GhanaOil & Gas/Mining

PIAC urges GNPC to decommission Saltpond oilfield

Public interest group says this will remove the huge cost of operating a skeletal staff to maintain the rig, which has become a drain on the country

Ghana News Agency (Cape Coast) – The Public Interest and Accountability Committee (PIAC) has called on the Ghana National Petroleum Corporation (GNPC) to decommission the Saltpond oilfield in the Mfantseman Municipality of the Central Region.

Noble Wadzah, chairman of PIAC, said: “The continued use of oil revenues to cater for an idle field did not reflect judicious use of the resources.

He made the appeal at a forum on the management and use of Ghana’s petroleum revenues in Cape Coast.

The forum brought together key stakeholders, including representatives of the Central Regional Co-ordinating Council, PIAC member institutions, traditional and religious leaders, media and the public.

Wadzah said the Saltpond oilfield, which was the nation’s oldest oil-producing field, no longer produces oil, hence it must be decommissioned to reduce unwarranted expenditure.

Decommissioning a rig comes with careful planning and so GNPC, with the consent of the Ministry of Energy, he said, had embarked on a two-phase programme to dismantle the premier oil-producing field in Ghana.

Drain on resources

The first phase of bringing down the rig will involve preparation of a comprehensive decommissioning plan. The second phase will actually kick-start the decommissioning operation.

Operations at the Saltpond oilfield came to a halt in June 2010 when GNPC started incurring operational costs from a field that was producing next to nothing from two of its archive wells, out of the six originally sunk when the field was operating in the 1970s.

Noble Wadzah said it was not financially viable for GNPC to continue to use oil revenue to cater for the cost of maintaining the offshore production platform in the run-up to its decommissioning.

He said the payment of emoluments for a skeletal staff and maintenance of the non-functional production facility were draining the country’s oil revenues.

Nasir Alfa Mohammed, a member of PIAC, regretted that despite the committee’s statutory mandate and commitment to ensure efficient, transparent and accountable management of petroleum revenues and investment, it lacks the legal wherewithal to prosecute people who misappropriate funds from Ghana’s oil revenue allocations.

Against this backdrop, he reiterated the need for PIAC to have prosecutorial powers to monitor and rein in the misappropriation of oil revenues.

Nasir Alfa Mohammed said Parliament must empower the committee and render its unqualified support to forestall any further misappropriation of oil revenue which could spark rapid national development. This, he said, would promote accountability from people who were not performing their role.

He offered his assurance that the committee would continue to execute its mandate with high integrity and remain independent of government dictatorship in managing oil revenues.

PIAC is determined to engage the media and other leading stakeholders to keep track of oil revenue disbursement as a means of promoting social auditing and accountability, Mohammed said.

He urged the media and other strategic stakeholders to play their role more effectively to ensure that oil revenues were protected better.

Osabarima Kwasi Atta II, Omanhen of the Oguaa Traditional Area, called for further engagements by PIAC to educate the public on their mandate and work towards galvanising the support of all for its prosecutorial powers.

Saltpond oilfield

Saltpond oilfield, which is being put into disuse, was discovered in 1970 and was operated by the Signal-Amoco consortium. Signal-Amoco relinquished the concession field in 1976 to offshore Hydrocarbon Ltd, citing the field as non-commercial.

Offshore Hydrocarbon later entered into a development farmout with Agri-Petco of the USA, which drilled six appraisals wells between 1977 and 1978 from a centrally located jack-up rig called Mr Louie.

After the drilling, the jack-up was converted into a production unit and the field came on-stream in October 1978.

In 1984 the field was reassigned to Primary Fuel Incorporated, which, after operating for a year, handed it over to Ghana National Petroleum Corporation in July 1985.

Between 1978 and 1985 the maximum production level was 4,800 barrels a day. This dwindled to 580 barrels a day. Operations finally stalled when crude prices on the world market were at an all-time low.

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