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Aker's Ghana project secures funding boost

Aker Energy’s planned Deepwater Tano/Cape Three Points development is benefitting from a regional initiative

The Africa Finance Corporation has invested $100mn in the Ghanaian subsidiary of Norway's Aker Group to help finance development of the country's Deepwater Tano Cape Three Points ( DWT/CTP) block.

The AFC has agreed to invest the amount in Aker Energy in convertible bonds, as part of its plans to take on an early equity financier role in upstream assets on the continent.

Aker has now said it plans to produce oil from the block's Pecan field initially. It completed appraisal drilling there in April.

The reserve estimate for the first phase of the DWT/CTP development is 334mn boe, with subsequent phases on the block potentially adding a further 110-210mn boe, based on discovered contingent resource estimates. Early results from the appraisal suggests its Pecan South prospect could add another 5-15mn boe.

First oil from the Pecan field could be produced 35 months after a final investment decision, according to Aker, which holds a 50% stake the block along with Russia's Lukoil (38pc), local firm Fueltrade (2pc) and state-owned Ghana National Petroleum Corporation (10%).

Wider Ghana involvement

AFC also provided $50mn of financing in 2009 to support the Jubilee field oil development, operated by Anglo-Irish firm Tullow. Ghana became an AFC sovereign shareholder in 2018, following an initial $10mn investment, having been a member since 2011.

The AFC noted that the DWT/CTP project would help Ghana to meet its production targets for the mid-2020s. In February, Aker's discoveries prompted the government to forecast that Ghana's production would rise from 196,000 bl/d in 2019 to 420,000 bl/d in 2023 and 500,000 bl/d by 2024.

Over half of Ghana's production comes from the Jubilee Field, with other significant production coming from the Eni-operated Offshore Cape Three Points block where gas is produced from the Sankofa projectand Tullow's TEN project adjacent to the maritime border with Cote d'Ivoire.

Eni made a gas and condensate discovery with its first exploration well on the OCTP-Block 4 earlier this year. Eni and Vitol were also awarded an exploration and production license for Block WB03 in western offshore Ghana in in early July, which was offered as part of the country's first licensing round launched in 2018.

Under the terms of the $100mn financing, the bonds have a coupon of 5.5pc/yr and will be converted to equity in the event of an initial public offering (IPO) of Aker Energy, at an agreed discount to an IPO offering price of 1.85pc/yr.

The bonds have a maturity of five years, with an option to extend for a further three years. As part of the pact, AFC received equity warrants with the right to subscribe to shares in Aker Energy in any future offerings by the company of up to 50-100mn, AFC said.

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