Some energy experts since 2017 have called for a renegotiation of the gas purchase agreement between Ghana and Italian Oil Company, ENI on the development of the Offshore Cape Three Points (OCTP) integrated oil and gas project.
The agreement prices gas from the Sankofa fields at $9.8/MMBtu (one million British Thermal Units) which sent tongues wagging, because a similar arrangement between Ghana and Nigeria was pegged at $8.3/MMBtu, some $1.5/MMBtu less, a situation that raised critical questions.
The arguments against the agreement pointed to bad negotiation resulting in what was suspected to be an overpayment by more than $2 billion.
But in an exclusive interview with JoyBusiness, the Managing Director of ENI Ghana Giancarlo Ruiu said the ENI contract saves Ghana some 40% on the cost of energy consumed daily.
“We need to clarify and we are happy to do so. First of all, you cannot compare the domestic gas to any imported one, like from Nigeria or any other imported one. Why you cannot is because of the peculiarity of the Ghana gas the price of it no matter what the final numbers will include a portion which goes back to the budget of Ghana. In any given year, we calculated how much savings using the domestic gas will offer and if you look at the expected demand of power for next year.”
Mr Ruiu further stated that “the full use of the OCTP of gas from us will see Ghana save about 40% cost of energy being used. It means that every single day that the company remains in operation and the country uses the gas, we will save about one million dollars on energy consumption.”
The Sankofa field forms the first phase of the $7.9 billion Offshore Cape Three Points project (OCTP), which is expected to also deliver up to 180 million cubic feet of natural gas per day by the end of next year, more than doubling domestic gas supply.
“So the price must be calculated using the net coast which finally comes to 4 dollars per one million British Thermal Units. The four dollars is much cheaper than any other source of gas that you can find,” the Managing Director of ENI Ghana stated.
Italian oil company ENI started oil production from the 45,000 barrel-per-day Sankofa field offshore Ghana last year, giving a boost to the West African country’s plans to use its oil resources to revive its economy.
ENI holds a 44.44 per cent stake in OCTP, representing the largest foreign direct investment in Ghana’s history.
Trading company Vitol holds 35.56 per cent in the OCTP block while the state oil company Ghana National Petroleum Corporation has a combined carried and participating interest of 20 per cent.
Meanwhile, ENI and the United Nations Development Programme (UNDP) have entered into a partnership to improve access to sustainable energy and help achieve the Sustainable Development Goals (SDGs) in Ghana and Africa