Italian energy major
) and Dutch commodities trading company Vitol have inked a
Memorandum of Understanding (MoU) with the Government of Ghana. The
government representatives include the Minister of Energy, and
Ghana National Petroleum Corporation ("GNPC").
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The license of Offshore Cape Three Points (OCTP) Block spans over
268 square miles, reaching water depths of 160-4,500 feet. Eni -
the operator of OCTP Block - holds a stake of 47.22%, while its
partners Vitol and GNPC hold 37.78% and 15%, respectively.
Per the MoU, Eni and Vitol are responsible for the development and
commercialization of natural gas resources discovered in the OCTP
Block (located in the Tano Basin of Ghana) for the domestic market.
The MoU underlines the key ideology for the prospective development
of the contracted area and marketing of the discovered gas. The MoU
places special emphasis on the domestic gas market, where Eni and
its partners wish to participate in an aggressive manner.
Eni's signing of the MoU is in sync with its strategy of
maintaining a lead in exploring indigenous gas resources and aiding
the socio-economic advancement of the region where it operates.
Eni's presence in Ghana dates back to 2009. Currently, the company
controls two exploration blocks- OCTP and Offshore Keta - with
daily operated output of about 450,000 barrels of oil equivalent in
The company has been operating in Sub Saharan Africa since the
1960s and is now carrying out exploration and production projects
in Angola, Congo, Ghana, Gabon, Mozambique, Nigeria, Democratic
Republic of Congo, Togo, Kenya and Liberia.
With Ghana emerging as a regional energy powerhouse, Eni has
advantageously positioned itself to benefit from the rising gas
activities in the region. The country turned into an oil exporter
when its first consignment of oil from the gigantic Jubilee field
was shipped in January 2012. The field is estimated to hold
significant gas reserves, which the partners plan to exploit in the
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 #3 Rank (short-term Hold
rating). Longer term, we maintain our Neutral recommendation.