Norwegian billionaire pays $100 million for 50 percent stake in Hess Ghana oilfield

Oil firm owned by Norwegian billionaire Kjell Inge Roekke, Aker Energy ASA on Monday announced that it has agreed to buy 50 percent of Hess Corporation Ghana unit in a $100 million deal and plans to start production there in 2012.

This was done through a 50-50 joint venture between Aker ASA and TRG.

“Aker is pleased to have been invited into this joint venture by TRG and looks forward to exploring the opportunity of building a significant E&P activity in Ghana inspired by what Aker has achieved on the Norwegian Continental Shelf (NCS). The Aker Group is uniquely positioned to combine technological know-how from the upstream oil and gas industry with its extensive experience in the oil services to deliver a successful fast-track project. We are looking forward to partnering with the Ghana National Petroleum Corporation (GNPC) and have high expectations for what we can achieve together,” said Øyvind Eriksen, President & CEO of Aker.

The $100 million for this deal consists of  $25 million payable upon closing of the transaction and a further $75 million payable upon approval of the Plan for Development and Operation (PDO) on the the Deepwater Tano Cape Three Points block (DWT/CTP) block. However the acquisition is subject to approval from relevant Ghanaian authorities and other customary closing conditions. TRG  is a holding company also owned by Kjell Inge Røkke, the principal shareholder of Aker. TRG has been involved in Ghana since 2014.

The DWT/CTP holds an estimated 550 million barrels of oil equivalents in contingent resources and has the potential of producing an additional 400 million barrel. The PDO will be submitted in 2018 with anticipated first oil in 2021.

“GNPC is excited that Aker is entering into Ghana’s upstream sector as an operator. The Aker group is globally recognized as an oil services provider and an upstream operator. We look forward to working closely with a member of the group, Aker Energy. We believe that our collaboration will lead to further successes in the ultra Dep Water Tano basin of Ghana, and enable the transfer of knowledge to the Ghanaian oil and gas industry,” said Dr Kofi Koduah Sarpong, CEO of GNPC.

The field development concept will be based on a floating production, storage and offloading (FPSO) with a subsea production system. The development concept will build on experience gained from the NCS with multilateral wells with improved completion solutions providing improved reservoir contact and recovery factor. Proven artificial lift solutions will further enhance recovery rates while infield pipeline solutions will ensure flow properties. The subsea production system will be designed to facilitate rapid tie-backs to the centrally located FPSO in the second phase.

There seems to be a growing interest in Ghana’s deep water oil exploration. Last month Exxon Mobil Corp signed a deal with Ghana in order to explore oil in the Deepwater Cape Three Point offshore (DWCTP) oilfield. Apart from Exxon Mobil and Aker, other firms drilling in the West African country include Kosmos Energy and UK’s Tullow oil.

This will be the second deal to be signed after the International Tribunal for the Law of the Sea last September drew an ocean boundary favoring Ghana in a dispute with its neighbor Ivory Coast.