Both Ghana and Ivory Coast have claimed ownership of offshore territory between the two countries were vast oil reserves have been discovered.
When Ghana found oil in 2007 and began production in 2010 at the Jubilee Field, located in the Atlantic Ocean 60km off Ghana shore, Ivory Coast petitioned the UN to complete the demarcation of its maritime boundary with Ghana.
This escalated in April 2013, when Ivory Coast announced it had struck oil in an area adjacent to Jubilee Field, Ghana’s largest oil field, and sent a correspondence to the government of Ghana casting doubt on the existing median line that divides both countries’ waters.
Ivory Coast aims to secure gas output for next decade
Ivory Coast’s Foxtrot International expects to secure natural gas production for the next decade with a series of new offshore wells. The country has invested heavily to boost power production in order to keep up with rapid GDP growth. The country relies on thermal power stations fuelled by natural gas however there is concern that it could soon face a supply crunch.
Christian Sage, Foxtrot’s managing director, told Reuters. “We are currently producing 140 million cubic feet per day. With this investment, we will secure production for at least 10 years.”
Foxtrot is partly owned by the French industrial group Bouygues. Along with partners GDF Suez and Ivory Coast’s national oil company, Petroci, it will invest around $1 billion to boost offshore production, the company said.
Ivory Coast’s gas output was around 220 million cubic feet of gas per day in 2013. The government is targeting production of around 250 million cubic feet per day this year.
Three other operators, namely CNR, London-listed Afren and Petroci, also produce gas. Nearly 70% of output is used for electricity production. Ivory Coast aims to boost power output by 80% over six years to satisfy growing domestic and regional demand.
It exports electricity to Ghana, Burkina Faso, Benin, Togo and Mali and has plans to connect Liberia, Guinea and Sierra Leone to its grid as well.
Ghana and Ivory Coast share a 640km terrestrial border
Both countries are signatories to the UN Convention on the Law of the Sea, which regulates navigational rights and territorial sea limits.
The governments of both countries set up a commission in November last year to come up with technical solutions to end the dispute over the area – which reportedly contains reserves of 2 billion barrels of oil and 1.2 trillion cubic feet of natural gas, according to official statistics from both countries.
Ghanaian Attorney General Marrieta Brew Appiah-Oppong said oil companies could continue to operate during the arbitration process, which could take up to three years.
Ghana filed the suit under the UN Convention on the Law of the Sea after 10 bilateral meetings failed to resolve the issue, she said. The two countries have never officially agreed on the boundary and their maps of territorial waters overlap.
A resolution is crucial for oil and gas exploration and it could end any uncertainty for Tullow, which first discovered the Tweneboa, Enyenra, and Ntomme (TEN) cluster development in 2009 in Ghana’s Deepwater Tano license close to the disputed area.
Oil is a major source of revenue in Ghana, a politically stable country with a fast-growing economy that also yields gold and cocoa. Ivory Coast, the world’s top producer of cocoa, is also growing strongly after years of political turmoil.
Earlier, Ghanaian Minister of Communications Edward Omane Boamah told Reuters the goal of the talks was a peaceful settlement and the government wanted to retain good relations with its western neighbour.
Tullow is the largest stakeholder in the TEN project and its partners are Anadarko, Kosmos Energy, Sabre Oil & Gas Holdings Ltd as well as the Ghana National Petroleum Corporation.
Oil exploration in Africa’s Gulf of Guinea has accelerated since Ghana discovered the giant Jubilee offshore oil and gas field in 2007 and Tullow brought it online in record time in late 2010.
Ivory Coast, which drilled only a handful of exploration wells during a decade-long political crisis that ended in 2011, is now seeking to develop its potentially lucrative offshore oil and gas sector.