Why is Ghana Selling its Oil and Gas Blocks?

The West African country is suffering its worst economic crisis in generations and has been seeking investors from countries such as the United States, China and India for its oil and gas sectors.

"For any investor to look at a temporary hiccup as a basis for decisions in Ghana I think would be making a mistake," said Andrew Kofi Egyapa Mercer, deputy minister at Ghana's energy ministry, in an interview with Reuters on the sideline of a conference during the Singapore International Energy Week.

"Post Russia, we have all recognise the need for energy security. And it's important that we are not caught pants down," he added, referring to Russia's invasion of Ukraine.

Mercer said Ghana is marketing oil and gas blocks including both new acreages and fields relinquished by ExxonMobil.

"The plan really is that we do not intend to get any of our assets stranded. (As) all the commitments that the West with respect to the Paris agreements have never been met, so it's important for us to fund our own transition or at least a significant part of it," said Mercer, referring to international agreements on combatting global warming.

Currently, Ghana produces 160,000-170,000 barrels-per-day (bpd) of crude oil and about 325 million standard cubic feet per day (scfd) of natural gas, he said.

Sankofa, a major gas field in Ghana and part of the Offshore Cape Three Points (OCTP), has boosted gas output to 235 million scfd from 210 million scfd after some enhancement programmes, he added.

"We are looking to get to 250 million scfd," said Mercer, adding Sankofa's expansion plan was expected to be submitted to the Ministry of Energy in January or February next year. "That is a significant milestone for us."

Mercer also said African Finance Corp had secured approval to develop the Pecan field project, which will churn out 80,000 bpd of oil. The final investment decision is expected in the first quarter of 2024, with production starting in 2025-2026, he said.

Ghana is also looking to increase clean energy in its power generation mix and export more electricity to neighbouring countries, he said.

Currently, about 60% of Ghana's power is generated from natural gas, 5% from heavy oil and the rest is hydropower and solar.