Italian energy major
) reported its first oil discovery in the Offshore Cape Three
Points (OCTP) block, located in the Tano Basin, about 50 km off the
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This discovery is close on the heels of the Memorandum of
Understanding (MoU) signed between the Government of Ghana and Eni
as well as Dutch commodities trading company, Vitol. Per the MoU,
Eni and Vitol will be responsible for the development and
commercialization of natural gas resources discovered in the OCTP
Block for the domestic market. The MoU primarily emphasizes on the
domestic gas market, where Eni and its partners wish to participate
in an aggressive manner.
The latest find holds significance as it has the potential for
commercial growth, which was substantiated by the availability of
oil, natural gas and condensates in the block. In order to
establish the magnitude of the discovery and realize the viability
of the commercial development, Eni intends to drill other wells
The discovery, which was made through the Sankofa East-IX well, was
drilled to reach a depth of 3,650 meters, in 825 meters of water. A
find of 28 meters of gas and condensate as well as 76 meters of
gross oil pay was made in the Cretaceous sandstones.
During the production tests, wells generated a daily oil output of
about 5,000 high quality barrels, although the flow rate was
affected by inadequate surface infrastructures. The engineering
studies for the growth and marketability of gas reserves of the
block are ongoing, which is in sync with the ideology approved in
the MoU, signed by Eni and its partners.
Eni, through its subsidiary Eni Ghana Exploration and Production
Limited, operates OCTP Block, with a 47.22% stake, while its
partners Vitol Upstream Ghana Limited and state company Ghana
National Petroleum Corporation (GNPC) hold 37.78% and 15% stakes,
respectively. Further, GNPC has an option for an additional 5%
Eni - which recently inked a sale and purchase agreement with the
U.S. super major
) for 25% farm-in to three exploration blocks, LB 11, LB 12 and LB
14, offshore Liberia - holds a Zacks #4 Rank (short-term Sell
rating). Longer term, we maintain our Neutral recommendation.