Boakye Agyarko exchanges documents with Pamela Darwin, Vice President for ExxonMobil, Africa
Government says the arrival of ExxonMobil in Ghana’s oil and gas exploration space should send a signal to potential investors around the world that Ghana is now open for business and has exciting commercial opportunities in a secure maritime environment.
Speaking yesterday in Accra at the signing of a petroleum agreement that offers exploration and production rights for the Deepwater Cape Three Points block, Boakye Agyarko, Energy Minister, noted: “We anticipate heightened activity in the coming years from both existing and potential projects in line with the Government’s strategic vision of building an industrialized nation powered by a robust energy sector.”
He said ExxonMobil decided to invest in exploration activities offshore Ghana after the final ruling of the International Tribunal for the Law of the Sea (ITLOS), which went in favour of Ghana.
“As a total package, the fiscal terms of this agreement are an improvement over past agreements signed before the commercial discovery in 2007….The comprehensive legal provisions which have been promulgated and refined since the commercial discovery include the Petroleum (Exploration and Production) Act, 2016 (Act 919) and the Income Tax Act, 2015 (Act 896). The agreement marks the first implementation of the 15 percent carried interest held by GNPC in line with the provisions of Act 919, alongside royalties, taxes and other payments, bringing significant financial benefits to the nation and a higher quantity of net oil than in a number of previous agreements.”
Ghanaian ownership is estimated at 30 percent.
Mr Agyarko revealed that exploration activities, including acquisition of seismic data and analysis, are expected to commence later this year.
The Deepwater Cape Three Points (DWCTP) block, located 57 miles (92 kilometres) off the coast of Ghana, measures approximately 366,000 acres (1,482 square kilometers) in water depths ranging from 5,085 feet to 9,350 feet (1,550 meters to 2,850 meters).
Dr K.K. Sarpong, Chief Executive Officer (CEO) of GNPC, in a remark, said the two key innovations to the agreement were the Development Lon Agreement and the Default Loan Agreement.
Such innovations, he added, were aimed at securing GNPC’s financing arrangements during the development to give comfort to the contractor party.
Steve Greenlee, President of ExxonMobil Exploration Company stated: “The addition of the block reaffirms ExxonMobil’s commitment to pursuing high quality projects in areas with large resource material. We are excited to partner with the Government of Ghana as we employ our significant upstream experience and technological expertise in assessing the exploration opportunities in this block.”
ExxonMobil will carry out the work programme as operator, and holds 80 percent interest.
GNPC holds 15 percent interest. ExxonMobil will work with Government to identify a Ghanaian company to potentially hold up to 5 percent interest.
After this indigenous company signs the agreement, it would proceed to Parliament for endorsement followed by its immediate implementation.
By Samuel Boadi