Aker Energy more likely to exit Ghana’s oil sector – Report

Aker Energy more likely to exit Ghana’s oil sector – Report

Aker Energy, like ExxonMobil according to the Institute for Energy Security (IES) is more likely to exit Ghana’s oil and gas industry should it continue to face cashflow constraints.

Aker Energy in March 2020 announced that a final investment decision (FID) for the Pecan field development project had been placed on hold, postponing the project.

The hold on the development of the Pecan oil field was due to the Coivd pandemic and historic low oil prices coupled with a reduction in the initial $4.4 billion capital investment into the oil field.

In April this year, Aker Energy, however, noted it is set to submit a revised plan of its development of the Pecan oil field to the government by the end of this year.

According to IES, the exit of ExxonMobil from Ghana’s upstream sector followed an observed trend in big oil majors moving away from fossil fuel and investing heavily in renewable energy due to ‘green recovery’ gaining traction coupled with the growing reluctance of banks to provide funding to oil firms in a bid to mitigate their exposure to the sector.

Also Read: Government urged to state its stance on unitisation impasse

“The recent exit of ExxonMobil from Ghana’s upstream hydrocarbon sector follow a similar trend to concentrate on advantaged assets in other places, and to mitigate climate risk and establish new plans that are projected to be consistent with their goals of the Paris Agreement,” stated the IES.

Noting that, Aker Energy seems to be towing the same path.

According to the IES, the exit of oil majors from Ghana’s upstream sector and declining investment in the industry by International Oil Companies (IOCs) coupled with the ongoing support for green energy transition could result in the country’s hydrocarbon resources being stranded, thus denying the country of the badly needed revenue.

Stating further that, it is evident that Government falls short of alternative options to exploit the country’s hydrocarbon resources, without depending on foreign oil companies.