Energy, second phase from 2014, with peak As Ghana becomes an oil-producing MODEC, Tullow Oil, WAGPCo. production around 2015 to 2016. nation, we will maximize for all Ghanaians Meanwhile, deepwater exploration and any benefit that we can accrue from this Geological Maps: discoveries are continuing in the area, with bounty, President John Atta Mills said in his Courtesy of Tullow Oil the Tweneboa and Owo fields looking State of the Nation address in February. My particularly promising. vision is to use the oil and gas discovery to Published November 2010 Over the next few years, oil revenues will transform the Ghanaian economy from its The publisher wishes to thank the many replace gold and cocoa as the main exports over-dependence on primary raw materials organizations and individuals whose con- and drivers of the economy. The International to a diversified, prosperous 21st century tributions made this edition possible. Your Monetary Fund (IMF) forecasts that the industrial nation. contributions are appreciated enormously. country will receive about US$1 billion in Ghana is characterized by the stability Special thanks to Daniel Bernard of Oil and revenue per annum for the next 20 years and relative transparency of its political and Gas Journal and to the staff of the magazine from oil production in the Jubilee Field alone. economic institutions. These will be crucial for their support and cooperation. And while hydrocarbon resources have in ensuring the successful management of

101101ogj_Ghanainsert_2 2 10/18/10 10:04 AM 02 oil revenues and in attracting the estimated US$16 billion that the country needs to develop its energy sector. Following free elections in December 2008, there was a peaceful change of government in January 2009, and this stable democracy has received high level international recognition. In July 2009, US President Barack Obama chose the country for his first African visit, in a strong show of support. On the economic front too, Ghana has been enjoying high and steady expansion, Introduction with economic growth averaging an annual 6% over five years. The International Monetary Fund however expects the Atwood Hunter at sunset economy to expand by 20.3% in 2011, based on investment in the oil sector and The government believes that as a nation revenues, from models inspired by countries revenues from the oil discoveries. we can benefit immensely from transparency, such as Norway and Trinidad and Tobago. As far back as 2003, the country began Energy Minister Dr. Joe Oteng-Adjei said at The country has also placed environmental the process of implementing the Extractive a conference in February. With transparency concerns at the heart of the development of Industries Transparency Initiative (EITI) for comes an improved investment climate, its oil and gas industry, exemplified by the its mining industry. Reflecting its promise to because it provides a clear signal to investors rigorous no flaring policy that is being the transparent use of revenue from and international institutions that the applied by the Ghana National Petroleum extractive industries, the country is now government is committed to doing what Corporation (GNPC), the national oil company. implementing EITI in its oil and gas sector. is right. Equally, the government is also committed Transparency International has rated Ghana Continuing its commitment to international to a sustained early effort in investing its number four in sub-Saharan Africa in the best practices, Ghana will also implement oil and gas windfall in the development of the 2009 Corruption Perception Index. them in the management of its hydrocarbon countrys human resources, and in improving competitiveness and infrastructure. In particular, the national power grid and electricity generation and distribution are set to expand significantly, after years of underinvestment and supply shortages. The success of Trinidad and Tobago in sharing the benefits of the sector with the local population has inspired the local content policy: the government wants to increase the capabilities and competitiveness of domestic businesses, and is targeting local participation of up to 90% in the oil and gas value chain by 2020. With the offshore upstream sector generating relatively little employment, the development of a Ghanaian downstream industry, based largely on the natural gas discoveries, will be key to realizing the countrys economic vision. And foreign capital will have a major part to play in this development process. In the downstream, dynamic private sector companies have emerged that are investing heavily in new infrastructure and services, and are actively looking for partnerships with foreign companies to support their expansion. From across the countrys energy sector, the message to foreign investors is clear: Ghana is open for business, it is committed to transparency, and it is well prepared for the challenges of the new economic era that it is now entering.

101101ogj_Ghanainsert_3 3 10/18/10 10:04 AM 03 First Oil and Beyond Deepwater drilling leads to major hydrocarbon discoveries Petroleum Resources

ne of the most striking features of its promotional activities; as well as invested O Ghana s upstream industry has heavily in staff training, including both been the pace of development, with just Change academic training and staff secondment or three and a half years from the discovery of attachment to E&P companies and to seismic the Jubilee field in July 2007 to expected for Tomorrow data acquisition and processing companies. first oil production by the end of 2010. The crowning result of this concerted On 21 June, , the Floating > effort in exploration was the discovery of the Production Storage and Offloading (FPSO) Jubilee field in the Tano/Cape Three Points vessel named after the founder of modern oil basin in 2007. Ghana, arrived in Ghanaian waters from The field, which lies about 60 kilometers Singapore. The vessel is now moored on station off the Ghanaian coast, straddles the Deepwater above the Jubilee field, while the installation Tano basin license operated by Tullow, and and commissioning process continues. the West Cape Three Points basin in which Installation of the subsea equipment, Tullow has a 22.9% stake and which is mainly supplied by Technip, started in operated by privately owned Kosmos Energy. January 2010 and is now more than 75% The cost for the development of Phase 1 complete and nearly ready for integration of the 110 square kilometer Jubilee field, is with the FPSO, constructed by Modec, which estimated by Tullow at US$3.35 billion. A includes the biggest turret ever constructed. WATER WELL PROJECT total of seventeen wells will be drilled in The credit for what is one of the fastest Phase 1: nine production wells and eight ever deep water developments must go water/gas injection wells. Phase 1 is both to the technical expertise that Tullow, In 2007, officials from Tullow and local authorities expected to produce oil and gas for twenty the Jubilee operator, has deployed in Ghana, identified the lack of clean drinking water as to twenty-five years. and also to the strength of the partnership the most urgent problem in the district of Jomoro Despite the fast-track development, the between Tullow, the other owners of the field in the Western Region of Ghana. The company health and safety record of the project has - Kosmos, Anadarko, Sabre Oil & Gas and immediately launched an initiative to install been impeccable, with only two lost time mechanical and hand-pumped water wells EO Group - and the Ghanaian government, incidents for the 3.7 million hours worked. across the district. through the Ghana National Petroleum The Ghana Environmental Protection Agency Corporation (GNPC). Jomoro now has about thirty water wells, pro- approved the first stage of the Environmental Tullow has a 34.7% share in Jubilee, viding over 13,000 people with a reliable and and Social Impact Assessment already in while GNPC has a 13.75% stake, Kosmos accessible source of fresh, healthy drinking water. December 2009. has a 23.49% stake, Anadarko Petroleum And the initiative has been extended to the Production from Phase 1 of Jubilee, adjoining districts of Ellembele and Ahanta West, has 23.49%, Sabre Oil & Gas has 2.81% which is one of the largest fields anywhere where water-related diseases have been a major and EO Group 1.75%. problem. Fifteen deprived communities in these in West Africa, will start at 60,000 bpd and two districts now enjoy access to clean water. then rise to its plateau level of 120,000 bpd, Concerted effort the FPSOs oil processing capacity, three to Tullow is also providing funding for Sight Savers According to GNPC, since 2001 there has six months after start-up. The processed International in Ghana, to support the fight been a major intensification of exploration crude oil will be stored in the FPSO storage against onchocerciasis, or river blindness. These for commercial hydrocarbons in Ghana. funds have been used to train twenty nurses in tanks and offloaded to oil tankers every That intensification reflects a series of ophthalmology, to raise awareness of blindness seven to ten days, marketing the oil factors: Ghanas fiscal and regulatory regime and treatment programs among local communi- individually, cargo by cargo. was made more attractive to potential foreign ties, and to distribute Mectizan tablets to over The oil from Jubilee is of high quality - light investors in the sector; GNPC intensified one thousand people in rural areas. sweet crude with API gravity of 37.6 degrees -

101101ogj_Ghanainsert_4 4 10/18/10 10:04 AM 04 Petroleum Resources 10/18/10 10:04 AM We require that companies wishing to wishing companies that require We According to a statement from GNPC, to from a statement According Drilling in action - Atwood Hunter - Atwood action in Drilling we work to achieve the right balance currently thirteen offshore licenses operated licenses offshore thirteen currently companies. international various by between maximizing benefits that and ensuring and Ghanaians country for the international oil investment. their on companies return fair (investors) a achieve a to committed partner us are and be technically financially must they that and sound, and a minimum program work exploration minimum the within commitment financial Several other prospective other Several The government The intends to government oil companies have expressed have companies oil Energy exploration, in interest Joe Dr. Minister Oteng-Adjei in said a in February. speech With Ghana not yet using bidding rounds, bidding using yet not Ghana With hydrocarbon sedimentary basins. There are There basins. sedimentary hydrocarbon accelerate the process of acquisition of blocks of acquisition of process the to order accelerate in basins, sedimentary Ghana the in oil countrys the delineate speedily and fully potential. gas and are companies production and exploration the in gas invited and oil all for year explore to round to license/block apply for a International interest sparked interest International the in Ghana put has discovery Jubilee The and spotlight, companies and production oil exploration international of host a inspired as Ghana use to planning area, exploration. the target to offshore African for pad launch a opening by responded has government The Ghana. across acreage up when when the infrastructure for taking gas onshore becomes available in 2011, the FPSO will have gas export and injection capacity of up to 160 mmscfd. supply the energy needs of the FPSO, but of FPSO, the needs energy the supply A sweet crude oil of that level of gravity of level that of oil crude sweet A The The government intends to accelerate the The associated gas at Jubilee will initially will Jubilee at gas associated The Phase II production could see the total could II production Phase The Jubilee field is expected to operate is expected field Jubilee The FPSO Kwame Nkrumah MV 21 leaving Singapore en route to Ghana to route en Singapore leaving 21 MV Nkrumah Kwame FPSO which makes the Jubilee field a quality oil a quality field Jubilee the makes which million cubic feet of gas, according to GNPC. GNPC. to according gas, of feet cubic million be re-injected into the field, or used to daily output of oil and gas from the entire the from gas and of oil output daily 240 and barrels 240,000 about to rise field already already planning wells further additional require will These phases. development infrastructure. subsea the of expansion and until until at least 2031, and the partners are oil, Dai Jones at Tullow Ghana said in July, in said Ghana Tullow oil,at Jones Dai product. class world a producing field the best buyers available. quality and class world be to considered is enable easy access to all the major refining major the all to as access easy enable Europe and Asia Americas, the of markets swung be will field the from production the always finding regions, between different that that will make it especially attractive to refiners. The location of the FPSO will process process of acquisition of blocks in speedily and basins,to fully in order the Ghana sedimentary potential gas and oil country s the delineate Dr. Joe Oteng-Adjei, Minister of Energy Energy of Minister Oteng-Adjei, Joe Dr. 101101ogj_Ghanainsert_5 5 05 period, says the Managing Director of GNPC, Nana Boakye Asafu-Adjaye. The clearest example of Ghanas appeal to International Oil Companies was the US$4 billion attempt by ExxonMobil to acquire Kosmos stake in Jubilee, which Exxon Mobil finally withdrew in August. Press reports suggest that stake may now be divided between the GNPC, CNOOC, and an IOC with a strong background in deepwater production. And foreign interest in the 50,000 square kilometers of offshore acreage in Ghana is not hard to understand. Of the more than 50 exploration wells that have Petroleum Resources been drilled in Ghana, about 75% have shown indications of hydrocarbons. These investment decisions are not taken lightly - drilling a well in the Ghanaian offshore costs an estimated US$40 to US$50 million dollars. But despite the price tag for deepwater exploration, in Ghana, unlike in the Gulf of Mexico, there is no hurricane season which could disrupt production, while the environmental conditions are much less Blackford Dolphin semi-submersible drilling rig at the Jubilee field challenging than in Alaska, and the oil and gas finds here are more accessible than the pre-salt discoveries in Brazil. According to GNPC, the development of of the Sea (UNCLOS), in order to claim The recent offshore finds suggest that Ghanas four sedimentary basins is another 150 nautical miles of the sea for Ghana has major offshore oil and gas intimately related to the opening and further exploration. There are indications that reserves that could form part of a new chain spreading of the Equatorial Atlantic Ocean the countrys Extended Legal Continental of oilfields in an Upper Cretaceous play all and the divergence of the West African and Shelf (ELCS) hold significant recoverable along the West African Transform Margin, South American plates. reserves of oil and gas for Ghana. where the continents of Africa and South A number of discoveries have been In 2007, Jubilee was the largest single America separated. made in analogous geological settings along oilfield discovered in the whole world, the Margin, including the offshore Espoir and Baobab producing Ghana is a very safe country, fields in neighboring and it provides the investor with a Côte dIvoire, and the stable environment for business Venus discovery off George Aboagye, CEO of the Ghana Investment Liberia. Promotion Centre (GIPC) And while Liberia and Côte dIvoire have been plagued by internal unrest, stable and Nana Boakye Asafu-Adjaye told Ghanaian democratic Ghana is now poised to become television in an interview. The important a key supply center for the offshore industry thing about this is that it has opened up that is emerging around this geology. We what we call the New Petroleum Province in are like a safe island in a region of turbulence Ghana and our offshore areas. and strife, says George Aboagye, the Chief Executive Officer of the Ghana Investment Tano Basin Promotion Centre. Ghana is a very safe So far, the main exploration activity has country, and it provides the investor with a largely taken place in the Tano Basin, where stable environment for business. a number of international oil companies are Prospects for offshore exploration in carrying out intense drilling activity. Ghana may also be boosted by the countrys Despite the focus on first oil from Jubilee, request to extend its continental shelf under Tullow is running a very active deepwater Drilling on Blackford Dolphin the United Nations Convention on the Law exploration and appraisal program. Since

101101ogj_Ghanainsert_6 6 10/18/10 10:04 AM 06 signing deep water licenses in 2006 for adjacent to Tweneboa, after finding a Deepwater Tano and West Cape Three Points, substantial 200 meter gross oil column in the company has drilled 14 exploration and the heart of the Owo oil field. appraisal wells, and all but one of these wells has found hydrocarbons. These include Other Tano players exploration wells to the southeast of Jubilee, Another international oil company to hear which have extended the field and the call of Ghana has been Eni. In September encountered the Mahogany Deep reservoir. 2009, Eni acquired from the operator Vitol, a The Jubilee partners have made two other privately owned energy trader based in Petroleum Resources Petroleum major discoveries of fields in Ghanaian Switzerland, majority stakes in two offshore offshore waters - the Odum oil field in West exploration blocks. Both blocks are in the Cape Three Points, and the Tweneboa gas same Tano/Cape Three Points oil basin where and oil condensate in Deepwater Tano, Jubilee is located - Offshore Cape Three which holds an estimated 1.4 billion barrels Tullow s interest in the West African Points (OTCP), covering an area of 1,560 of oil equivalent. Equatorial Atlantic Region square kilometers, and Offshore Cape Three The Odum field is a Campanian play in Points South, of 740 square kilometers. a stratigraphic trap about 13 kilometers east system related to the Jubilee Turonian play. Enis move comes after Vitols Sankofa-1 of Jubilee. In December 2009, an appraisal The well encountered a gross reservoir well in the OCTP block encountered high well confirmed the oil discovery made here interval of 153 meters containing 32 meters quality reservoir sands of Campanian age in in February 2008, encountering 20 meters of net hydrocarbon pay in stacked reservoir June and July 2009, containing 36 meters of of net oil pay in high quality stacked sandstones, comprising a 17 meter oil oil and gas, some 35 kilometers east of the sandstone reservoirs. bearing zone below a 15 meter gas- Jubilee field and 21 kilometers east of the In January 2010, Tullow said that results condensate bearing zone. Odum discovery in the West Cape Three from the Tweneboa-2 exploratory appraisal And most recently, in September 2010, Points block. well, west of Jubilee in Deepwater Tano, Tullows Owo-1 exploration sidetrack in Eni now holds a 47.22% stake in both show that Tweneboa is a major oil and gas Deepwater Tano confirmed that Owo is a blocks, and is the operator, with GNPC condensate field on a giant Turonian fan major new field of high quality light oil, owning a 15% stake in both.

101101ogj_Ghanainsert_7 7 10/18/10 10:04 AM 07 Meanwhile, in the eastern part of the Tano Basin, in Deepwater Cape Three Points, Russias Lukoil Overseas (the operator), Vanco Energy of the US, and GNPC found gas-condensate and oil, at their Dzata-1 exploration well in February 2010. Dzata-1 is situated in a water depth of 1,878 meters, approximately 75 kilometers south of Cape Three Points, and is the deepest water exploration well drilled to date in the Ghanaian Tano Basin. It is also the first exploration well to be drilled in the agreement area. The well was drilled to a total depth of 4,433 meters and at 3,653 meters Petroleum Resources encountered a gross hydrocarbon column of 94 meters with 25 meters of net stacked oil and gas pay. The primary reservoir sandstone between the depths of 3,663 and 3,690 meters contains gas and light oil. Kosmos drillstem test at the Mahogany-2 appraisal using the Songa Saturn Volatile black oil was recovered from a zone between 3,701 and 3,709 meters. Vanco and Lukoil are currently acquiring of 3,000 square kilometers. Hess is currently Meanwhile, in March 2010, Australias a new 1,664 square kilometer 3D program acquiring 1,619 square kilometers of new Tap Oil reached an agreement with GNPC to identify prospective features in the 3D seismic in anticipation of a well to be for exploration in the Offshore Accra Block northern and western parts of the block, drilled in the unexplored western half of the in the Accra-Keta basin, which covers an which encompasses an area of 5,164 square license area. The Ankobra well that it drilled area of 2,000 square kilometers to the kilometers in water depths ranging from in September 2008 proved unsuccessful, southeast of the capital Accra, in water 200 to 3,000 meters. but the company is planning a new well for depths ranging from less than 50 meters to Vanco holds a 28.34% participating the last quarter of 2010. greater than 2,500 meters. interest with Lukoil holding a 56.66% Tap is the operator for the area, with a participating interest. GNPC has a 15% Access all areas 36% interest, and says that 2010 activity in carried interest. Other players are also exploring the other the block will focus on seismic reprocessing Also in the Tano Basin, US independent major cretaceous offshore area in Ghana, the and new seismic acquisition, with one well Hess holds deep water acreage in Deepwater deepwater Accra-Keta basin in eastern to be drilled in 2011 or 2012. Tano / Cape Three Points, covering an area Ghana. As in Tano, the reservoirs in this According to Tap, 3D seismic indicates deepwater basin are made up of Upper the potential for multiple large (over 100 Cretaceous and Tertiary sandstones of million barrel) oil accumulations in the excellent characteristics. Contract Area. Taps partners in the joint African independent Afren acquired venture include Challenger Minerals and acreage here from Devon Energy in June AFEX International. 2008. Afren has a 68% working interest in the A sweet crude oil of this level of gravity is offshore Keta Block in the considered to be world class and quality oil, Accra-Keta basin and operates the block, which which makes the Jubilee field a quality oil covers an area of 5,500 field producing a world class product square kilometers, in water Dai Jones, General Manager, Tullow Oil Ghana depths ranging up to 2,600 meters. According to Afren, there is attractive I am very excited by the agreement with potential in the Keta Block, above all in Tap, because after a period of low the deep water sandstones of the Upper exploration activity in this part of the basin, Cretaceous section, which is very similar to we are now going to into a new phase of the Jubilee and Odum discoveries. exploration, in an area that we believe Afren has sold a 20% stake in Keta via deserves attention, GNPCs Nana Asafu- a farm-down agreement to Japanese Adjaye says. All the key elements that favor conglomerate Mitsui & Co, and plans to oil and gas accumulation are present and we On board Blackford Dolphin drill an exploration well here in 2011. are very excited about the prospects.

101101ogj_Ghanainsert_8 8 10/18/10 10:04 AM 08 And although the current focus in basin and the Onshore Keta sub-basin. strength, is above all a long term commitment exploration is on appraisal of the offshore These areas offer opportunities for to the country. finds, there may also be some opportunities investment, and I encourage companies to And it is this focus on the long term that onshore Ghana. There is a small onshore partner GNPC to pursue these opportunities. is being stressed by the offshore pioneers in extension to Keta, and so far only one well Ghana, even as they prepare to produce the has been drilled and 200 square kilometers A legacy for Ghana first oil from Jubilee, oil that will change the of 2D seismic have been acquired in the International interest in acquiring acreage in face of the country for ever. Paleozoic inland Voltaian Basin, which Ghana has been supported by the contractual Its a country-changing, country-making covers around 40% of the total land area. terms provided by the government. According event, Tullows Dai Jones said in July. Petroleum Resources Petroleum GNPC says that it is planning a study of to Tap, the most recent signatory, petroleum This isnt just about Tullow and Jubilee the Voltaian Basin in order to assess the agreements in Ghana are considered Field - its about what the country needs to resource potential of the basin. This attractive on a global ranking the agreement do and how we have to help them get to onshore basin is underexplored, even terms and the supportive host government the right place. though there are several indications of provide an attractive hydrocarbons observed in water wells, Mr. reward for effort in the Asafu-Adjaye says. event of a discovery. I encourage companies to There could still be potential in the We have a very come in and join GNPC in its Paleozoic reservoirs of the neglected Central attractive fiscal system exploration activities (Saltpond) basin, where a field has been and transparent laws and Nana Boakye Asafu-Adjaye, Managing commercially producing hydrocarbons in regulations - the process Director of GNPC shallow waters for over thirty years, and which in which we operate is currently produces about four hundred transparent and equal for barrels of oil per day from one well. all companies, Mr. Asafu-Adjaye says. I Its not about what we do in the first There is still a number of very interesting encourage companies to come in and join few years its about what we do in five, ten, areas with high potential for oil and gas GNPC in its exploration activities, fifteen, twenty years we re here to do accumulation that have not been licensed Mr. Asafu-Adjaye emphasizes that what things for the long term, we re here to yet, Mr. Asafu-Adjaye says. These include Ghana requires from upstream investors, in create a legacy, and we re here to build for the Offshore Accra basin, the Saltpond addition to technical expertise and financial the future.

101101ogj_Ghanainsert_9 9 10/18/10 10:04 AM 09 Supporting Growth Implementing international best practice in policies and regulations Policy Framework T he development of the economic and regulatory framework for hydrocarbons in Ghana has been as fast as the timeline from discovery to production of the Jubilee field. A whole series of new legislative measures, at various stages of approval, is designed to ensure that the country provides an investor- friendly environment and that the whole population benefits from the growth of the industry. Economic measures are established to avoid the potential resource curse experienced by other countries in the past. In particular, the local content policy is designed to prevent economic and social problems such as those suffered by Nigeria, and to follow more successful examples, such as that of Angola, where 80% of the workforce employed in the energy sector is now Angolan. As well as measures to support locally owned companies, the government is focused on creating an attractive business environment, and is encouraging joint ventures between local firms and international suppliers, contractors and service companies. We have an attractive fiscal and legal regime, says Nana Boakye Asafu-Adjaye of GNPC And with the local content policy Tullow operator at Takoradi port framework coming soon, we would like to see a strong involvement by Ghanaian companies, whether alone or in partnership Tullow is very happy with the policy Economic management with foreign companies. environment here, Dai Jones, President and Keen to get it right, Ghana is also implementing Fiscal incentives and rewards to companies General Manager of Tullow Oil Ghana, said international best practice in terms of managing that comply with all Local Content and in an interview in March. The agreements its hydrocarbon revenues. By separating current Local Participation regulations have been are fair. spending from current oil and gas income, of put in place. Royalties have been increased since the which a proportion of oil income will be Jubilee agreements, reflecting the reduced invested abroad, it aims to protect itself against Regulatory framework exploration risk now that oil and gas have the Dutch disease of hydrocarbon exports The current oil boom is strongly supported been found. But The Energy Ministry is also resulting in an overvalued currency. by a sound regulatory environment, which amending its legislation for the petroleum All upstream oil and gas revenues, such as made it easy and attractive for players such as sector to ensure that the country provides an royalties and taxes, will enter a Ghana Petroleum Tullow, Anadarko and Kosmos to partner investor-friendly environment and to make Account, making it easier to track the inflow with GNPC and carry out successful offshore the process of getting exploration and and outflow of these revenues. All transfers from exploration programs. production licenses less complicated. this account will go into the national budget, or

101101ogj_Ghanainsert_10 10 10/18/10 10:04 AM 10 Policy Framework 10/18/10 10:04 AM My vision My for Ghana,vision Asafu- says Mr. Many of our people see the oil discovery as discovery oil the see people our of Many So far, foreign investors have proved able proved have investors foreign far, So transparent a create to strive Ghana as And The countrys policy framework on Local on framework policy countrys The must companies Ghanaian In addition, regulations these employment, of terms In five years, while for core technical staff, rising start, at the be Ghanaians must 30% to 80% within five years. 100% of other Ghanaians. be must staff to take in these requirements their stride. IT its Tullow of 100% has procuring already awarded including 700 80% contracts, Over local Ghana. in services and Ghanaian, equipment are country the in employees its of and the company is developing plans to 90% of over a target it achieves that ensure local national employees. around aimed framework investors regulatory and coherent major from interest attract to should the policy the world, content local help ensure for opportunities Ghanaians, and the across the across industry, energy economy. whole to take at GNPC, country Adjaye the is for to gas discoveries, and deepwater oil of these advantage world-class a establish to us enable and industry, beyond that to drive local industrial and social development. conference in February. The active involvement active The February. in conference exploration, gas and oil the in Ghanaians of development, production and participation utilization local and content local through issue. has become a major policy Petroleum in Participation Local and Content Activities includes a gas target and oil of the of 90% local aspects all in participation value chainindustry by 2020. It requires companies for Ghanaian consideration first and licenses, and blocks oil awarding when in companies Ghanaian for stakes equity 5% offshore exploration licenses awarded to companies. foreign unless and services, for goods be preferred expensive. 10% than more are they must staff management of 50% that establish within 80% to be rising Ghanaians at licensee, the the by start of activities petroleum the last opportunity for national prosperity, national for a opportunity at last the said Oteng-Adjei Joe Dr. Minister Energy And And although the supply of trained local of trained supply workers for technical areas is currently limited, currently is areas change. to set looks that Thanks to to efforts to opportunities extend Ghanaians, Tullow is sponsoring 14 young gas industry in Ghana, and the preferred the and Ghana, in industry gas Mr. Mensah has travelled the world looking world the travelled has Mensah Mr. These These sorts of training programs are a Drilling from Eirik Raude Eirik from Drilling industry. industry. in interested who are partners for technical boom. oil We Ghanaian the in who participating companies multinational for looking are venture joint a in us the with work to become willing to are is aim our says, oil he the of relationship, Hughes Baker or Schlumberger local and Center is to ensure technology transfer gas and technology transfer and is to ensure oil Center local the in building capacity local Meanwhile, the government has also established also has in sector, government the the in Meanwhile, participation local for and guidelines Trinidad of experience the repeat economy. to bid a its industrializing in Tobago Local content solutions provider to the industry here. industry the to provider solutions universities in the UK. This is the first step in step Ghanaians in first Masters the degrees is UK. in the This in leading said. universities Jones Dai Tullows journey, long a part of the that contracts the country has struck with international oil companies, and Tullows efforts are being industry. the mirrored across a The education level in Ghana is Ghana in level education The very high and it should not take long to get Ghanaians trained for industry this in positions leadership Africanus Mensah, CEO of AMAJA Oilfield Services If the revenues from the oil resources are resources oil the from revenues the If Mr. Mensah, who is one of the countrys the of one is who Mensah, Mr. Africanus Mensah is among those advocating those among is Mensah Africanus The The model is by inspired the example The two funds, The the Stabilization two Ghana funds, 100% Ghanaian workforce, with acknowledged with workforce, Ghanaian 100% leadership positions in this industry. The core The industry. take this long in to positions get Ghanaians leadership trained Training for Oilfield the and AMAJA both of aim expertise in offshore technology education .the offshore in expertise not should it and high very is Ghana in level first petroleum engineers, and a Schlumberger a and ensure to engineers, be will petroleum aim first main that our says veteran, technology transfer to Ghanaians. In the to close I to maintain look years, coming founding founding partner of the Oilfield Training Takoradi. in Ghana Center Services, Services, headquartered in Accra, and Chief Executive Officer of Officer AMAJA Oilfield Chief Executive workforce with the technical training needed training technical the with workforce industry. energy class world a support to as the effort, building capacity the national boom will be open to the entire population. entire the to open be will boom sector private the and government the Both are working hard to provide the national The country also has a strong focus on ensuring on focus strong Capacity building a has also country The oil the of opportunities employment the that prosperity, Nana Boakye Asafu-Adjaye explains. Asafu-Adjaye Boakye Nana prosperity, into two special funds, which will be monitored be will which funds, Committee. special two Oversight into Public independent an by established by Norway and also implemented also and of Norway by partner a is established Ghana Tobago; and Trinidad program. by Development for Oil Norways good quality good health care quality and of reduction enduring have will Ghanaians then poverty, future generations of Ghanaians, respectively. respectively. Ghanaians, of generations future education, used for good quality optimally used in the event of shortfalls in the budget and budget be will the Fund, in Heritage Ghana the and Fund shortfalls of event the for in income used investment and savings provide to 101101ogj_Ghanainsert_11 11 11 Building a Downstream Powerhouse Investing in infrastructure, the country prepares to be a regional hub Downstream Market A lthough the current focus in in this development process, and the major Ghana is on the imminent start players in the sector are actively seeking of oil and gas production from the Jubilee Change partnerships with foreign companies. At field, it is the development of the Cirrus, our goal is to take this company to a downstream sector that will be the key to for Tomorrow global level and to be an international the countrys emergence as an energy and player, says Executive Director John Taylor, trade hub for western Africa. > strategic partnerships could be one way for A dynamic private sector is now us to achieve this, if it makes economic and emerging, led by local bulk distribution social sense. companies such as Cirrus Oil Services and Partnerships with Ghanaian companies Fueltrade, who are investing heavily in the also look set to provide international downstream infrastructure that will be investors with a perfect platform for crucial to the industrial development of expansion into activities across the West the country. Africa region. A range of Ghanaian owned With the anticipated commercial companies are preparing to assume key exploitation of crude oil and gas, we are positions in the downstream market and positioning Ghana for a major industrial attract foreign partners. take-off, President John Atta Mills said in MEDICAL BOAT SERVICE The best and most efficient way for his state of the union address in February. foreign companies to sell crude and other Beginning this year, we are putting petroleum products, not only in Ghana, but together the building blocks of an oil and in West Africa, will be through involvement The Akosombo Dam, operated by Volta River gas-based industrial architecture. Authority (VRA), generates about half of Ghana s with local companies, explains Chris We are laying the foundation for an electricity. But its construction in the 1960s Chinebuah, Chief Executive Officer of integrated aluminum industry based on resulted in the creation of the massive Lake Volta, leading Ghanaian bulk distribution and bauxite; a petrochemical industry based on and in an increased incidence of water borne trading companies, Fueltrade and Bulkship salt and natural gas; a fertilizer industry to diseases such as bilharziosis. & Trade. give impetus to agro development; a salt- Because the fishing communities that have grown Ghana has become a focal point with based industrial chemical industry for up around the lake are often inaccessible by road, the oil discoveries, and clearly a lot of caustic soda; and allied consumer products to respond to this and other healthcare problems, activity is going to be generated, Mr. and exports based on oil and gas. for twenty years VRA has been running the Onipa Chinebuah says. I believe that the bulk It is oil and gas downstream investment Nua Medical Boat service. The boat houses an distribution companies will have a major operating theatre for surgery, a dental chair, a that will realize this vision, and end the dispensary, and laboratory facilities. In total, it role to play in this, and I would make a traditional dependence of Ghanas economy provides free medical, dental and public health passionate appeal to companies and on raw material exports of cocoa, gold and services, as well as health education and talks, financial institutions to take an interest in timber. to 169 communities along Lake Volta. Ghana. Ghana is a safe investment haven Other countries in the region - such as Since the first voyage of the Onipa Nua in December with lots of opportunities. Nigeria and Angola - may have larger 1990, the prevalence of bilharzia cases along the In addition to the downstream oil sector, hydrocarbon resources, but it is Ghana shore of the lake has been cut by about a half. the emergence of industries based on the that has the political and economic And as the lakeside communities thrive and use of offshore gas will also drive the stability, and regulatory transparency, that expand, VRA is now planning to acquire an countrys economic and social development. are needed to attract investment into the additional boat, to increase the frequency of The gas produced from the Jubilee downstream market. There will be extensive visits, and to make STD/HIV control programs a field will be piped onshore for a number of opportunities for foreign capital to participate major activity of the boat. industries, explains Africanus Mensah at

101101ogj_Ghanainsert_12 12 10/18/10 10:04 AM 12 Downstream Market 10/18/10 10:04 AM These companies are breaking the monopoly on infrastructure on monopoly the breaking are companies These investments in the storage and distribution areas. areas. distribution and storage the in investments to the competition needed much bringing by held once BOST, industries. for downstream and the market laying foundations In the petroleum sector, following deregulation in 2005, privately 2005, in Cirrus expands deregulation following sector, petroleum the In owned Ghanaian companies are now carrying out major The inadequate refining infrastructure constitutes a constitutes major infrastructure refining The inadequate I think that Ghana will develop and become industrialized and become develop will I Ghana that think According According to the Energy Commission of Ghana, building In In 2009, South Africas New Alpha Refinery signed a Ghanas existing refinery, the (TOR), has a has (TOR), Refinery Oil Tema the refinery, existing Ghanas TOR is of for much emerging down 2009, shut being After Tullow s fleet of helicopters used for offshore operations offshore for used Tullowhelicopters of fleet s and and BOST aim is to become a logistics hub, with storage, regional leader in crude refining: an expanded refining capacity refining refining: expanded an crude in leader regional will the position to country of take advantage the inadequate Africa. West in capacity refinery additional oil refineries looks very certain. very looks refineries oil additional additional refinery capacity will allow Ghana to become the problems of assuring reliability of supply of petroleum products, petroleum constraint of to supply of the supply reliability of assuring of petroleum says, products [but] Buah problems and poses Armah-Kofi Emmanuel Minister Energy Deputy with oil coming production on stream soon, the prospect of construct a US$6 billion refinery that could be producing 200,000 producing be could that refinery billion US$6 a construct bpd by 2015. domestic demand and also supply the regional export market with market export regional the supply also and demand domestic products. petroleum memorandum of understanding with the government to expanding TORs capacity by about 100,000 barrels, an estimated an and process, the is from a government barrels, restructuring financial 100,000 about by capacity both TORs meet can expanding refinery the that so million, US$300 of investment met by imports from bulk distributors such as Cirrus and Fueltrade. and Cirrus as such balance the with needs, of 60% Ghanas about only supply can distributors bulk from imports by met improve the bulk transportation of petroleum products. and to for markets, and local export capacity products. refining increase petroleum of transportation bulk the improve which bpd, 45,000 only of capacity with Unit Distillation Crude Investments in refining in to Investments both planned, or made being currently are investments Major transportation, supply and distribution facilities for the industry the for facilities distribution and supply transportation, here. emerging refineries, fertilizer plants, and electricity generation plants. generation electricity and plants, fertilizer refineries, state- the of Director Managing Akoto, Yaw Dr. gas, on says based (BOST), Company and Transportation Oil Bulk Storage owned AMAJA AMAJA Oilfield Services, including gas processing plants, 101101ogj_Ghanainsert_13 13 13 our core business of oil trading and bulk distributions, says Chief Financial Officer Joseph Abuabu Dadzie. Partnerships with foreign companies will play a major part in the expansion of the business of Cirrus, Mr. Abuabu Dadzie says. In order for us to expand and locate our terminals strategically, we need capital, and people with the right skills, he explains. Ghana is still building capacity in this industry, so there are many opportunities for partnerships. At Cirrus, we have worked with many international companies and we would be looking to work with companies that have similar Downstream Market objectives to further grow. And from its platform in Ghana, Cirrus is now planning an ambitious expansion of its export business, first in West Africa, and then, as offshore oil production surges, further afield. One way of achieving strategic growth at Cirrus is to expand our frontiers by not only importing products, but exporting as well, John Taylor says. Thanks to the infrastructure that Cirrus now has on the ground, the company will also be able to serve the landlocked African markets of Burkina Faso, Niger and Mali. We are looking to increase our export business and we are presently concentrating our efforts on the West African market. It is a market we understand and can follow its growth opportunities. Then we may also look at other opportunities as they come along, especially as Ghana may very well Gantry cranes at Tema port become a net petroleum exporter in the near future. These investments will be crucial to the mining, aviation and offshore exploration The partnership between Cirrus and development of an export-based oil industry. and production industries. energy trading giant Vitol has laid the Privately owned Cirrus Oil Services Security of supply is very important to foundations for the growth of the currently has two tank farms, with a capacity us, explains Ivy Apea Owusu, General companys export business, and Mr. Taylor of 30,000 and 36,000 cubic meters, in Manager, Commerce, at Cirrus, so our says it provides a good indication of what Tema and Takoradi respectively. Taking a goal is to ensure that we have the necessary can be achieved when Ghanaian and infrastructure to foreign companies work together. support this. All These are the sort of partnerships we With our local expertise, industry of our installations are looking for, Mr. Taylor says. Cirrus knowledge and track record as a meet international brings local knowledge, infrastructure key player in this space Cirrus is environmental and and local logistics, while Vitol brings market strategically placed as a local partner knowledge, financial muscle, sophisticated of choice for potential investors health and safety regulations, Ms. risk management tools, and others. This is John Taylor, Executive Director of Cirrus Oil Apea Owusu says, what we are looking for from partners for and they even our expansion plan for Tema. proactive approach, Cirrus plans to expand exceed some of the Ghanaian standards, as With our local expertise, industry its Tema terminal to cater for the increased we are looking ahead to doing more knowledge and track record as a key demand and supply requirements in the business at the international level. player in this space, Mr. Taylor says, market. The company has customers across We very early on recognized the Cirrus is strategically placed as a local a wide range of sectors, including the strategic need for the terminals, to facilitate partner of choice for potential investors.

101101ogj_Ghanainsert_14 14 10/18/10 10:04 AM 14 BOSTs role In the public sector, the government is injecting US$683 million into BOST, and the company has drawn up an extensive program for expanding the national petroleum storage and distribution network. At the port city of Takoradi, BOST is currently constructing a 160,000 cubic meter storage facility, at a cost of Market Downstream US$160 million, which will include tanks of various sizes and a loading gantry. The terminal is poised to play a vital role in the export of petroleum products. The second phase of the expansion process will involve the Takoradi pipeyard construction of a 500,000 cubic meter storage facility and export terminal for crude oil, as well as storage and Fueltrade increases capacity processing facilities for refined products, natural gas, LPG, Meanwhile, local rival Fueltrade, another Bulk Distribution propane, and natural gas liquids. Company of petroleum products, is also investing in increasing And BOST is also drawing up the visionary blueprint for the storage capacity of gasoline, gasoil and LPG, to respond to the rise development of the countrys Natural Gas Transmission Infrastructure, in market demand and to improve its supply chain. and for aggregating gas from the West Africa Gas Pipeline (WAGP) The Ghanaian government expects demand for major petroleum and distributing it in Ghana. products - gasoline, kerosene, gasoil and LPG - to increase from 1.62 This will be based on the construction of a nationwide network million tonnes in 2005 to 2.49 million tonnes by 2015, an average of natural gas transmission pipelines that will cost an estimated annual growth rate of 5.3%. To ensure security of supply, Chief Executive Chris Chinebuah says that by the third quarter of 2011, Fueltrade will construct two gasoil tanks at the Tema Oil Refinery, with a total capacity of 40,000 cubic meters, one gasoline storage tank of 40,000 cubic meters, and two market tanks of 5,000 cubic meters each for gasoline. And at this site Fueltrade will also become the first company in western Africa to use environmentally friendly mounded bullet tanks for LPG storage. Fueltrade is the main supplier of LPG in Ghana.

Ghana has become a focal point with the oil discoveries, and clearly a lot of activity is going to be generated Chris Chinebuah, CEO of Fueltrade and Bulkship & Trade

This tank farm project will allow the company to increase its market share, Mr Chinebuah explains. With the economic expansion, we expect weekly consumption in Ghana to increase by 30 - 40 % by the end of 2010, he says. There is a clear lack of storage capacity for liquid fuel and LPG in Ghana and the Tema tank farm is a crucial project for the country. Fueltrade is also eyeing the regional export and plans to form a joint venture to help it increase its share of the market. Obviously we have future plans to sell to other West African countries, Mr. Chinebuah says, but for the time being our main focus is the completion of the storage tanks that we are building in Tema.

101101ogj_Ghanainsert_15 15 10/18/10 10:04 AM 15 US$1.27 billion. The cornerstone of the Simon Dornoo, we will build on our plan is the US$910 million Western Gas strengths as the largest and most capitalised Transmission System that will provide gas domestic bank. from the offshore discoveries and from the To work with international companies, WAGP to energy-intensive bauxite, iron the bank is planning to build capacity ore, manganese, ceramics, and silica plants. based on strategic partnerships with According to the Energy Commission, foreign banks, and it has already built any shortfall in gas supply from Nigeria good relationships with banks in Norway, could be made up by LNG; it is which have extensive experience in the recommending the construction of an Cirrus Oil loading gantry industry, and also with some US banks. LNG re-gasification facility, possibly in With average loan-to-deposit ratios in partnership with the Côte dIvoire. And in the banking sector in the country of the future, because the design of the around 60%, there is a lot of capacity to WAGP enables gas to flow both ways, lend for the short term in Ghana, and this there is the exciting long term possibility capacity should rise as oil production starts Downstream Market of Ghana exporting gas to neighboring and the economy expands. And as the countries. local economy becomes more stable, Mr Dr. Akoto at BOST emphasizes that Dornoo expects the financing environment foreign know-how and capital will have a to improve. With inflation now moving major role to play in realizing this vision of into single digits, there is some light at the the country emerging as regional energy Cirrus Oil tank farm in Tema end of the tunnel, he says. Banks will powerhouse. very soon be able to raise longer term In the downstream there is need for funding, by issuing local currency bonds partnerships, both to introduce capital, and in order to meet their long term funding also to provide technology for industrial requirements. plants, Dr. Akoto says. Companies will Private downstream sector players also come here to invest in establishing export point to opportunities for well capitalised businesses, and this process will help foreign banks to enter the market. to develop the national downstream The interest rates charged by our local infrastructure. banks are very high, and there is a good opportunity for international financial Access to finance institutions to take advantage of the situation The authorities are also addressing in Ghana by syndicating with Ghanaian weaknesses in the local financial sector, to banks, says Mr. Chinebuah at Fueltrade. make it easier for companies to raise My message to the financial institutions financing for their investments. outside is that there is a good appetite for There are huge opportunities coming business in Ghana. up with the oil and gas discovery in Ghana, Thats a view echoed by Cirrus. We but the oil and gas industry is very capital need a lot of capital to expand, Joseph intensive, says John Taylor at Cirrus, and Abuabu Dadzie says, but the traditional until now most banks in the country have mindset for the local banks has been to Tullow operators at Tema port not had the necessary capital requirements rather take a short term view, and as a for financing these kinds of projects. result, you have to rely on international To help improve access to finance in minimum capital of 60 million cedis banks rather than local banks. the oil and gas sector and increase the (US$43 million), up from 7 million cedis lending capacity of local financial institutions, (US$5 million) previously. Ports of call One domestic bank And anyone who doubts the dynamism that will play a major role of the energy industry that is emerging in We will focus on financing in financing the expansion Ghana need only pay a visit to the port businesses that provide services of the downstream sector of Takoradi. to the companies engaged in is Ghana Commercial Fast becoming a major service base for exploration and production Bank, which has a history the offshore oil and gas industry, the port of nearly sixty years and of Takoradi is being transformed, and is a Simon Dornoo, Managing Director clear illustrate of just how much progress of Ghana Commercial Bank is the best capitalized bank in the country. the country is making in attracting major We will focus on foreign companies and investing for its in 2009 the Ghanaian central bank raised financing businesses that provide services future role as a regional energy powerhouse. the capital requirements for banks: by the to the companies engaged in exploration The Ghana Port and Harbors Authority end of 2012, all banks in Ghana must have and production, says Managing Director (GPHA) has a Master Plan for Takoradi

101101ogj_Ghanainsert_16 16 10/18/10 10:04 AM 16 that includes: deepening access channels; extending the break water; re-engineering the existing harbor basin; relocating the existing dry bulk and liquid bulk facilities; and developing oil services terminals and container terminals. And improving Ghanas port infrastructure will be crucial to realizing the countrys goal of becoming an energy and trade hub for West Africa, explains Nestor Percy Galley, Director General of the GPHA. The emerging oil and gas industry opens up new business opportunities, and the GPHA is repositioning Takoradi to take Market Downstream advantage and revamp activities in the port, Mr. Galley says. The goal of the GPHA is to transform Takoradi into an international oil and gas services hub. The port of Takoradi will be repositioned to service the downstream players in the oil and gas industry across West Africa and beyond. The GPHA has also leased port lands to operators in the oil and gas industry for the private development of oil related facilities, and is training its managers and staff to acquire the skills and knowledge needed for this industry, which is new to Ghana. West Africa is emerging as a major oil region, but, none of the seaports in the region is equipped to provide efficient support services to the companies engaged in the exploration and production of oil and gas, Mr. Galley says. Our vision for the port of Takoradi is to fill this niche in an efficient and innovative way.

The goal of the GPHA is to transform Takoradi into an international oil and gas services hub. The port of Takoradi will be repositioned to service the downstream players in the oil and gas industry across West Africa and beyond Nestor Percy Galley, Director General of the GPHA

Mr. Galley says that there will be major opportunities for the private sector in improving transport infrastructure, by providing the capital resources and technical know-how needed. Partnerships between the public and private sectors will be required to realize the potential of Ghana as a maritime hub, he says. Because of the countrys economic and political stability, it is positioned to become a maritime and energy hub for the region of Western Africa. Ghanas central location in West Africa provides easy and convenient accessibility to other economic centers in the region, Mr. Galley explains. The ports of Ghana have already acquired a critical mass of captive traffic, and the emerging oil industry is providing a stimulus for further diversification and economic growth. As any visitor to Takoradi can see, with the opportunities available to the private sector across the Ghanaian downstream and beyond, foreign capital and finance is already mobilizing to play a part in the transformation of the countrys economy. The estimate for business opportunities in the oil and gas services sector is about US$5 billion per year, concludes George Aboagye, the Chief Executive Officer of the Ghana Investment Promotion Centre. That figure includes refineries, petrochemical industries, infrastructure, real estate, tank farms and storage, environmental protection and control, hotel services, manufacturing, information and communications technology, and many others.

101101ogj_Ghanainsert_17 17 10/18/10 10:04 AM 17 Powering up New gas supplies and power producers to transform the electricity market Power

n conjunction with the development independent power producers will have to right, those 2,000 MW will not just be for I of the upstream energy sector, the provide some of that new capacity. Ghana, but for the region as well. Ghanaian government has ambitious Private investment will have to come According to the government, US$3 plans to expand electricity generation and up with at least 2,000 MW of the target, Mr. billion of investments are needed to meet transmission across the country. Andoh Awotwi estimates. The fundamentals the current increase in electricity demand New and cheap supplies of gas, from make sense to potential investors - and if of about 7% per year, and to extend access offshore discoveries and from a newly we get the infrastructure and the network to electricity from 66% of the population operational pipeline from Nigeria, will now to 100% of Ghanaians in 2020. help enable universal access to electricity for all Ghanaians, and end the power Export hub shortages and supply shortfall that have In the transmission sector, GRIDCo has cramped the development of the economy. already embarked on a major investment Private capital will have a major role to program over the next five years. These play in expanding the national generation investments will ensure that there is and distribution system, turning Ghana adequate transmission capacity in Ghana, into a net exporter of electricity and the and reduce electricity losses on the system hub country of the West African Power to 18% by 2015, from about 25% now. Pool (WAPP). Thermal plants key to growth We are aggressively dealing with the The country has a major new opportunity need to modernize the network, Charles because of the oil and gas discoveries, says Darku says. We have calculated that we Charles Darku, the Chief Executive Officer need approximately one billion dollars to of GRIDCo, the national transmission bring our transmission network to where system operator. We want to see some of we want it to be. We have already started the gas being used to generate power, and to receive expression of interest from the make sure that there is sufficient transmission private sector. capacity. Our mission is to operate the These investments in generation and transmission service in an open and non- transmission will help Ghana achieve its discriminatory manner to all interested ambition to become a net exporter of parties, says Mr. Darku. Akosombo Dam electricity by 2013; the country has the The spinning off of GRIDCo from the best transmission network in the region VRA in 2006 has led to a level playing field and already exports to Benin, Togo and for competing electricity generators, and Burkina Faso. after years of underinvestment and over- And as the clear leader in electricity in reliance on hydropower, generation West Africa, Ghana is poised to develop a capacity in Ghana looks set to increase whole new stream of export revenues 66% by 2013. based on serving a market of over 250 The governments target is to have 5,000 million potential customers. MW of installed capacity by 2015, up from We really want to expand into West around 2,000 MW now. Kweku Andoh Africa, and we are working with the WAPP Awotwi, Chief Executive of the state-owned secretariat to develop high level voltage Volta River Authority (VRA), the dominant interconnections, says Mr. Darku. electricity producer in the country, says The first of these links is coming to that in addition to investment from VRA, Extending grid capacity completion. Soon we will have a major

101101ogj_Ghanainsert_18 18 10/18/10 10:04 AM 101101ogj_Ghanainsert_19 19 10/18/10 10:04 AM 19 coastal backbone which will transform the hydroelectricity project at Bui, in northern power transfer market in West Africa we Ghana, and recently completed a 200 MW will have the entire Abidjan, Accra and Sunon-Asogli Power Plant at Kpone. The Lagos axis linked together. pan-African Africa Finance Institution is funding a US$450 million, 340 MW Generation independent power project in Tema that In addition to GRIDCos ambitious investment will come on stream in 2011. program, ramping up generation capacity Meanwhile, the Abu Dhabi National across the country will be critical to achieving Energy Company, or TAQA, has signed an this vision of exporting electricity. agreement with the Ministry of Energy to expand the capacity of its 220 MW joint Our mission is to operate the venture with VRA in transmission service in an open Takoradi by 110MW. and non-discriminatory manner We have a partnership Power to all interested parties with TAQA, as they Charles Darku, CEO of GRIDCo are looking to expand their business here, which is a clear vote WAGP station Already, about 1,220 MW of new of confidence in both Ghana and VRA, generation plants have been proposed to says Mr. Andoh Awotwi. But we are also commence construction by 2011 and be seeing others, and we would welcome wind and solar resources. Renewables are completed by 2015, according to the partnerships with more industry leaders, definitely the future, and at VRA we are Energy Commission of Ghana. so that our business can continue to grow. planning to generate about 150 MW of This new generation capacity will also And as part of its effort to diversify wind and solar power over the next three diversify the sources of electricity, ending the Ghanas sources of electricity, and to ensure years, Mr. Andoh Awotwi says, equivalent countrys reliance on hydroelectricity and oil. security of supply, the government is set to to 10% of VRAs portfolio. VRAs massive 1,020MW Akosombo stimulate the use of dam, still accounts for over half of the new renewable energy Renewables are definitely the countrys total installed capacity. The dam technologies such as future, and at VRA we are planning formed the worlds largest man-made wind and solar power, to generate about 150 MW of wind lake when constructed in the 1960s. But now that most of the and solar power over the next VRA and foreign investors are now investing countrys hydroelectricity three years in gas-fired and new energy generation potential is being used. Kweku Andoh Awotwi, CEO of VRA technologies. A renewable energy Foreign interest in generation in Ghana law that is currently is already increasing and helping to reduce going through parliament will provide a New gas supplies the power deficit. Chinese investors are regulatory framework that will enable It is Ghanas access to new supplies of constructing a US$600 million, 400 MW Ghana to maximize the potential of its low cost gas that will feed the thermal plants that are currently planned, underwriting Ghanas position as the energy hub of the region, and ensuring that the power disruptions the country suffered in 2006 to 2007 are not repeated. From 2010, gas supplies have been flowing from Nigeria to Ghana in the West African Gas Pipeline (WAGP), a 678 kilometer project in which Chevron is the largest shareholder, with a 36% stake. These gas supplies will gradually substitute oil in Ghanas thermal power plants with much cheaper natural gas, ensuring Ghanaian industry and consumers benefit from lower priced electricity. Jack Derickson, the outgoing Managing Director of the West African Gas Pipeline Company, said in an interview in May that right now, the thermal power plants Solar to become part of the equation are running on crude oil, which is very

101101ogj_Ghanainsert_20 20 10/18/10 10:04 AM 20 Power 10/18/10 10:04 AM Ghana has been generous with foreign with generous has been Ghana And so far, the country has played its has played the country And so far, investors and welcoming to foreign companies, foreign to welcoming and investors says. Awotwi Andoh Mr. The government realizes that once the right rules are put in put are rules right the once that then realizes field, playing level a is there and place, private investment will come in. cards right, and foreign investors are now are investors foreign and right, cards of the growth in the part a major playing sector. power Offshore wind farms a possibility in the future? the in a possibility farms wind Offshore sector remains attractive. You only have to have only You attractive. remains sector country a see to Nigeria to door next look with lots of oil and lots of gas, but no because the electricity, micro economic not set were properly, Mr. fundamentals to have we says. Ghana In Awotwi Andoh sure make and countries have other we from learn and gas the have we that now that, we also power, to export opportunity the investor. the for framework right the have We have 800 MW of thermal 800 power have MW We of thermal But Mr. Andoh Awotwi at VRA cautions VRA at Awotwi Andoh Mr. But With new supplies of gas and renewable and gas of supplies new With Since May 2010, some 30 mmscf/d of mmscf/d 30 some 2010, May Since The The governments aim is for every that the government must keep its eye on eye its keep must government the that the in the ball, and investing implement electricity rate that sure make to increases electricity electricity to the as countrys its potential and fulfill base, industrial expanding Africa. West for hub energy the energy, energy, and infrastructure, increased investments transmission and in generation of its supply set to improve looks Ghana million cubic feet of gas to supply the new the supply to gas of feet on-stream. cubic million coming are that sources thermal today and in the next three to five years we years five to three next Andoh the in Mr. and MW, today 500 another adding be will at says. VRA Awotwi will 120 need We gas has been flowing through the pipeline, the through flowing been has gas VRA a at electricity of MW 110 generating Takoradi. in plant power either from Nigeria via African the Nigeria from either West and field Jubilee the from or Pipeline, Gas discoveries. gas offshore other thermal generation plant to plant by be fueled generation thermal the gas with coming oil, than rather gas, expensivecrude. to compared costs gas natural is fuel about 40% the to of 50% 101101ogj_Ghanainsert_21 21 21 A Champion for Africa Playing its cards right and attracting investment Conclusion T hese have been momentous months for Ghana. To scenes of national jubilation, the countrys soccer team performed better than any other side from Africa in the World Cup, knocking out the US and coming agonisingly close to a semi-final place. Meanwhile, on the economic front, the Floating Production and Storage Vessel for the Jubilee field, the Kwame Nkrumah, has arrived in Ghanaian waters after its long journey from Singapore. In November or December, after an impeccable fast-track development process, the FPSO will start pumping from Jubilee the Ghana has achieved a fine balance between their stakeholders, and a commitment to first of the oil that will have such a dramatic the need to attract investment, and ensuring corporate social responsibility. economic impact on the country. the best deal for the ordinary Ghanaians who In this respect, it is the major International Both events show how Ghana is proving are the ultimate owners of the oil and gas. Oil Companies, rather than their state-owned itself to be a champion for Africa, a democratic Perhaps the only surprise in the debate over counterparts, which may be the best candidates and stable Africa which at last has the Jubilee was that ExxonMobil and Kosmos for helping Ghana to maximize the value of the confidence to punch its own weight with the Energy so underestimated the strength of discoveries for all of Ghanas stakeholders. international community, and to make the feeling in Ghana surrounding the management And just as the IOCs need to enter Ghana most of its human and natural resources. of the countrys hydrocarbon resources. to increase their reserves, Ghana also needs to It is perhaps that confidence that explains But Ghana must be careful too. Foreign partner with the IOCs to maximize the value Ghanas confrontation with ExxonMobil over investment in both the upstream and the of its oil and gas. the energy giants bid to acquire the Kosmos downstream will be crucial to the governments Although peak production in Ghana could stake in Jubilee. plans to transform the country into a middle- be relatively short lived, Ghana now has a For years now, Africas natural resources income economy by 2020. window of opportunity ahead of it, in which it have only served to enrich western shareholders And although independents such as can develop into a regional hub for the West and corrupt officials. It is only to be expected Tullow and Anadarko have done a great job African energy industry and a magnet for that the most democratic and transparent in deepwater exploration, Ghana also needs foreign investment from across the world. country in Western Africa will apply the utmost to form partnerships with international big We are going to become a different caution when analysing transactions that hitters such as ExxonMobil, who can put category of economy, says George Aboagye, affect such a fundamental part of its economy. their financial and technical might to work, the Chief Executive Officer of the Ghana Ghanas emerging regulatory framework in making the most of these discoveries and Investment Promotion Centre. The worlds clearly points to the countrys concern that best managing the risks. financiers and developers are now looking at ordinary Ghanaians must benefit from the oil The Deepwater Horizon disaster has Ghana to see how they can make the most of and gas discoveries. dramatically illustrated just how great those all the opportunities that are available here. The country is drawing up legislation to risks can be. In the context of the emerging Transparent partnerships with foreign ensure the appropriate macroeconomic offshore industry in Ghana, the Gulf of capital will be essential to the development of management of its hydrocarbon revenues. It Mexico spill also shows how important it is Ghanas energy sector. And the eyes of the also has ambitious plans to develop its for deepwater operators to have the financial worlds oil and gas industry are now on downstream industry onshore, and to and technical capacity to manage the huge Ghana, to see how this most promising of leverage its offshore gas to export electricity challenges of deepwater production, as well African countries manages this once-in-a- across Western Africa. as to have a culture of transparency with lifetime opportunity.

101101ogj_Ghanainsert_22 22 10/18/10 10:04 AM GHANA GENERAL DATA reference webs

Country Official Name: Republic of Ghana Global Competitiveness: 114/133 Capital: Accra (-1 GMT) Inflation rate: 19.6% (2009 est.) Ghana National Petroleum Company Government: Constitutional Democracy Labour force: 10,33 million (2009 est.) www.gnpcghana.com President: John Evans Atta Mills (Jan 2009) Main industries: mining, lumbering, light Volta River Authority Independence: 6 March 1957 (from the UK) manufacturing, aluminum smelting, food www.vra.com Legal System: Based on English common processing, cement, small commercial ship law and customary law; has not accepted building, oil & gas GRIDCo compulsory ICJ jurisdiction Natural resources: gold, timber, industrial www.gridcogh.com Administrative division: provinces (10) diamonds, bauxite, manganese, fish, rubber, National Petroleum Authority Official language: English hydropower, petroleum, silver, salt, limestone www.npa.gov.gh Location: West Africa Exports: $5,737 billion (2009 est.) / $5,275 Climate: Tropical billion (2008 est.) Tema Oil Refinery Total Area: 238,533 sq km / 148,218 sq mi Export commodities: Gold, cocoa, timber, www.torghana.com Land Area: 227,533 sq km / 141,382 sq mi tuna, bauxite, aluminum, manganese ore, BOST Population: 24 million (July 2010 est.) diamonds, horticulture www.bost.com.gh Currency: Cedi - GHC ($0,70 - Sept. 2010) Imports: $9,807 billion (2009 est.) / $10,26 GDP/PPP: $36,57 billion (2009 est.) billion (2008 est.) Ghana Investment Promotion Centre GDP per capita: $1,500 (2009 est.) Import commodities: Capital equipment, www.gipcghana.com Growth: 7.3% (2008 est.) / 4.7% (2009 est.) petroleum, food Ghana Ports and Harbour Authority www.ghanaports.gov.gh Cirrus Oil Services GHANA S PETROLEUM RESOURCES www.cirrusoilghana.com Fueltrade The exploration history: Offshore: www.fueltradeghana.com Initial Phase: 1896 - 1967 50,000 sq km / 19,305 sq mi Bulkship & Trade Second Phase: 1968 - 1980 Offshore drilling density: www.bulkshipghana.com Third Phase: 1981 - 2000 1 well to 450 sq km / 174 sq mi Kosmos Energy Current Phase: 2001 - To Date Number of offshore licenses: www.kosmosenergy.com Ghana Sedimentary Basins: 13 Tullow Oil Côte dIvoire-Tano Basin including FPSO capacity: www.tullowoil.com Cape Three Points Sub-basin Oil: 120,000 bpd (Cretaceous target) Ghana Commercial Bank Gas: 160 mmcfd Central (Saltpond) Basin (Paleozoic www.gbc.com.gh Offshore players (operators & partners): Basin-Devonian target) AMAJA Oilfield Services Accra/Keta Basin (Tertiary & Tullow Oil, Kosmos Energy, Anadarko www.amajaoilfield.com Cretaceous Targets) Petroleum, Sabre Oil & Gas, EO Group, Oilfield Training Centre Inland Voltaian Basin (Paleozoic Basin) ENI Ghana, Vitol Upstream, Hess Ghana Exploration, Lukoil Overseas, Gasop Oil www.oilfield-training.com Total resource base: Ghana, Oranto Petroleum, Lushann, Eternit 26 billion barrels of oil equivalent (est.) Ministry of Energy Energy, Tap Oil, Challenger Minerals, Afex www.energymin.gov.gh Total sedimentary coverage: Oil, Afren Energy, Mitsui E&P Ghana, 157,000 sq km / 60,618 sq mi GNPC Ministry of Finance and Economic Planning www.mopef.gov.gh ELECTRICITY (HYDRO AND THERMAL) Ministry of Transportation www.mrt.gov.gh 2010 2015 Ministry of Information Installed capacity: 1,856 MW 5,000 MW www.ghana.gov.gh Electricity penetration: 50-60% 85% Transmission lines: 4,000 km Energy Commission Annual growth: 7% www.energycom.gov.gh West African Gas Pipeline Company www.wagpco.com Sources: BPs Statistical Review of World Energy 2010, CIA Factbook, GNPC, IMF, Kosmos Energy, Oil & Gas Journal, Tullow Oil, US Energy Administration

101101ogj_Ghanainsert_23 23 10/18/10 10:04 AM 101101ogj_Ghanainsert_24 24 10/18/10 10:04 AM