Business News of Tuesday, 10 March 2015
State-owned Ghana National Petroleum Corporation (GNPC) is close to signing a $700 million, five-year loan from private commercial lenders led by commodity trader Trafigura to help fund its expansion, its chief executive said on Tuesday.
Alex Mould told Reuters in an interview that GNPC had already concluded due diligence for the deal, the company’s biggest loan since the West African nation started oil production in late 2010.
GNPC, which holds a 13.64 percent stake in Ghana’s Jubilee offshore oil field operated by Tullow, started negotiations last year with Trafigura and some banks for the loan, which will have an interest rate of below five percent.
“We got responses from 18 of the leading global lenders – both banks and commodity traders and we are working with the prospective lenders to close the deal soon,” he said in Accra.
Through an accelerate growth strategy, GNPC aims to become a stand-alone operator in oil and gas exploration and production by 2019 and a “world class operator” by 2026, Mould said.
“The strategy hinges on replacing and growing reserves, local content development, efficient capitalisation and boosting institutional capacity,” he added.
In addition to Jubilee, GNPC has significant stakes in Tweneboa Enyenra and Ntomme (TEN), with reserved estimates at more than 300 million barrels of oil equivalent (boe), and the gas-dominated Sankofa Gye Nyame (SGN) project, believed to hold at least 420 million boe.
TEN is on schedule to start production next year while SGN is expected to begin oil production in 2017, to be followed by gas in 2018. Mould said the reserves were likely to increase as there were new discoveries undergoing appraisal.
He said the recent slump in oil prices did not affect GNPC’s ongoing projects.
“Our investment profiles are long term …Thus, we and our partners are committed to investment decisions already made regarding our upstream operations,” he said.
However, GNPC is taking measures to increase efficiency. “We will cut costs and realign activities even as we remain steadfast with our strategy,” he added.
GNPC expects to lift more than seven million barrels of oil this year as the country’s share of Jubilee production, similar to the 7.68 million barrels last year.
Jubilee, which also has Kosmos Energy, Anadarko and PetroSA as shareholders, has produced around 128 million barrels of oil by December since it came on stream in late 2010.