Ghana ‘Mortgages Off’ All Its Oil To China In A $1.5B Loan Deal

Ghana, will offer gas from the Jubilee oil and gas field to the Chinese government from 2018, as part of securing an additional $1.5 billion from a loan deal with China Development Bank

The government said that this part of its self-financing loan strategy initiative  to ease the burden on the nation’s tax-payers, and will not plunge the West African nation into power crisis and more economic crisis, contrary to claims by the  opposition New Patriotic Party(NPP).

“The premise for the CDB facility, which is in tune with our self-financing loan strategy is that proceeds from any commercial project must be used to pay for any loans that are used to finance the project,” Citifmonline quoted Seth Terkper, the Finance minister.

Ghana received $1 billion from the Chinese lender and is using the deal to entice China to release the remaining $1.5 billion, which it is using to upgrade its energy and infrastructure sectors.

In the initial agreement, the Ghanaian government had committed to supply 13,000 barrels of oil daily up to 2027, but both parties withdrew from the deal after the global slump in oil prices in 2014, Bloomberg reported.

The move to gift gas to the Asian power comes, months after Tullow Oil, the British exploration company that discovered the oil and gas field in 2007 warned of a looming shut-down of gas exploration from the field next year.

The shut-down that will last about three months will be caused by proposed maintenance works on its floating production ship, Natural Gas World report.

The proposed deal to ship gas to China is likely to compound the power crisis that the West African nation has been experiencing since 2013 due to its heavy reliance on electricity.

In 2014, the government created the Power ministry top help deal with the chronic power outages.


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