Ghana's government plans to allow its state oil company to take over all of the country's oil and gas assets, according to the 2015 fiscal policy presented to parliament here on Wednesday by Finance Minister Seth Terkper.
In the first move, it will allow the Ghana National Petroleum Corporation (GNPC) to take over the Ghana National Gas Company (GNGC) to create a gas subsidiary, according to the fiscal budget.
The takeover means a more integrated management of the country's oil and gas resources.
"The consolidation of GNPC and GNGC will make it possible to enhance a more integrated management and continue financing of projects in the oil and gas enclave immediately," the budget said.
The government would appoint a transaction advisor to advise a further consolidation involving the Tema Oil Refinery (TOR) and the Bulk Oil Storage and Transportation (BOST).
The Ghanaian parliament earlier approved a new debt management strategy to develop the country's energy sector through continuously tapping oil and gas resources to leverage the capital markets.
Recent negotiations in the country involving gas pricing and the GNPC's aggregator arrangements clearly suggested the need for strong balance sheets for the country's energy sector institutions.
"It is in this context that we must see the relevance of (a) the proposed energy levy in the new pricing structure; and (b) the GNPC's recent successful access to the capital markets to raise 700 million U.S. dollars to support infrastructure development," Terkper said.
The GNPC has come under attack for announcing its decision to seek a 700 million-dollar facility from the international financial market next year to enhance its operations.
But Terkper told parliament the amount would be used to support the increasing oil and gas infrastructure investment and cash requirements from its participating and commercial interests.
He emphasized that this was a GNPC loan rather than a central government one with a highly competitive cost of borrowing of around five percent.
"The facility, together with the GNPC's other resources, will be used to support such investment needs as the pipeline and receiving facility in the Offshore Cape Three Points Project (OCTP), which the GNPC will finance with 493 million dollars out of the loan proceeds, to provide a significant boost to monetizing Ghana's natural gas. It will result in a lower gas price," Terkper said.
He said, similarly, some 36 million dollars to 45 million dollars invested by the GNPC to link the Tweneboa natural gas to the Jubilee FPSO would allow for cheaper processing of gas by the Atuabo Plant.
The GNPC also plans to invest between 200 million dollars and 300 million dollars as part of measures to provide adequate financial security for the OCTP gas project.
"In short, the facility is expected to be as much a game changer as the investment of about 1 billion dollars in our first gas infrastructure. These are all critical to our long-term national energy security," Terkper emphasized.
The government announced a 6 billion-dollar oil and gas deal with Italian oil giants, ENI and Swiss based Vitol, to develop and produce oil and gas from the OCTP oil and gas field.
Meanwhile, the China Development Bank funded 800 million-dollar gas infrastructure at Atuabo, 328.7 km west of the capital, starting to pump 30 million standard cubic feet of gas per day gas to the Volta River Authority on Monday to produce 100 megawatts of thermal power for the West African country.