Ghana’s Parliament has ratified the Petroleum Agreement by and among the Government of the Republic of Ghana, the Ghana National Petroleum Corporation (GNPC), ExxonMobil Exploration and Production Ghana (Deepwater) Limited and GOIL Offshore Ghana Limited in respect of Deepwater Cape Three points Block (DWCTP) Offshore the Republic of Ghana in accordance with Article 268 of the Constitution.
This followed a recommendation by The Select Committee on Mines and Energy as Vice-Chairman of of The Committee, George Mireku Duker said, “The Committee has critically examined the terms of the Petroleum Agreement and is of the View that the fiscal proposals will result in substantial benefits, approximately 65% 84% of the net oil to the state”.
According to him, local content aspirations, including the participation of indigenous Ghanaian companies have also been adequately considered, stressing that, “it is also believed that the work programme under the Agreement coupled with the undisputable track records of the Contractor presents high propensity for better outcomes”.
The report said that in the event of a commercial discovery of oil and gas, significant revenue will accrue to the State from the different fiscal elements including a royalty payment of 10% and 5% of oil and gas respectively; an Initial Participating (carried) Interest of 15%; payment of 35% Corporate Tax; and an Additional Oil Entitlement beyond 15% rate of return threshold.
It added that, “an amount of Two Million United States Dollars (US$2,000,000.) would be paid as Training Allowance per Contract Year..
One-time payment of Seven Million United States Dollars (US$7,000,000) will also be given as Technology Support.
GNPC may also opt to acquire Additional Participating (paying) Interest of up to 3% of Development and Production cost where there is commercial discovery”.
The Agreement is effective for a total of 25 years if commercial discovery is made.
Pursuant to Section 14 of Act 919, the Minister may approve an extension for an additional five (5) Years, subject to ratification by Parliament.
The Agreement however expires after a seven (7) year Exploration Period of no commercial discoveries made within that period.
The Contract Area forms part of the relinquished Deepwater Cape Three Points Block formerly operated by Lukoil.
It is approximately 1,474 sq. km in size, and lies in water depth between 2000m and 3000m
The Contract Area is located in the Tano -Cape Three Points basin Where exploration activities have been consistent in the last ten (10) years with significant inputs by GNPC, Vanco and Lukoil.
The Tano basin has a prolific deep-water geological structure that plays host to numerous oil, gas, and condensate discoveries.
The Jubilee Oil Field is located to the north of the block, while the Paradise, Pecan and Almond oil/condensate discoveries are located to the west and the Dzata oil/condensate discoveries are located to east of the Contract Area.
Story by Edzorna Francis Mensah
