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Created on: 2022-02-08 12:31:59
Last update: 2022-02-08 00:00:00
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Sector | Oil and Gas Extraction |
Location |
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Status |
Planning
Design
Agreement
Construction
Operation
Closure
Decommission
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Website | https://www.eni.com/en-IT/operations/ghana-octp.html |
About Offshore Cape Three Points (OCTP)
The Offshore Cape Three Points (OCTP) is an integrated oil and gas project located in the Tano Basin, about 60 kilometres off the coast of Ghana. The project started in 2015 and involves the development of three gas fields: Sankofa Main, Sankofa East and Gye Nyame and two oil fields: Sankofa East Cenomanian and Sankofa East Campanian. The extraction of oil and gas will take place at depths ranging from 600 to 1,000 metres and the fields cover an area of 694 square kilometres.
The offshore fields are estimated to hold approximately 1.5 trillion cubic feet of gas and approximately 500 million barrels of oil. These reserves are expected to meet the demands of Ghana's thermal power plants for the next 20 years. The existing offshore infrastructure comprises a 63 kilometre pipeline to the coast, undersea wells, gas processing units and a floating storage and offloading (FPSO) unit.
Eni holds 44% of the project, which represents a majority stake, followed by Vitol with 36% and National Petroleum Corporation Ghana (NPCG) with 20%. In 2019, a gas discovery was made in the Cape Three Points Block 4 (CTP-4), which led to expansion plans for the project. The exploratory well has been drilled 12 km northwest of the production vessel from the existing Sankofa and Gye fields. Eni also announced the presence of a large oil deposit on the Eban-1x exploration prospect, located 50 kilometres from the coast and about 8 kilometres northwest of the Sankofa field. Production is estimated at 5,000 barrels of oil per day, similar to wells already producing at the Sankofa oilfield. The Eban-1x well is the second well drilled in Block 4 after the Akoma discovery and preliminary studies place the potential of the Eban-Akoma complex between 500 and 700 million barrels of oil.
Why this profile?
The Offshore Cape Three Points project has already impacted the livelihoods of a large number of people in Ghana, including fishermen and Indigenous people. The impacts include displacement of communities, the decrease of food and livelihood resources available for local fishermen, air pollution and the degradation of seawater. These impacts are expected to worsen if the expansion plans for the project proceed.
What must happen
In order to prevent impacts from worsening, banks and other financial institutions must refrain from financing the planned expansion of the project.
Impacts
Social and human rights impacts
Displacement and loss of livelihoods: The project requires the acquisition of approximately 257 acres of land used by communities for growing and harvesting crops. In July 2015, ENI estimated in their Final Environmental Impact Statement that around 213 acres of farmland could become inaccessible to 180 farmers of the Sanzule community.. Fishermen in the region have reported a severe decline in catch predominantly due to the artificial lighting system of vessels which attract fish to the oil and gas fields. They report that several fish species have become extinct in the region. The fishermen are also restricted by a no-fishing zone 500m around the premises of the project and their boats are seized by police if they enter this zone.
Complaints have also been made about several fish species going extinct. Most of the time, the nets used by fishermen are full of seaweed and no fish. This is a direct consequence of drilling in the region, which cuts seaweed. All these factors have led to considerable losses for fishermen, which in turn has consequences for their economic stability.
Increased cost of living: With the construction of new power plants in the region, more people have migrated to the area looking for employment. This has led to a substantial increase in market prices and rent costs, thereby making life even harder for the communities that have lost their livelihoods.
Environmental and climate impacts
Air pollution: Construction activities lead to emissions in the form of nitrous oxide, carbon dioxide, sulphur dioxide and particulate matter. These emissions are particularly attributed to earth moving, excavation and transportation activities. Air pollution will also be a result of the operation of the FPSO, since it uses turbines and fuel for power generation.
Impacts on marine ecology: This project is predominantly set on the seabed. The pipelines, drilling activities and the operation of vessels have the potential to cause seawater turbidity and will also lead to seeping of contaminants such as zinc and arsenic into the seawater. This impacts marine life and in turn also impacts the livelihoods of fishermen.
Climate change: The OCTP contributes to an increase in greenhouse gas emissions.The emissions from the OCTP project originate from operations for well completions (power generation exhaust emissions); FPSO operations (power generation exhaust emissions and non-routine flaring); marine support vessels and helicopters (power generation exhaust emissions); and filling, offloading and operation of export tankers (exhaust and fugitive emissions).
Climate change is manifested in Ghana through: rising temperatures, declining rainfall totals and increased variability, rising sea levels and high incidence of weather extremes and disasters, such as floods. More than 30 years of climate records show that the prevailing climatic conditions in Ghana have severely deteriorated and are likely to worsen in the future. Climate forecast and climate change scenarios for the country predict a more severe and frequent pattern of droughts and flood events. Ghana is particularly vulnerable due to its reliance on sectors that are sensitive to these impacts, such as agriculture, forestry and energy production.
Other impacts
Decreasing value of Ghana’s energy sector: Most of Ghana's LNG and energy projects have been contracted without accurate estimates for future demand. Ghana's oil and gas sector is not stable as many factors threaten the future of the industry. Some major issues come from low non-power demand, the procurement of LNG without a long-term plan and also large financial exposure to Take-or-Pay contracts. As a consequence, there is an excess of supply that is underpriced and therefore leads to a rapid rise in debts. The excess in the supply of gas leads to a considerable drop in the price of gas. Aditionally, due to the take-or-pay contracts, Ghana National Petroleum Corporation (GNPC) has to pay the private sector for supplies they cannot sell. This amounted to over USD 168 million in 2019.
Governance
Bank policies
Applicable norms and standards
Financiers
The project has a total cost of USD 7.3 billion. Financial close for the project was achieved in March 2017. Finance was provided by UK Export Finance, the International Finance Corporation (IFC), and commercial banks. The commercial debt financing was provided by Standard Chartered, HSBC, ING, Société Générale, Mizuho, MUFG, Natixis and Bank of China. Standard Chartered is financial advisor to the project.
There have been no confirmations on finance for the expansion of the project yet.
Related companies
Eni holds a majority stake in the project at 44%, followed by Vitol with 36% and National Petroleum Corporation Ghana with 20%.
In 2019, a gas discovery was made in block Cape Three Points Block 4 (CTP-4), which led to expansion plans for the project. CTP-4 is owned by a joint venture formed by ENI Ghana (42.5%), Vitol Upstream Ghana (34%), National Petroleum Corporation Ghana (10%), Woodfields Upstream (9.5%) and Explorco, a subsidiary of the National Petroleum Corporation Ghana (4%).
News
Documents
Brief history
The development plans for the Offshore Cape Three Points project were approved and construction began in 2015. Oil production at the facility began in 2017 and gas production began in 2018. In 2019, a discovery was made in Cape Three Points Block 4, which has now laid the foundation for an expansion of the project. The new exploratory well has been named Akoma-1X, and is expected to have a considerable gas reserve and other condensate resources. ENI, Vitol Upstream Ghana and National Petroleum Corporation Ghana have been joined by Explorco, and Woodfields Upstream in this new venture.