Out-Law / Your Daily Need-To-Know

Weston Capital launches Ghana oil and gas fund

Out-Law News | 29 Aug 2014 | 3:32 pm | 1 min. read

A new fund has been launched aimed at increasing local participation in Ghana’s developing oil and gas industry and to help boost the financial capacity of domestic companies operating in the sector.

The Weston Oil and Gas Fund, a public-incorporated Ghanaian firm, is the first mutual fund of Weston Capital.

Weston Capital chief executive officer Rex Kontor said the fund is initially offering 500,000 shares, with Weston Capital as its manager and Nigerian-based Zenith bank as its custodian.

According to the Ghanaian government’s Information Services Department (ISD), Kontor said the fund is open to the general public and institutional investors with a minimum subscription of 200 shares. Kontor said individuals can make an initial investment in the fund, “and consequently in the oil and gas sector”, of a minimum of 50 cedis (GHS) ($13).

The fund also aims to encourage bulk distribution companies, oil marketing companies and other businesses to issue corporate bonds.

The director-general of Ghana’s Security and Exchange Commission Adu Anane Antwi welcomed the new fund. He told ISD that 35 investing schemes had been licensed to date and were currently operating in Ghana.

Figures released by oil and gas exploration and production company Kosmos Energy earlier this month, showed that gross production from Ghana’s Jubilee field, which started up in 2010, averaged approximately 104,000 barrels of oil per day (bopd) in the second quarter of 2014, an increase from 102,000 bopd in the first quarter of the year.

Kosmos said the Jubilee field partners and Ghana’s government “are working together with various stakeholders to advance the export infrastructure needed to alleviate gas-related constraints currently limiting the field’s oil production”.

In December 2010, the World Bank approved a credit of $38 million to Ghana’s government to implement an oil and gas capacity building project. The support, a concessional loan with a repayment period of 35 years, including a 10 year grace period, constituted two-thirds of the total project cost. Other co-financiers are the governments of Ghana and Norway. The project is due to come to an end in 2015.

In June 2014, the World Bank approved additional financing to support the development of Ghana’s oil and gas reserves, taking total support to date to nearly $58 million. The bank said the extra finance would help to establish a national data centre within the Petroleum Commission of Ghana, an independent regulator for the oil and gas sector, and help procure laboratory equipment for Ghana’s Environmental Protection Agency.