Ghana aims to speed up
Stranded asset concerns encourage west African nation to get its oil out as quickly as possible
Ghana is in the process of reforming its laws in a bid to quicken the pace of oil production—in case its reserves loses their value before they can be extracted.
“You do not know whether oil is going to remain relevant in the future or not… So, our strategy going forward is that of aggressive exploration,” the country’s deputy minister for petroleum Mohammed Amin Adam told an energy transition debate at Africa Oil Week in Cape Town on Wednesday.
One way in which Ghana plans to increase production is to make it easier to explore in already licensed and productive areas. “We are changing our law to allow companies that are producing within their development and production area to do further exploration… We want to do that to incentivise exploration,” says Amin Adam.
The other major change is to allow the expansion of production areas—so marginal discoveries are exploited. “You can have marginal discoveries tied into a major discovery in order to increase their production,” he adds.
Together these measures "allow us to increase production, so we can recover and extract as much oil as we can”. But, leaving aside the future risks for oil demand, even the current market has challenges, says the deputy minister, citing the US market, which—due to the material growth of its domestic production— effectively has closed as a market for African oil exports.
Uganda goes green
Uganda is also gearing up to try to exploit its hydrocarbon riches, but with less fear about a less carbon-intensive future energy mix. “We now want to tap into this petroleum to extract value from it, which we will then plough back into green energy,” says the country’s minister of energy and mineral development Irene Muloni. “We want to tap into the black gold and plough it back into the green gold."
Ghana plans to make it easier to explore in already licensed and productive areas
Having proven commercial low-cost reserves, demonstrated it is a “peaceful” country and passed new regulations, it has attracted and Total and Anglo-Irish producer Tullow Oil among others. “Everything is in place,” says Muloni.
But Uganda also boasts extensive hydroelectricity capacity as well as solar and wind power potential. “As I speak now, over 90pc of our energy mix is renewable,” says the minister.
Rwanda is also taking a mixed approach aiming at hydrocarbons extraction but also exploiting unconventional and renewable energy potential. The country is pursuing conventional oil and gas at Lake Kivu, which sits on the Albertine Rift that has produced other discoveries. "We are working on the hypothesis of geological similarities we have with some of our neighbours, particularly within the East African Rift Valley," says Francis Gatare, Rwanda cabinet minister and CEO of the country’s mines, petroleum & gas board.
But it is also aiming to expand into renewables, as well as harvesting methane from a unique geological formation at Lake Kivu. “We are using some new energy sources, particularly methane gas in Lake Kivu in the western part of our country that we are harnessing,” says Gatare. This production can be used for electricity generation—a priority for the government—as well as directly by households and, potentially, in the transport sector.