CWC

AFC Bets Big on Ghana’s Fourth Deepwater Development

By Susu Nooman

Aker Energy has convinced Africa Finance Corporation to invest in its projects, as the company edges close to Final Investment Decision FID on a >100,000Barrels of Oil Per Day field development offshore Ghana.

 The Norwegian E&P operator has issued subordinated convertible bonds to the   multilateral finance development institution, of $100Million. “The bonds have a coupon of 5.5% per year and will be converted to equity in the event of an Initial Public Offering (“IPO”) of Aker Energy, at an agreed discount to an IPO offering price of 1.85% per year”, Aker Energy says in a statement. The bonds have a maturity of five years, with an option to extend with another three years. The proceeds from the bonds will be part of the financing for the development of the Deepwater Tano

“We look forward to further strengthening our collaboration in the years to come”, saysJan Arve Haugan, CEO of Aker Energy, “as we embark on development projects in Cape Three Points (“DWT/CTP”) block offshore Ghana”.

The oil field currently in development in the DWT/CTP block is the Pecan field, discovered by Hess Corp. in December 2012.

Aker Energy purchased Hess Corp.’s 50% in the DWT/CTP block in February 2018 and has moved rapidly to develop it, even though the resources are located far beneath 2,000metres of water,

Aker has indicated that the field could produce as much as 110,000Barrels of oil per day. What it hasn’t said, in public, is how long the peak production could last.  First oil can flow by 2022 if the project is sanctioned this year. Aker submitted a Plan for Development and Operations (PDO), for the Pecan field and its satellites on March 28, 2019, while the appraisal drilling campaign was still ongoing. The company is working on a revised PDO, following scheduled feedback from Ghanaian authorities.

As FIDs on field projects in Ghana usually come much less than a year after the submission of PDO to the authorities, it is expected that the financial sanction for the field will happen before the end of 2019. If it does, the Pecan field development will be the country’s fourth deepwater field development after Jubilee (first oil 2010), TEN (first oil 2016) and Sankofa Gye Nyamme, located in the OCTP block (first oil 2017).

As part of the agreement between AFC and Aker Energy, AFC has received equity warrants with the right to subscribe shares in Aker Energy in future equity offerings by the company of up to $50-100 Million. AFC also intends to take part in other capital market activities initiated by Aker Energy in the future.

“Partnerships with financially and technically strong sponsors, is a key component of our Natural Resources strategic focus. We are therefore delighted to be announcing this transaction with Aker Energy, which, through the Aker group, has an outstanding track record of executing complex offshore projects like the DWT/CTP block in Ghana,” Samaila Zubairu, President and CEO of AFC commented.

 



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