Some oil fields may soon be shut down – COPEC

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The Chamber of Petroleum Consumers Ghana (COPEC), has noted that some oil producers and oil fields may be soon forced to shut down production due to lack of storage space globally, hence the need to resource the local oil refinery.

He advised the government to consider getting the local oil refinery back to productivity in order to process Ghana’s oil locally.

Duncan Amoah, Executive Director of COPEC also asked the government to consider helping the Bulk Oil Storage and Transportation (BOST) to get a good credit line or an open credit system in place immediately to stock Oil at this point for the country’s strategic reserves or stocking needs.

He noted that BOST should be able to stock enough oil as the world crude prices are dropping drastically.

Currently, oil is trading at -$15 on the international market which is about the lowest in several decades

Mr Amaoah said in a statement that : “We do believe this notwithstanding, however, that the markets are ripe for the Ghana Government to consider helping The Bulk Oil Storage and Transportation ( BOST ) to get a good credit line or an open credit system in place immediately to stock Oil at this point for the country’s strategic reserves or stocking needs.”

He also noted that pump prices are very unlikely to see any reductions as is being expected by a cross section of the Ghanaian public following the drop in oil prices.

Several Ghanaians expect the prices to drop at the local pumps.

But Duncan Amoah said : “Yes, it is indeed true that oil prices especially the WTI platform Is currently trading at -$15 which is about the lowest in several decades.

“Brent however is still trading around $26 as at close of day and as such pump prices are very unlikely to see any reductions as is being expected by a cross section of the Ghanaian public.

“The disparity in the two benchmarks is largely due to a supposed unavailability of storage space across the US market with some traders allegedly paying for cargo to be returned before the close of the futures market for the month of April on 22/04/20.

“This pricing collapse is largely reflected on crude and has very little direct impact on processed or refined products and by extension local pump prices.”

Below is COPEC’s full statement…

CHAMBER OF PETROLEUM CONSUMERS-GHANA

ACCRA

PETROLEUM NEWSFLASH

Social media is currently awash with news of the collapse of Oil prices internationally with a section of Ghanaians demanding this price collapse immediately reflect at the pumps.

Yes, it is indeed true that oil prices especially the WTI platform Is currently trading at -$15 which is about the lowest in several decades.

Brent however is still trading around $26 as at close of day and as such pump prices are very unlikely to see any reductions as is being expected by a cross section of the Ghanaian public.

The disparity in the two benchmarks is largely due to a supposed unavailability of storage space across the US market with some traders allegedly paying for cargo to be returned before the close of the futures market for the month of April on 22/04/20.

This pricing collapse is largely reflected on crude and has very little direct impact on processed or refined products and by extension local pump prices.

Moreover the Ghanaian market is largely Brent benchmark dependent and as such a collapse on WTI is quite unlikely to have any trickle down effect on local pump prices here.

We do believe this notwithstanding, however, that the markets are ripe for the Ghana Government to consider helping The Bulk Oil Storage and Transportation ( BOST ) to get a good credit line or an open credit system in place immediately to stock Oil at this point for the country’s strategic reserves or stocking needs.

The Government should also consider getting our local refinery back to productivity in order to process Ghana’s oil locally as we understand some of our producers or Oil fields may be soon forced to shut down production due to lack of storage space globally.

 

Whatever security guarantees or arrangements that needs to be put in place to forestall any games with the strategic  reserves must certainly be robust and efficient so the country does not lose on both the upstream and downstream ends due to the low prices being recorded on the international market currently.

 

Signed

 

Duncan Amoah

Executive Secretary

 

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