Huge Oil Opportunities With Japan, Ghana

Huge Oil Opportunities  With Japan, Ghana
Huge Oil Opportunities  With Japan, Ghana

Oil Minister Bijan Namdar Zanganeh on Monday discussed export of crude oil to Japan with a top aide to Japanese Prime Minister Shinzo Abe while Ghana's president called for cooperation with Iran in building refineries in the African country.

Zanganeh said he expects Japan to raise oil imports from Iran to pre-sanctions levels now that international sanctions against the Persian Gulf country are lifted, Shana reported.

"We anticipate Japan and its state-run companies will bring their purchases of Iranian crude oil at least to the level that existed before sanctions," he said in a meeting with Katsuyuki Kawai, the special adviser to Japan's premier, in Tehran.

Japan is considered a traditional buyer of Iran's crude, besides China, South Korea, India and Turkey.

Zanganeh said there is a plethora of opportunities for cooperation between Tehran and Tokyo, including in refinery and petrochemical sectors, production of liquefied natural gas and Japanese finance in Iran's energy projects.

"Abe is set to visit Tehran in the near future, as the two countries seek to add a new chapter in economic and trade relations after the lifting of sanctions against Tehran in January," he said.

  Ghana Oil Collaboration

Also on Monday, Ghana's President John Dramani Mahama said Tehran and Accra can collaborate in constructing refineries in Africa’s ninth-largest economy.

Speaking on the sidelines of Iran-Ghana Economic and Business Cooperation Forum in Tehran,  Mahama added that Tehran can be the best economic partner for Accra as it enjoys a great advantage in different sectors, including oil and gas, agriculture, power generation, production of cement, household appliances and engineering services, IRNA reported.

A 40-strong delegation of Ghanaian businessmen and officials explored grounds for cooperation in oil, gas and power sectors in separate meetings with high-ranking Iranian officials in Tehran.

According to Mahama, notwithstanding Ghana's reliance on other states in providing its much-needed oil byproducts, Iranian experts can play an active role in building refining units in the country that exports 80 tons of gold per annum.

Underscoring the fact that Ghana produces 120,000 barrels of oil per day, the president said the country started oil production as of August 2015 and plans have been made to increase oil output by as much as 200,000 bpd in the short run.

"We are targeting a fourfold increase in oil production by 2020 and oil output is expected to jump by 500,000 bpd in the said period. Progress on developing new oil and gas fields will be particularly welcome given the recent drop in oil prices, which has caused a significant drawdown in capital spending for exploration," he said.

Zanganeh on Sunday explored grounds for the export of oil and petroleum products to Ghana in a meeting with his Ghanaian counterpart Emmanuel Armah Kofi Buah.

"Ghana produces little amount of oil and a majority of its [energy] reserves are still untapped," he said. "Iran is ready to start oil shipment to Ghana.

The oil minister noted that a memorandum of understanding will be signed "within days" with Africa's ninth-largest economy.

Zanganeh also said an Iranian delegation will travel to Ghana to help the country in downstream, refining and distribution network sectors.

  Ghana's Energy Sector

Oil has been a major driver for Ghana’s economy in recent years. It joined the ranks of oil exporting countries when it began commercial oil production on 15 December 2010. This followed the historic 2007 offshore discovery, aka the Jubilee Field.

The field constitutes Ghana's most significant and viable oil deposit. Estimates of total oil reserves range from 800 million to 1.8 billion barrels.

The oil industry of Ghana is run by the state-owned Ghana National Petroleum Corporation and administered by the state-owned Ghana Oil Company.

Bank of Ghana data show that in December 2015 Ghana imported $477.4 million worth of crude oil but earned $429.4 million from exporting its crude, leaving a deficit of $40 million. 

Referring to the newly discovered gas field called Sankofa Gye-Nyame with an estimated capacity of 3 trillion cubic meters, the Ghanaian president said the first gas reserve development will commence in 2017 by Italy’s Eni and Switzerland-based Vitol.

"The gas field will provide enough gas to power Ghana’s thermal power plants for at least 15 years. The gas produced by the fields will replace crude and fuel oil currently being burned to generate power, lowering costs, boosting efficiency and trimming emissions," he added.

Once known as the Gold Coast for the abundance of metals, Ghana produced 100 tons of gold in 2011, though its supplies are diminishing as there are only an estimated 1,400 tons in reserve.

Ghana’s gold mining industry makes up 5% of the country’s gross domestic product and minerals constitute 37% of the nation's exports. It is second on the list of largest gold producing countries in Africa, behind South Africa.

According to reports, during the first 10 months of the current Iranian year (ending March 19, 2016), Iran exported $757 million worth of commodities, including oil byproducts, to the African state, yet its import from Ghana stood at $4 million.