ExxonMobil left Ghana due to restructuring exercise- Amin Adam
The Deputy Minister Designate for Energy, Mr Mohammed Amin Adam has cleared the mystery surrounding the exit of U.S oil giants, ExxonMobil from Ghana.
According to the nominee, who is being vetted the second time to occupy the same position, Ghana is not the only country that has suffered the exit of the oil giants. South Africa, Chad and Cameroon have also suffered similar faiths.
He explained that the company’s exit from Ghana and the three other countries in African is as a result of restructuring that it is undertaking, in line with its strategy to restore value to its producing fields and also to focus on advantage projects.
He said Exxon has relinquished its bloc in Ghana, relinquished three blocs in South Africa and is selling 40% of its assets in Chad and Cameroon to Savannah Energy, a leading African focused British independent energy company, currently operating in Nigeria and Niger.
“In the letter that they sent to the Minister, they didn’t indicate why they were leaving, but if you have been watching current trends you would have noticed that ExxonMobil is going through restructuring, in line with their strategy to restore value to their producing fields and also to focus on advantage projects.
“So Ghana and other countries have been affected by their strategy and they have relinquished their bloc in Ghana, they have also relinquished three blocs in South Africa, they are selling 40% of their asset in Chad and Cameroon to Savannah Energy. Savannah Energy PLC is a leading African focused British independent energy company currently operating in Nigeria and Niger.
“So it’s not only in Ghana that Exxon is leaving, but many other countries as well. They are doing divestment and are also doing cost cutting,” Mr Amin Adam disclosed, when he appeared before the Joseph Osei-Owusu chaired Appointments Committee of Parliament to be vetted yesterday. This response comes to confirm what government communicators have being saying, when news about the exit of ExxonMobil’s broke.
It would be recalled that Exxon relinquished the entirety of its stake in the Deepwater Cape Three Points block and resigned as its operator after fulfilling its contractual obligations during the initial exploration period. The work done so far included processing about 2,200 square kilometers (850 square miles) of seismic data, but Exxon didn’t drill any exploration wells.
Government communicators indicated that Exxon Mobil exited based on the financial strategy it put in place after the covid-19 challenges. They said the company was prioritising fields where there is advantage of favourable cost environment while preserving value and also concentrate on areas where they are already doing production.
But the Minority caucus in parliament accused President Akufo-Addo of collapsing the Oil sector because it has been unable to put on the table, a more ‘competitive’ and ‘best deal’ that could keep ExxonMobil interested to continue its oil exploration activities in Ghana. They said ExxonMobil’s exit jeopardises the country’s ambition to produce about 500,000 Barrels of Oil per day by 2024.
But yesterday the Deputy Minister Designate said “we were all happy when ExxonMobil came to Ghana because as one of the big giants in the industry, they bring confidence of the investor to one’s oil and gas market. However, their reason for living is not based on Ghana’s poor performance but the company’s own restructuring activities”, Mr Amin Adam said.
He cited the U.S government’s focus on climate change also as a factor that is pushing Exxon to increase investments in renewable and reducing their investment in oil.