Talking Drums

The West African News Magazine

Many, many years of drilling in Ghana

Poku Adaa

Prospecting and exploration of oil off the shores of Ghana have been going on since the end of the 1960's and may well go on for some years to come. Still, the nation is waiting, wailing, praying and hoping for the day of the oil boom and then... Our correspondent, POKU ADAA, reviews the two decades of oil search in Ghana.
The interest in oil and gas production in many West African countries dates back to nearly two and half decades ago, although the often quoted world- wide oil price increases of the 1970's intensified national and regional efforts to search for oil. Oil was seen then and is still seen, as the survival kit for many an country. economically weak

In West Africa, oil production has developed in Nigeria, Angola, Congo, Gabon, Cameroon and Ivory Coast. Ghana, like other non-oil producing countries sharing the resources of the Gulf of Guinea, have been promoting diverse schemes for a long time to explore their offshore territories for hydrocarbon fuels.

At least six international Oil Companies have been engaged at various times during the past twenty years in the prospecting and exploration of oil and gas off the shores of Ghana, namely, Texas Pacific Oil Company, Arracca Petroleum, Phillips Petroleum, Agri-Petrol Company of Tulsa and Agip of Italy.

The Saltpond Oilfield, previously known as Bonsu Oilfield, is the only producing field lying in about 90 feet of water and situated at about 15 kilo- metres offshore from the coastal town of Saltpond, halfway between Accra and Cape Coast. It was among the first batch of oil exploration permits granted in 1968, covering nearly 1.4 million acres, to the Signal-Occidental- Amoco consortium.

This later on passed briefly into the hands of Hydro-Carbons of the USA only to have their drilling agreement terminated in May 1977. About 21,000 acres of this concession was then turned over to Agri-Petrol Company (AGRI-PETCO) of Tulsa, a joint venture set up by Texas City Refining Company, National Co-operative Refining Association, McPherson & Indiana Farms Bureau Co-operative Association, all of the USA.

In 1978, the Akuffo government signed a 30 year agreement with Agri- Petco giving it the exclusive right to "explore for and produce petroleum in the licensed area and to carry away, treat, market, sell, export or otherwise dispose of the petroleum..." Consequently, test production began in October of that year with a daily aver- age then of 1,200 barrels per day (b/day).

The crude oil produced there has been proven to be of good quality grade, with a low sulfur content and gravity level f 36-40 API, i.e., light crude similar to Nigeria's famous Bonny Light. Reserves were estimated to stand at 6 million barrels. Due to a recurring series of technical problems, production levels increased to only 2,000 b/day in the middle of 1980 with two drilling wells virtually shut down throughout the year.

In 1981, there were press campaigns and unconfirmed reports that the Salt- pond Oilfield was producing nearly 10,000 b/day instead of the officially reported level of 3,000 b/day. Then from 1982, when the company was hoping to invest extra funds of over $50 million to raise output to between 6-8,000 b/day, it was subjected to poli- tical pressures, further press attacks and revolutionary outbursts which called for a review of its operating agreement. Saboteurs, believed to be extreme left-wing groups, set fire to Agri-Petco's warehouse at Tema turning over $3 million worth of property and equipment to ashes.

The charge that the agreement was a complete sell out of the nation's prime resource conceived to provide the Company with a cheap energy source for her fertiliser and agricultural complex in the US was never denied by the Company and has cast an indelible deep shadow of suspicion on Agri- Petco's activities and intentions.

After nearly six months of no activity, a rapprochement with the government was attained and the Company resumed drilling operations with plans to re-open its closed wells and mount fresh bid for extensive exploration. By the middle of last year, 40,000 tonnes of crude from the Saltpond Oil Fields were reported to have been refined at Tema for domestic consumption.

Elsewhere along the Ghanaian coast- line towards the Ivorian border, oil and gas exploratory activities have been going on for many, many years. By 1973, Phillips Petroleum, the Chief Operating Company in the area, had spent nearly $4 million on prospecting and had two drilling wells off Axim producing approximately 1,000 b/day by 1977. Between 1978 and 1979, Phillips in consortium with Getty Oil and Agip, discovered the South Tano Oilfield situated twenty miles offshore and lying in 310 feet of water. A 12,000 feet well was pumping out 1,500 b/day of 32° API crude oil with associated gas output of 8.2 million cubic feet per Mr Appiah Korang, Ghana's Secretary for Fuel day. In 1979, Ghana renewed its two year old agreement with Phillips giving it the right to undertake oil exploration off the shores of Half Assini.

Agip also in concern with Arraco Petroleum, Oxoco International, Texon Energy and Zapata Exploration, took possession of about 700,000 acres in two blocks in an area fronting the Ivorian border. Another grouping comprising Mobil, Zapata and Phillips, reportedly abandoned the search for oil in 1976 in two unidentified blocks due, apparently, to negative results and lack of any indication of oil potential after seismic studies.

Unconfirmed reports, however, believe that this group merely decided to suppress information on a huge gas bearing loam somewhere between Cape Three Points and Dixcove, estimated at between 3.6-5.17 trillion cubic feet and extending further to Half Assini and the South Tano basin. Shell Petroleum also gave up a 11,000 square miles of exploration area in 1977 for lack of oil potential.

For reasons which have remained fully unexplained, Phillips Petroleum decided to abandon development for the South Tano Oilfields in mid-1983 and slowed down its offshore work enormously.

Earlier this year, 1984, Petro Canada International Assistance Corporation, seeking entry to the oil arena in Ghana began a 5-month exploratory mission during which two test holes were drilled off the coast of Half Assini from which samples were taken for analyses in Canada. This venture was undertaken with a 31.5 million dollar loan granted by the Canadian government. The Keta Basin, near the Togolese border, has also been under study and exploration for several years, notably by Texas Pacific Oil Company, has high hopes that its $3.5 million invest- ment so far will pay when the drilling begins in the latter part of this year.

This eastern portion of Ghana's territorial waters have been little explored and studied. To gather more information on the hydrocarbon potential of this area, the government contracted another American Company, Geo- Physical Services Inc. (GSI) at a cost of $7.3 million to conduct seismic survey in the area to determine the location and extent of oil reserves. The study stretched over a distance of 7,300 kilo- metres from the Togo border and over an offshore area of approximately 2,800 square miles.

After three months of operation, GSI presented its report in the form of 3,700 magnetic tapes to the govern- ment. Armed with what looked like a 'Bank of information and a vault of Ghana's wealth', a four man delegation began a tour of Europe and North America in June this year to hold semi- nars and advertise the potential wealth that has been revealed with the object of attracting foreign investors to continue the many, many years of drilling.

Every government has an obligation to enact definite and specific policies to regulate the exploitation of her resources. Ghana's policies on her natural resources development have been haphazard over the years. The result has been the regular and unceasing public outrage against agreements signed with foreign companies and in- vestors. Consequently, the PNDC government has taken steps to correct this deficiency.

To this end, the government has invited an American petroleum consult- ing agency, Tanzar Natural Resources Associates Inc. of New York, in June 1982 to draft model petroleum contracts and related documents for use in negotiations and renegotiations of existing agreements. The question is, how will such draft models be impartial, knowing that they will eventually be put before other American and European Oil Companies. one wonders whether Ghana has no legal brains left to undertake such an assignment.

In October 1983, the government set up two statutory bodies, the Ghana National Petroleum Corporation (GNPC) and the National Energy Board (NEB). The GNPC was charged to explore, develop, produce and dis- pose of petroleum either alone or in partnership with foreign oil compan- ies. It was given the exploratory rights in areas offshore and inland which are still not covered by existing agreements.

The NEB was instituted to plan a national energy policy for electric power, petroleum and renewable energy sources and to monitor the im- plementation of such a plan. The public look forward to these national bodies to discharge their functions effectively in the nations interest.

Meanwhile, it has been confirmed by the Ministry of Fuel & Power that, so far, 15 more Companies from the USA, Britain, France, Canada, Brazil and Italy have applied for concessions to prospect for oil offshore. The day of the oil boom is not nearer yet, but the nation is waiting, wailing, praying and hoping for the day the burden of fuel imports will cease. Forever that is.

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