Accra, April 01, GNA – Mr David Ampofo, Chief Executive Officer of Ghana Upstream Petroleum Chamber says Ghana has a lot of gas and oil resources and with right policies, partnerships and attitude, it can produce more for export.
He said the government must create an attractive environment where people with expertise and resources in the energy industry would invest, thus, bridging the gap where partners would truly act as partners and not as adversaries.
“We must create a place where people with expertise and resources in this business will want to come to risk their money; knowing that the returns are good and that ultimately there is a true partnership. That for me, is the principal thing to do for the brighter future of the Ghana’s gas sector,” he stated.
Mr Ampofo made the statement at a day’s national dialogue on the future of Ghana’s Gas Sector organized by the Natural Resource Governance Institute (NRGI) and the Africa Centre for Energy Policy (ACEP), which was to promote a shared understanding of the sector.
The dialogue sought to re-examine the gas sector bottlenecks that hinder the realization of value from Ghana’s gas resources for national development; and to explore the key questions surrounding the role of gas in Ghana’s plans for around energy transition and its net-zero ambitions, including the relationship between gas and other fuel sources (renewable and non-renewable) and financing challenges.
Mr Ampofo said, “if Ghana really want to see a change in positive direction of gas production, then there must be understanding in the regulatory and the business environments.”
He said Ghana was not doing badly because in the 1980s, the country was spending so much in crude and the reliance on gas pipelines from Nigeria but has now discovered its own gas and we need to put in place the infrastructure – the pipelines to the let the product flow.
A concept note by NRGI and ACEP said in a recent stakeholder’s consultation on energy transition by the newly constituted National Energy Transition Committee led by the Ministry of Energy, the need for the gas sector to play a pivotal role in the transition to net-zero was strongly advocated by government.
“Based on this, it is expected that the National Energy Transition Strategy will reflect much more rigorously the challenges and opportunities currently faced in the gas sector and that two major challenges will need to be addressed, which are the gas market challenges and investment in the upstream sector,” it stated.
The note said the first challenge was that the gas sector has consistently suffered delayed payments and created significant inter-agency debt within the gas and power sector value chain and that Ghana currently owed US$150 million dollars for gas supplied from Sankofa.
“At the same time, Ghana Gas owes GNPC about US$664 million due to chronic non-payment for gas supplied to the power sector. While additional gas infrastructure is required for gas utilization could impose a financial burden on the country’s already stressed fiscal situation.
It said the country continued to witness low investments in exploration, which could make it difficult to generate the supply necessary to realise the government’s ambitions.
“Many of the companies have consistently failed to deliver on their minimum work obligations without any sanctions. Since 2014, only five exploratory drilling campaigns have been embarked on, yielding four successful discoveries, all of which are pending appraisal,” it noted.
The note said these challenges would have to be resolved to ensure a robust gas market that optimizes investment in the gas sector.
It stated that the free 200 bcf foundation gas from Jubilee, which could be exhausted by 2023 has already been sucked into the inefficiencies in the current market.
“This implies that if the market challenges remain unresolved, a heavy fiscal burden would be placed on the State when any subsequent gas from the Jubilee field must be paid for. The market condition also has implications for investment attraction.
“Also, there is the need to enforce contracts to ensure the growth and replacement of domestic gas reserves,” it said.
Dr Riverson Oppong, Manager, Commercial Operations – Ghana Gas in a remark said the free 200 bcf foundation gas from Jubilee field, which would end in 2023 should be of great concern to the entire country.
GNA