With the planned decommissioning of some oil exploration fields that is set to begin earnestly, reports indicate that government is taking concrete steps to establish a decommissioning hub that will undertake subsequent decommissioning projects.
This is a strategic investment by government aimed at maximizing its revenues in the upstream petroleum sector due to an emerging trend that drilling rig decommissioning activities have enormous revenue potentials.
Currently, no country in the sub-region has established a decommissioning hub to take advantage of this potentially revenue spinning business in the oil industry.
Reports indicate that the UK, U.S and Norway are ranked the top three decommissioning destinations while Nigeria is following Angola as the seventh country in the world in terms of expenditure on decommissioning over the next decade.
In a recent report published by Wood Mackenzie, a global energy consultancy group, Nigeria and a list of some oil producing countries are expected to spend over US$105 billion on decommissioning over the next decade.
“Over 400 oil and gas fields have stopped producing in the last five years and we expect not less than US$32 billion to be spent between 2018 and 2022 on decommissioning in the next five years”, Wood Mackenzie’s report states.
This is a potential area which Ghana stands to maximize its petroleum revenue from, by investing into this activity.
A source at the Ministry of Energy told the Goldstreet Business that the intended move by government is a good investment of state resources that would strategically position Ghana within the sub-region as a decommissioning destination; emphasizing the need to build the capacity of Ghanaians to enable more active local participation in this aspect of the industry.
“There is the need to strengthen the Petroleum Local Content and Local Participation Regulations, 2013 (L.I. 2204) to require the industry to pick more Ghanaians and train them on the job to enable them gain enormous experience in the sector”, the source said.
Wood Mackenzie has envisaged that, Canada, Thailand, Brazil, Malaysia, Netherlands, Australia and Indonesia being the top 12 largest spenders, would stake US$82 billion on decommissioning.
Decommissioning involves the plugging and abandoning of exploration and production wells, rehabilitating the site and the disposal of metallic equipment used in production.
By Dundas Whigham
