{"id":611159,"date":"2019-04-29T10:12:43","date_gmt":"2019-04-29T10:12:43","guid":{"rendered":"<br><div>\n<figure class=\"fff post-thumbnail\" itemprop=\"associatedMedia\" itemscope=\"\" itemtype=\"http:\/\/schema.org\/ImageObject\"><img class=\"post_layout_5_img\" src=\"https:\/\/cdn.ghana-mma.com\/2019\/04\/Franklin-cudjoe.jpg\" alt=\"IMANI writes: Our $30bn valuation"},"modified":"2019-04-29T10:12:43","modified_gmt":"2019-04-29T10:12:43","slug":"our-30bn-valuation-of-oil-field-sensible-energy-minister-wrong","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2019\/04\/29\/our-30bn-valuation-of-oil-field-sensible-energy-minister-wrong\/","title":{"rendered":"Our $30bn valuation of oil field &#8216;sensible&#8217;, Energy Minister wrong"},"content":{"rendered":"<p><\/p>\n<div>\n<figure class=\"fff post-thumbnail\" itemprop=\"associatedMedia\" itemscope=\"\" itemtype=\"http:\/\/schema.org\/ImageObject\"><img decoding=\"async\" class=\"post_layout_5_img\" src=\"https:\/\/cdn.ghanamma.com\/2019\/04\/Franklin-cudjoe.jpg\" alt=\"IMANI writes: Our $30bn valuation of oil field \u2018sensible\u2019, Energy Minister wrong\"\/><span class=\"featured-image-caption\"><br \/>\nFranklin Cudjoe, Founding President &#8211; IMANI Africa <\/span><br \/>\n<\/figure>\n<div class=\"mom-ads-wrap  \">\n<div class=\"mom-ads ads-layout-rotator ads-rotator-id-129\" style=\"width:728px; height:90px;\">\n<div class=\"mom-ads-inner\">\n<div class=\"mom-ad\" data-id=\"1236\" style=\"width:728px; height:90px; \">\n<img loading=\"lazy\" decoding=\"async\" class=\"appear\" src=\"https:\/\/cdn.ghanamma.com\/2019\/04\/Say-yes-to-ads-Banner-728-X-90.jpg\" alt=\"Right Below Featured Image\" width=\"728\" height=\"90\"\/>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p>Policy think tank IMANI Africa has challenged the government\u2019s position that it erred in its valuation of the oil field operated by Aker Energy.<\/p>\n<p>The think thank has come under attack over its $30bn valuation of the oil field which it said Ghana risked losing.<\/p>\n<p>According to the government through the Minister of Energy, John Peter Amewu, IMANI\u2019s analysis and arrival at the value demonstrated a lack of understanding of petroleum economics but IMANI has challenged that.<\/p>\n<p><strong>Read IMANI\u2019s reaction below:<\/strong><\/p>\n<p>IMANI\u2019s $30bn Valuation of Controversial Oil Field is Sensible. Minister of Energy\u2019s Calculation Wrong.<\/p>\n<div dir=\"auto\">\n<p><strong>a.\u00a0 \u00a0 \u00a0Minister\u2019s statement:<\/strong> Questioned the valuation of the field at\u00a0<span class=\"m_-4586862927330541494money\">$30<\/span>\u00a0billion @\u00a0<span class=\"m_-4586862927330541494money\">$65<\/span>\u00a0per barrel by 450 million barrels; \u201cexposes the weaknesses in IMANI\u2019s analyses as well as its poor understanding of petroleum economics.\u201d Why? The 450 million boe are gross contingent resources (cannot be fully recovered) and besides, in Ghana, our average crude oil recovery rate is 25%. At this rate, the field value will be estimated at\u00a0<span class=\"m_-4586862927330541494money\">$7.3<\/span>\u00a0billion assuming a price of\u00a0<span class=\"m_-4586862927330541494money\">$65<\/span>\u00a0per barrel.<\/p>\n<\/div>\n<p>That\u2019s not factually accurate!<\/p>\n<p>b.\u00a0 <strong>\u00a0 \u00a0IMANI\u2019s statement:<\/strong> based on Aker\u2019s recoverable reserve estimates as provided on their website. Consistent \u201cthe biggest oil find in Africa, of 450-550 million barrels, with potential recoverable reserves of nearly one billion barrels.\u201d At today\u2019s Oil price of $65per barrel, that field is worth at least\u00a0<span class=\"m_-4586862927330541494money\">$30<\/span>\u00a0billion (bn).<\/p>\n<p><strong>c.\u00a0 \u00a0 \u00a0 Aker\u2019s statement:<\/strong> earlier statement on both 4 March and 10 January 2019\u00a0 as part of ongoing four well appraisal campaign states that \u201cthe existing discoveries are estimated to contain gross contingent resources (2C) of 450 \u2013 550 million barrels of oil equivalent (mmboe) with upside of between 600 \u2013 1,000 mmboe\u201d.<\/p>\n<p>i.\u00a0 \u00a0 However, new press release on 26 April 2019 announcing the completion of the drilling campaign states that \u201cReserves, to be developed in the first phase, are estimated at 334 million barrels of oil.Discovered contingent resources, to be developed in subsequent phases, are estimated at 110-210 mmboe, resulting in a combined volume base of approximately 450\u2013550 mmboe. These estimates exclude any additional volumes from Pecan South and Pecan South East, currently being assessed.\u201d See latest press release of April 26 @\u00a0https:\/\/www.akerenergy.com\/<wbr\/>news\/archive\/2019\/aker-energy-<wbr\/>completes-appraisal-drilling-<wbr\/>campaign-offshore-ghana-<wbr\/>continues-work-on-pdo<\/p>\n<p>Essentially the 30bn valuation is right going by Aker\u2019s much clearer statement of 334 million barrels of reserves on April 26.<\/p>\n<p>Once again,.<\/p>\n<p>1. The Minister is confusing prospective resources with contingent resources.<\/p>\n<p>2. Contingent resources are already deemed to be recoverable by the working interest owner.<\/p>\n<p>3. We are concerned with the evaluation of the whole resource not the resource value from the point of view of Aker so we DON\u2019T NEED to factor in the working interest of any party. Again, the minister is completely at sea. The total contingent resources give rise to the valuation.<\/p>\n<p>4. Because in Ghana we assume that once a company has committed to the Pl\u00e0n Of Development they will make every investment to continue developing the field even if the price of oil falls to zero and a hurricane destroys their FPSO we don\u2019t typically put much store on \u201cprobability of development\u201d. Hence all the valuation estimates are always \u201cunrisked\u201d.<\/p>\n<p>5. Assuming, as per standard practice in Ghana, that the gross contingent resources are unrisked leaves the volumetric model for valuing the resource intact at gross contingent resources which is simply the indicated volume multiplied by a reasonable oil price value. In a ballpark valuation analysis, spot price is fine.<\/p>\n<p>6. IMANI\u2019s position is sensible.<\/p>\n<p><span class=\"ctx-article-root\"\/>  <\/p>\n<\/div>\n<p>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a style=\"display:none\" rel=\"follow\" href=\"http:\/\/megatheme.ir\/\" title=\"\u0642\u0627\u0644\u0628 \u0648\u0631\u062f\u067e\u0631\u0633\">\u0642\u0627\u0644\u0628 \u0648\u0631\u062f\u067e\u0631\u0633<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Franklin Cudjoe, Founding President &#8211; IMANI Africa Policy think tank IMANI Africa has challenged the government\u2019s position that it erred in its valuation of the oil field operated by Aker Energy. The think thank has come under attack over its $30bn valuation of the oil field which it said Ghana risked losing. According to the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":611160,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-611159","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Our $30bn valuation of oil field &#039;sensible&#039;, Energy Minister wrong - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2019\/04\/29\/our-30bn-valuation-of-oil-field-sensible-energy-minister-wrong\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Our $30bn valuation of oil field &#039;sensible&#039;, Energy Minister wrong - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"Franklin Cudjoe, Founding President &#8211; IMANI Africa Policy think tank IMANI Africa has challenged the government\u2019s position that it erred in its valuation of the oil field operated by Aker Energy. 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