By Jeph Ajobaju, Chief Copy Editor
Ghana, better known for gold and cocoa exports, has raised its sights to join Nigeria and Angola in the big league of African oil producers after discovering 1.5 billion barrels of oil and 0.7 trillion cubic feet of gas off its Atlantic coast.
The excitement is not dampened by fears that another glut is likely on the international oil market as members of the Organisation of Petroleum Exporting Countries (OPEC) may ignore agreement to curb output and instead oversupply.
“This is great news for Springfield, Ghana and Africa,” said Chief Executive Kevin Okyere. “We are excited about the discovery as it ties into our vision of becoming a leading African upstream player with a global focus.”
Springfield E&P, the company that made the discovery, said the undiscovered potential of the block was estimated at over 3 billion barrels of oil and gas.
Springfield Group, a wholly-owned Ghanaian firm, is the first independent African energy company to discover oil in deep sea.
Reuters reports that the latest discovery is a significant one in a country that currently produces about 200,000 barrels of oil per day (bpd), about half of it from British company Tullow’s Jubilee field.
The Ghanaian government has been frustrated by the slow pace of offshore development and is working on revising its licensing laws in an effort to spur production.
Its deputy minister for petroleum said in November that the country had expected 14 wells to be drilled and $890 million invested between 2013 and 2016, but not a single well was drilled and companies spent just $95 million.
Ghana is Africa’s second-biggest gold producer (after South Africa) and second-largest cocoa producer after Cote d’Ivoire.
The country is also rich in diamonds, manganese ore, bauxite, and oil – and with a population of 30 million, has one of the highest GDP (Gross Domestic Product) per capita in West Africa.
Rebasement of its GDP in 2011 made Ghana the fastest-growing economy in the world.
Pressure to oversupply oil
Global oil inventories could rise sharply despite an agreement by OPEC and its allies to reduce output further as well as lower expected production by the United States and other non-OPEC countries.
The International Energy Agency (IEA), based in Paris, made the disclosure in a monthly report on December 12.
“Despite the additional curbs … and a reduction in our forecast of 2020 non-OPEC supply growth to 2.1 million barrels per day (bpd), global oil inventories could build by 700,000 bpd in Q1 2020,” the IEA said.
OPEC, led by Saudi Arabia, and other producers including Russia agreed last week to slash output by an extra 500,000 bpd in the first quarter of 2020 in order to balance the market and raise prices, but stopped short of pledging action beyond March.
Even if the group adhered strictly to the new pact – and output from members beset by political troubles like Iran, Libya and Venezuela stayed steady – the IEA said only 530,000 bpd of crude would be withdrawn from the market compared to November production.
It revised down its forecast for supply growth by non-OPEC countries in 2020 by 200,000 bpd “on a continued slowdown in the U.S., reduced expectations for Brazil and Ghana as well as additional cuts by (OPEC’s allies)”.