Energy

Lukoil’s offshore projects in Ghana delayed until April 2023

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Reports have indicated that Ghana delays submission of revised plan for offshore project involving Lukoil until April 2023.

The Russian oil giant Lukoil has been placed under United States sanctions due to Russia’s invasion in neighbouring Republic of Ukraine.

According to the reports monitored by Investment Times, Norway’s Aker Energy has completed a comprehensive front end engineering and design study for the Pecan field development and prepared a revised Plan of Development (POD) for the Deepwater Tano/Cape Three Point (DWT/CTP) block offshore Ghana.

POD submission has been delayed due to the uncertainties and risks caused by the situation with Ukraine and Lukoil Overseas Ghana Tano Ltd.’s 38% interest in the license, as well as supply chain disruptions and inflation, Aker said in a report.

Project participants had intended to submit the revised PDO to Ghana’s government by the end of 2021. Thus, was then delayed until the end of Q2 2022. “The current POD deadline has been extended to April 2023. The company is considering strategic alternatives in response to the challenges, which is expected to be clarified by the new POD deadline,” Aker said.

Russia’s Lukoil is listed as one of the entities subject to U.S. energy sector sanctions pursuant to Directive 4 under Executive Order 13662. “However, these restrictions will not apply to the DWT/CTP project due to the project being initiated before 29 January 2018. Aker Energy will comply with all Norwegian and international sanctions applicable for Aker Energy and the DWT/CTP block in Ghana,” Aker said.

Lukoil joined the DWT/CTP project in March 2014. The Tano block covers an area of just over 2,000 square km and is located in the western part of Ghana’s waters in the Gulf of Guinea, 80 km off the coast of Cameroon. The sea depth within the block varies from 1,600 to 3,000 meters. Seven deposits, five oil and two gas, have been discovered there. 

The Pecan field is one of the deepest deposits in the world at 2,600 meters. The Pecan field’s total reserves are estimated at 334 million barrels of oil, with a production plateau of 110,000 barrels of oil per day. Production is expected to last more than 25 years. A total investment of $4.4 billion was planned, excluding the charter rate for a leased floating production storage and offloading or FPSO vessel. Aker hoped to launch production in 2022.

Aker Energy owns 50% of the project, Lukoil Overseas Ghana Tano Limited owns 38%; Ghana National Petroleum Corporation (GNPC) has 10% and Fueltrade Limited has 2%.

Aker Energy said in March 2022 that a final investment decision for the field’s development had been delayed due to falling oil prices. It also altered the concept for developing the Pecan field and now proposed to use not one but two FPSO told Interfax lower costs. Aker had an option as of the beginning of 2022 to acquire the Dhirubhai-1 FPSO for $35 million.

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