Aker Energy: 8th extension of submission of PoD for Pecan field not good for Ghana – Steve Manteaw
Former Chairman of the Public Interest and Accountability Committee (PIAC), Steve Manteaw, has shared his thoughts on the eighth extension of the submission of the Plan of Development (PoD) on the Pecan Oil Field by Norwegian oil firm, Aker Energy.
Speaking to norvanreports on the sidelines of the launch of two newly produced reports by BudgiT Ghana on the activities of PIAC and the Ghana National Petroleum Commission (GNPC), Mr Manteaw, described the extension of the submission of the PoD as bad for the country’s oil and gas industry.
His assertion, is premised on the decline in the reserves of the country’s hydrocarbons, declining investments in the sector which is ultimately fueling low oil production year-on-year.
Case in point, is the fact that oil production for last year [2021] declined by some 17% to hit 55m barrels from the previous year’s [2020] 66m barrels of oil.
“When it comes to issues about postponement of submission of PoD, it is not done blatantly. It is done under the regulatory framework of a country and so a company that needs to suspend any particular activity will have to write and seek the approval of the state.
“And I want to believe that there are good reasons for Aker Energy requesting for an extension of the submission of their PoD. I do not have the information to be able to pronounce a judgement on whether that is good or not. But in terms of its impact, of course our reserves are declining and bringing new projects on stream will be good for increasing our output and therefore revenues that are accrued to the state. So to that extent, yes, I will say it’s not a very good development for Ghana,” he quipped.
The government, through the Energy Ministry, has granted an extension to Aker Energy Ghana Limited for the submission of its Plan of Development (PoD).
The decision to grant an extension follows uncertainties about supplier commitments triggered by the war in Ukraine.
This is the eighth-time that Aker Energy has sought an extension of the period within which to submit the organisation’s PoD
The Ministry of Energy has, therefore, extended the period of the submission of the PoD for three months effective June 30, 2022 [ends on September 30, 2022].
The Government of Ghana, Aker Energy, and its licenced partners have agreed to work together on resolving any issues to facilitate the timely submission of the PoD.
The Plan of Development is a legal requirement that details the Plan to develop an oil and gas field in an integrated way, to produce the hydrocarbon reserves optimally by considering the technical, economic, and HSE aspects.
It is approved by the Energy Minister and forms the basis for an oil exploration firm to proceed with the actual development of the field and ultimate production of the first oil. Without a plan of development, an oil firm cannot proceed.
Aker Energy Ghana Ltd. – a subsidiary of Norwegian-based oil exploration and production firm Aker Energy AS – is an exploration and production company and operator of the Deepwater Tano Cape Three Points (DWT/CTP) block.
It holds a 50% participating interest in the licence and the partners: are Lukoil Overseas Ghana Tano Limited (38%), the Ghana National Petroleum Corporation (GNPC) (10%) and Fueltrade Limited (2%).
Missed deadline
The Ghana National Petroleum Corporation (GNPC) had in a letter urged Aker Energy to maintain the current schedule to ensure submission of the Plan of Development (PoD) for the Pecan field by June 30, 2022.
This follows a series of failures on the part of the international oil company to meet timelines for the submission of the PoD to the Ministry of Energy.
Aker Energy had in the past missed several deadlines to submit the PoD to the government for the commencement of the offshore Pecan field.
Upon Aker taking over operatorship of the block from Hess, Aker requested and was granted an extension by the Ministry of Energy to submit the PoD by November 2018.
This request was premised on the fact that Aker needed time to review the work already done by Hess towards the PoD submission before proceeding to submit the PoD.
Aker requested a further extension to March 2019. This timeline was duly met and Aker submitted the PoD on 28 March 2019.
However, upon review of the PoD, the international oil company failed to meet the necessary criteria for approval and hence was rejected. The Minister of Energy then granted a 45-day timeline ending June 2019 for Aker to make the necessary amendments and resubmit.
At the time, Aker sought to rather secure amendments to its Petroleum Agreement to legalise some of the earlier non-compliance issues in its PoD. Due to the amendments to the Petroleum Agreement, the timeline was further extended.
In March 2020, Aker sent a notice of indefinite Postponement of Development in respect of the Pecan Field to the Minister, citing the potentially significant impact of COVID-19 on the development as well as the oil and gas industry as a whole, including the crash in oil price at the time. This notice was also duly acknowledged by the Minister albeit the postponement was indefinite.
Aker in its 2021 Work Programme then committed to submit the PoD by April 2021. This timeline shifted to September 2021 and then December 2021.
On 22 December 2021, Aker wrote to the Minister to extend the timeline to Q2 2022 citing the need to confirm some rates for procurement for cost estimation.
