Lonrho to Invest $1 Billion in Oil Services Ports in Ghana

Lonrho Plc (LAF) will invest $1 billion to build ports that will service oil rigs in Ghana’s Western Region, a company official said.

“We anticipate spending $10 million for feasibility studies for the deep water oil services ports,” Steven Gray, the company’s development director, said in an interview today in the capital, Accra. “The studies will end in August and if that demonstrates viability and sustainability then construction will start by the last quarter of this year.”

Ghana, which began exporting oil in 2010, plans to boost output fivefold in the next five years as new wells come on stream, Deputy Minister of Finance and Economic Planning Fifi Kwetey said yesterday. The country’s main Jubilee field pumped about 85,000 barrels a day at the end of last year and Tullow Oil Plc, which operates the field, plans to increase production to 120,000 barrels per day by 2013.

Preliminary studies show that there is need for dedicated ports for the oil and gas industry with a “number of potential tenants and users” showing interest in “Ghana as a regional hub for their oil and gas operations,” Gray said. Lonrho plans to invest “$400 million in the first phase,” increasing it to $1 billion if demand warrants it.

The project is based on a 50-year concession split in two periods of 25 years each, he said. The company signed a memorandum of understanding with the government in August last year to execute the project.

To contact the reporter on this story: Ekow Dontoh in Accra at edontoh@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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