The African Centre for Energy Policy (ACEP), has called on government to ‘act right’ and preserve the investment climate of the oil industry and ultimately avert what it describes as ‘depleting’ investor confidence in the country’s petroleum upstream sector.
The assertion by ACEP follows the exit of oil major, ExxonMobil from Ghana and the ongoing impasse between Eni Ghana and Springfield over the execution of a Unitization and Unit Operating Agreement (UUOA) of the Sankofa and Afina oil fields.
ACEP in a press release issued on Thursday, June 3, averred the current happenings in the oil industry has the potential to undermine progress made over the years in encouraging investments to the sector, particularly given the current global energy transition from fossil fuel to cleaner sources of energy.
“The positive response of major oil producers and investors to the transition is promoting alternative energy sources that are significantly suppressing the demand growth for fossil fuels. A scan of the strategy of major oil producers shows a clear transition path to becoming energy companies through extensive Research and Development (R&D),” stated ACEP.
Adding the shift to cleaner sources of energy is shrinking available capital for investments in new exploration activities in the oil industry and generating extreme competition for limited exploration funds.
In the attainment of the climate change goals contained in the 2015 Paris Agreement and transition from fossil fuels to renewable energy and low carbon emissions, big oil majors like Eni, BP, Total and Shell, have all written-down their assets and reduced capital for oil exploration by billions of dollars.
ACEP, on the back of the recent events has therefore urged government to undertake transparent stakeholder engagements to create a more positive, assuring and less risky political environment to engender investments into the sector.
Read details of the press release: