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Parliament Ratifies Petroleum Agreement.

Source:GBC

Parliament has ratified the Petroleum Agreement among the Government of Ghana, Ghana National Petroleum Company, GNPC Exploration Company, Camac Energy Ghana Limited and the Base Energy Limited for the exploration, development and production operations in the expanded Shallow Water Tano Block, Offshore. The three phased exploration will be done at an estimated cost of Ninety Million US Dollars. Presenting the Report of the Committee on Mines and Energy for the ratification of the agreement, the Chairman of the Committee, Dr. Kwabena Donkor said the committee is satisfied with the provisions of the agreement. He said equity participation of indigenous Ghanaian companies which is 13-point-5 percent is higher than the requirement prescribed in regulation 4(2) of L.I 2204. The House also approved the agreement among the Government of Ghana, Ghana National Petroleum Company, Amni International Petroleum Development Company for the exploration, development and production operations in the Offshore Central Tano Block. For the details here is a report by our Parliamentary Correspondents Dominic Hlordzi and Augustus Acquaye.

The one thousand 508 km square, expanded Offshore Shallow Water Tano Block, is bounded on the North by the Ghana Coastline, on the West by the Maritime border with Cote D’Ivoire, on the South by the Deepwater Tano Block and on the East by the West Cape Three Points Block. Article 4 of the Agreement commits the contractor to a minimum exploration programme in three phases comprising the initial exploration period of two years, one and half years for the first extension period and another one and half years for the second extension period. At the initial stage the contractor would be required to reprocess existing 2D and 3D Seismic Data over the applied contract area and drill one exploration well at a minimum expenditure obligation of thirty million US Dollars. The first and Second stages will also be carried out at the cost of sixty million US Dollars. Presenting the report for approval, the Chairman of the Mines and Energy Committee, Dr. Kwabena Donkor lauded the 13-point-5 percent equity participation of indigenous Ghanaian companies in the contract and commended the Ministry of Energy and the Government Negotiation Team for ensuring that regulation 4(2) of L.I 2204 was adhered to in the agreement.

The Agreement is for a total of 25 years if a commercial discovery is made. However the Agreement expires after seven years if no commercial discovery is made within that period. The exploration operations are required by the Agreement to commence by 60 days after the ratification of the agreement by Parliament. The House also gave approval for the agreement among the Government of Ghana, Ghana National Petroleum Company, GNPC Amni International Petroleum Development Company for the conduct of exploration development and production operations in the Offshore Central Tano Block. The area applied for is the relinquished portion of the original Tullow Deepwater Tano Block. It is approximately 277-point-nine km square. The committee noted that the agreement will give improved benefits to the State in event of discovery of oil in commercial quantities. It was found out that the different fiscal elements under the Agreement will provide the State an approximated 71 to 77percent of net oil.