Ghana's oil and gas industry has received a boost following the World Bank’s approval of $700 million for exploration of oil and gas offshore Cape Three Points in the Western Region.
Italy's largest oil company, ENI Spa, and its partners are expected to utilise the amount for drilling and other works.
The Minister of Energy and Petroleum, Mr Emmanuel Armah-Kofi Buah, told the Daily Graphic in an interview in Accra at the weekend that “the government is excited because the development of Ghana’s oil and gas fields would go a long way to further boost the economy”.
Ghana took another major step towards the realisation of energy and power security with the signing of an agreement for the development of the Offshore Cape Three Points (OCTP) integrated oil and gas project in January 2015 at the Peduase Lodge.
The $7 billion project, being undertaken by ENI Spa in collaboration with Vitol Energy, would see the development of the Sankofa and Gye Nyame fields to provide substantial gas to operate the thermal power plants for 20 years.
Correspondence from the World Bank to the beneficiaries of the facility indicated that the approval was given following a senior management discussion on the OCTP project late last month.
ENI Spa, Vitol, the Ghana National Petroleum Corporation (GNPC) and the government of Ghana are expected to study the terms and conditions of the proposed World Bank guarantees to pave way for final discussions on the guarantee package.
The Board is expected to consider the approval on July 30, 2015.
Oil production from the OCTP is estimated at 80,000 barrels per day and will start in 2017, while gas comes on stream in 2018.
The project will deliver 170 million cubic feet of gas per day and it is expected to generate an additional 1,100 megawatts of power for Ghana.
Gas will be processed and transported via a dedicated pipeline to onshore gas-receiving facilities located near Sanzule, a village on the coast in the Western Region.
The gas will also be compressed and injected into the Western Corridor Gas Pipeline for transportation to industrial customers in Ghana.
Crude oil will also be stored in the FPSO and offloaded to tankers for sale on the international market.
GNPC is representing Ghana on the project.
President John Dramani Mahama described the signing of the agreement in January 2015 as "a landmark event in the development of oil and gas in Ghana," as it would lead to energy and power security for the nation.
The agreement was signed among the oil companies, the GNPC and the Ministry of Petroleum.
He said a survey on Ghana had revealed that energy was the most binding constraint on the economy.
The Chief Executive of the GNPC, Mr Alex Mould, and the Minister of Petroleum, Mr Buah, signed for Ghana, while the Executive Vice-President of ENI Spa in charge of Sub-Saharan Africa, Mr Ciro Antonio Pagano, and the President and CEO of Vitol, Mr Tan Taylor, signed for ENI and Vitol respectively.
Mr Pagano said the fact that the project was coming on board at a difficult time for the oil and gas industry, due to the falling prices, was a testimony of the trust the company had in the Ghanaian economy.
Mr Taylor said the company was proud to be part of such an important venture.
"Vitol has been supplying energy to Ghana for over 25 years and we are delighted to be able to contribute to the development of Ghana’s economy through a major domestic energy solution," he said.