Out-Law News | 22 Jul 2014 | 10:28 am | 1 min. read
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.
World Bank country director for Ghana Yusupha Crookes said: “The discovery of deep oil and gas reserves has resulted in a rapid expansion of the oil and gas industry in Ghana, which has the potential to bring significant economic development opportunities to the country.”
Crookes said: “The strong and transparent regulatory system and technical training of the local workforce supported by the project should help ensure that Ghana derives the maximum possible social and economic benefits from this important endowment.”
The extra financing amounts to nearly $20m. The bank said this will “ensure the completion of key project activities” in the country’s Jubilee field, while extending the project’s closing date by 24 months to 30 June 2017 to allow for completion of activities”.
World Bank project task team leader David Santley said the focus is on “building strong regulatory institutions” to indirectly benefit all Ghanaians by “increasing the government’s capacity to manage resources effectively and transparently”.
The project also includes education and research in petroleum engineering and petrochemical engineering for future professionals in the oil and gas sector who are studying at selected universities. The bank said more than 800 students will be involved at the tertiary level.
The Jubilee field started up in December 2010, as the bank approved a credit of $38m to Ghana’s government for the project. The credit, 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.
According to an update on the project from the bank in 2012 (146-page / 2.12 MB PDF), at peak production Jubilee could generate more than $1 billion in annual revenues for the country, “a figure that will constitute 3% of 2011 non-oil gross domestic product and 18% of total government revenue”. The report said announcements of significant additional discoveries “suggest that long-term oil revenues could be derived from multiple sources”.
Draft legislation aimed at improving transparency and governance in the exploration and production of oil in Ghana was approved by the country’s cabinet last May. The new Petroleum Exploration and Production Bill is set to supersede legislation in place for 30 years.