The project’s stated objective is to increase the availability of natural gas for clean power generation by leveraging private capital investment. The project is designed to substitute expensive, imported, liquid fuel used by the power sector of Ghana with domestic, natural gas, as well as enable new gas-fired power generation capacity to be constructed. The project supports the development of the gas reserves of the Offshore Cape Three Points (OCTP) block, which includes the non-associated gas fields Sankofa and Gye Nyame (“Sankofa Gas Field”) as well as the Sankofa East oil field. The technical development of the different fields (oil and gas) is slightly sequenced and for this reason the joint development of both OCTP components is referred to as Phase 1 (oil) and Phase 2 (natural gas). The proposed World Bank support will only apply to the OCTP’s Phase 2 (gas) development and related commercial agreements. The OCTP project will be developed by a joint venture composed of Eni Ghana Exploration and Production Limited, Vitol Upstream Ghana Limited and Ghana National Petroleum Corporation (GNPC).

Location: The Sankofa Gas Field is in the Gulf of Guinea, approximately 60 km south of the village of Sanzule on the Western Ghanaian coast. Gas will be transmitted from the floating production, storage and offloading unit via a 63-km undersea pipeline that makes its landfall slightly to the west of the community of Sanzule, in the Western Region of Ghana. From the landing point, a pipeline of approximately 800 m will convey the gas to the Onshore Receiving Facility (ORF) for compression. A short pipeline will carry the compressed gas to the GNPC pipeline, adjacent to the Onshore Receiving Facility site to the north.

Resources needed: Approximately 96 hectares of land for the Onshore Receiving Facility.

Risk Assessment: Category A.

The World Bank classifies proposed projects based on the type, location, sensitivity, and scale of the project and the nature and severity of its potential environmental impacts. Category A is assigned to a project only if it is likely to have “significant adverse environmental impacts that are sensitive, diverse or unprecedented.”

APPLICABLE SOCIAL & ENVIRONMENTAL STANDARDS

According to the World Bank, the following World Bank Performance Standards are triggered by this project. The World Bank Performance Standards apply to projects that are being implemented by the private sector, or (private sector activities).

PS 1. Assessment and Management of Environmental and Social Risks and Impacts- this safeguard is triggered because project operations may affect the marine and coastal environments due to crude oil spill from the floating production, storage and offloading unit (FPSO) which handles oil and associated gas from the oil field development as well as non-associated gas from the gas field development. Accidental events assessed involve a blowout from an oil well or a gas well, gas leaks, fire or explosion at the FPSO or the ORF or its pipelines.

PS 2. Labor and Working Conditions- this safeguard is triggered because the project will employ many people that will require attention to their working conditions. During the construction phase the peak of total workforce for onshore construction will be approximately 400-600 people, while for offshore activities about 300 workers will be employed for drilling activities, 210 for floating production, storage and offloading unit (FPSO) mooring and 200 for gas export pipeline laying. A temporary accommodation camp will be constructed at the Onshore Receiving Facility (ORF) site. During operations, permanent employees on the FPSO will be approximately 65, while 45 people will be employed at the ORF where there will be permanent accommodation facilities.

PS 3. Resource Efficiency and Pollution Prevention- this safeguard is triggered because during development and production operations, the project activities will emit varying amounts of airborne emissions, including carbon monoxide (CO), oxides of nitrogen (NOx), oxides of sulfur (SOx), volatile organic compounds (VOCs), and particulate matter. Fugitive emissions of natural gas, which mainly consists of methane (CH4), will be generated from various equipment and components, including seals, valves, flanges, gas turbines, and storage tanks. During development and construction, emissions will be produced offshore and onshore by equipment and vessels from combustion engines, and dust will be generated onshore from earth movement activities and traffic.

PS 4. Community Health, Safety and Security- this safeguard is triggered because the community of Sanzule, where the onshore component of the project will be located has a population of approximately 1,600 that is likely to be affected by project-related health and safety concerns. These include accidents and leakage, socio-cultural and health impacts due to in migration of people in search of economic opportunities and conflicts with enforcement agents and project security in the FPSO and Right of Way exclusion zones.

PS 5. Land Acquisition and Involuntary Resettlement- this safeguard is triggered because there are currently 336 small farm plots or fishponds on the land acquired, affecting 238 individual farmers. Of the affected farmers 199 are eligible for compensation while the remaining 39 established their farms or fishponds after the cut-off date. Approximately half of the affected farmers claimed to own their farmland based on the customary system, while most of the others rented the land in exchange for a percentage of the harvest. Also half of the farmers indicated that farming is their main occupation while the other half use the land to supplement their livelihood.

PS 6. Biodiversity Conservation and Sustainable Management of Living Natural Resources- this safeguard is triggered because numbers of sensitive fish species are present offshore Ghana, including whales, sea turtles, two species of sawfish, two species of angel sharks and a grouper, all considered as critically endangered. The ORF concession is modified habitat, largely disturbed by human activity for which dust, light, noise and vibration from construction and production operation activities as well as the presence of larger numbers of people in the project area will result in direct disturbance to local fauna. It could also affect breeding and nesting patterns.

OUR RISK ASSESSMENT
Based on Bank documents, we believe the project may have impacts on the following rights:

Right to Adequate Housing & Property

According to project documents, the project area consists of farmland used by community members for crop growing, fish farming, firewood gathering and other resources. Project affected persons are also likely to lose their right to land in the project area as a large proportion claimed to own it based on the customary system, while others rented the land in exchange for a part of the harvest. Specifically, bank documents indicate that there are currently 336 small farm plots or fishponds on the land acquired, affecting 238 individual farmers. Of the affected farmers 199 are eligible for compensation while the remaining 39 established their farms or fishponds after the cut-off date.

Right to Livelihoods

As noted above, the acquisition of land by the project is likely to affect their livelihood as most of them indicated that farming is their main occupation while others use the land to undertake activities that supplement their incomes.

Right to Healthy Environment

Increased atmospheric pollutant concentrations mainly due to continuous exhaust emissions from hydrostatic testing and by the ORF facilities including vehicles, engine-driven machinery and power generators. As noted above, during development and production operations, the project activities will emit varying amounts of airborne emissions, including carbon monoxide (CO), oxides of nitrogen (NOx), oxides of sulfur (SOx), volatile organic compounds (VOCs), and particulate matter. Fugitive emissions of natural gas, which mainly consists of methane (CH4), will be generated from various equipment and components, including seals, valves, flanges, gas turbines, and storage tanks. Project operations are also likely to increase dust emissions from earth movement, excavation works, stockpiles and vehicle movement on unpaved surfaces. Activities will affect breeding and nesting patterns and may result in direct disturbance to local fauna due to dust, light, noise and vibration from construction and production operation activities.

Right to Water

The project is likely to cause degradation of surface and groundwater water quality due to increased sediment load, potential contamination from improper handling of waste and spillages of the fuels and chemicals. The project may lead to reduction in groundwater resources due to water consumption, surface sealing and infilling leading to lowering of groundwater levels.

Labor Rights

As noted above, the construction phase will entail the peak of total workforce for onshore construction [which] will be approximately 400-600 people, while for offshore activities about 300 workers will be employed for drilling activities, 210 for floating production, storage and offloading unit (FPSO) mooring and 200 for gas export pipeline laying. A temporary accommodation camp will be constructed at the Onshore Receiving site.

Bank financing: World Bank. The Sankofa Gas Project is also being developed by the Ghana National Petroleum Corporation and private financiers, Eni and Vitol.

Eni S.p.A. is an Italian multinational oil and gas company listed on the Milan and New York stock exchanges owned at 30 percent by the Italian government. Eni Ghana Exploration and Production Ltd is the operator of the Sankofa project and holds a 44.4 percent stake in the Project.

The Vitol Group is a privately held company founded in Rotterdam in 1966 with its largest operations in Geneva, Houston, London, and Singapore. Vitol will hold a 35.6 percent in the project. As Eni is designated as the operator of the project, a Joint Operating Agreement establishes the rights and obligations of each of the parties.

Borrower: Republic of Ghana
Amount of bank loan or investment: $500 million
Total project cost: $7.9 billion

World Bank
Contact: Sunil Mathrani
Title: Senior Energy Specialist
Tel: +225 2240 0424
Email: smathrani@worldbank.org
Contact: Robert Schlotterer
Title: Senior Infrastructure Finance Specialist
Tel: +1 202 473 6864
Email: rschlotterer@worldbank.org

Borrower/Client/Recipient
Name: REPUBLIC OF GHANA
Contact: Ministry of Finance
Title: Mr. K. Oku-Afari
Tel: +233 302 665 269
Email: koku-afari@mofep.gov.gh

Implementing Agency
Name: Sankofa Gas Field International JV
Contact: Mr. Fabio Cavanna
Title: Managing Director
Tel: +233 302 761 790
Email: fabio.cavanna@enighana.eni.com

CONSULTATIONS
Project documents indicate that consultations were conducted in the project affected communities of the Sanzule, Krisan, Eikwe Bakanta, Atuabo and Asemda-Suazo in Ellembelle District. The primary objective of stakeholder engagement was to provide sufficient opportunity to stakeholders to voice their opinions and concerns, and to ensure that these concerns influence project decisions. Engagements included face to face meeting, community/group meetings and focus group discussions for special interest groups with particular concerns such as fishing groups and land users.

According to bank documents, stakeholders indicated that the proposed Project area is currently used for fishing, farming and grazing and expressed concern regarding the loss of livelihoods stressing the need for compensation of any lost livelihood. They expressed concern that there would be in-migration of people (especially job-seekers) into the area resulting in impacts to the socio-economic structure, traditional values, demographics and cultural heritage. They also identified those cultural resources in the area including cemeteries and potential archaeological resources currently located within the Project area that need to be preserved.

PROJECT-LEVEL GRIEVANCE MECHANISMS
The project team will appoint a Grievance Officer (GO) to assist the Community Liaison Officer. The Grievance Officer will be responsible for collecting, logging and prioritizing grievances. All grievances shall be logged using a Grievance Form. Eni will log, document and track all grievances within a grievance register to be managed and updated by the Grievance Officer with oversight from the Project CLO. Eni will assess each type of grievance for an understanding of the types of response required and to assign responsibility of the appropriate individual to manage the response. Eni will investigate fully all grievances submitted, and where necessary, will involve other departments, contractors and senior management in the process in order to fully understand the circumstances that led to the grievance being raised. A response should be provided to the complainant in all cases, by the CLO, and if necessary the local Eni’s management.

ACCOUNTABILITY MECHANISM OF WORLD BANK

The World Bank Inspection Panel is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by a World Bank-financed project. If you submit a complaint to the Inspection Panel, they may investigate to assess whether the World Bank is following its own policies and procedures for preventing harm to people or the environment. You can contact the Inspection Panel or submit a complaint by emailing ipanel@worldbank.org. You can learn more about the Inspection Panel and how to file a complaint at: http://ewebapps.worldbank.org/apps/ip/Pages/Home.aspx.