• 8 hours Saudi Fund Buys Stake in Hollywood Talent Agency
  • 14 hours Putin Is A New Russian Stalin - Victory For The Next 6 Years
  • 4 days Russian hackers targeted American energy grid
  • 3 days Is $71 As Good As It Gets For Oil Bulls This Year?
  • 9 hours G20 Rejects Calls for Cryptocurrency Regulation
  • 5 hours Country With Biggest Oil Reserves Biggest Threat to World Economy
  • 9 mins Self-Driving Cars' First Fatality
  • 5 hours Trump Bans Venezuelan National Cryptocurrency
  • 5 hours Is Trump Harming Oil Industry?
  • 8 hours Volkswagen To Announce $340 Million Tennessee Investment To Build New SUV For U.S. Market
  • 9 hours Africa Is The New Land Of Opportunity For Investors
  • 3 days HAPPY RIG COUNT DAY!!
  • 13 hours Miners against Government: Largest Miners In Congo Quit Chamber Of Commerce Amid Growing Tax Dispute
  • 3 days Oil Boom Will Help Ghana To Be One Of The Fastest Growing¨Economies By 2018!
  • 3 days Spotify to file $1 billion IPO
  • 5 hours Tillerson just sacked ... how will market react?
Alt Text

Solving Renewable Energy’s Biggest Problem

While renewable energy appears to…

Alt Text

China Plans Record Natural Gas, Coal Production In 2018

China expects to produce record…

Alt Text

Natural Gas Exports Could Be Hit By Trump’s Trade War

President Donald Trump’s controversial tariffs…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Trending Discussions

This African Nation Just Mortgaged Its NatGas Reserves To China

LPG terminal

The current downturn in the global oil and gas sector is yielding some innovative approaches to project finance.

And one nation this week came up with an unprecedented strategy for moving its petroleum sector forward.

That’s the West African country of Ghana. Where the government says it is close to a deal to “mortgage” its petroleum reserves to Chinese development banks — in exchange for massive loans needed to build production equipment.

Ghana’s Minister of Finance, Seth Terkper, said in a radio interview late last week that his government has tabled an unusual proposal to China Development Bank (CDB). Offering to let them have output from the massive Jubilee offshore natgas field for up to two decades — if they pay to put it into production.

Finance Minister Terkper said his government is asking CDB to kick in $1.5 billion needed to build Jubilee. In the form of a loan, that will be paid back in production from the field.

That repayment would reportedly consist of natural gas liquids exports from the project — starting in 2018, and running for a period of 19 years.

The strategy is an interesting one. Actually building on a previous loan program that CDB agreed upon with Ghana nearly 10 years ago. That deal had contemplated a loan of $3 billion to Ghana’s government, in exchange for crude oil — but falling oil prices spooked the bank, and only $1 billion in funds were actually dispersed.

Ghana’s government now wants to access the remaining $2 billion — using higher-value natural gas as an enticement. A strategy somewhat akin to offtake deals often struck in the private sector. Where a commodity end user provides development capital in exchange for guaranteed supply.

The difference here is, this deal is being proposed by a government — an entity charged with managing domestic natural resources for the good of the people. And there are varying opinions on how much value Ghana itself might actually realize from such a loan arrangement.

If successful, this could become a new model for resource development — especially in emerging markets. Watch for a response from Chinese officials to Ghana’s proposal.

Here’s to making it work.

By Dave Forest

More Top Reads From Oilprice.com:

Back to homepage

Trending Discussions

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News