Parliament Ratifies Four New Petroleum Agreements

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wpid-Petroleum-bill.jpgThe organisations are the Ghana National Petroleum Corporation (GNPC), CAMAC Energy Ghana Ltd, Base Energy Ghana Ltd and the GNPC Exploration and Production Company Ltd.Terms of agreement

Under the agreement, CAMAC Energy Ghana Ltd, Base Energy Ghana Ltd and the GNPC Exploration and Production Company, referred to as the ?contractor?, ?will prospect for oil in the expanded shallow water Tano block for 25 years if a commercial discovery is made.

However, the contract expires after seven years if no commercial discovery is made.

The ?contract area is of a size of 1,508 square kilometres and bounded on the north by the Ghana coastline, on the west by the maritime border with Cote d?Ivoire, ?on the south by the deep water Tano block ?and on the east by the West Cape Three Points Block.

A number of oil and gas discoveries are located within the area. They include the North Tano oil and gas field; the CTS-IX gas discovery; the NWT-1X heavy oil discovery; the Tano discovery and the Tano fields.

With regard to the exploration history of the contract area, ?the basin was covered by different vintages of two dimension seismic data totalling about 18,000 line kilometres.

However, ?only 1,160 line kilometres lie within the area, with an average grid of about five kilometres by seven kilometres.

Committee chairmanMoving the motion for the adoption of the report of the Parliamentary Select Committee on Mines and Energy, the Chairman of the committee, Dr Kwabena Donkor, said the GNPC had commissioned several studies in the area, for which there were technical reports. They included the Chemical Bank report, the Halliburton report and the GAPS report.

He said the initial period of the loan would last for two years.

At that stage, he said, the contractor would be required to reprocess existing two dimension and three dimension seismic data over the applied contract area and drill one exploration well.

The contractor?s minimum expenditure obligation, he said, was $30 million.

First and second extension period

Dr Donkor said the first extension period was to last for one and a half years during which the contractor would be required to drill one exploration well; conduct geological survey and geophysical studies; and to expend a minimum expenditure of $30 million.

The exploration operations, according to him, are required by the agreement to commence as soon as practicable latest by 60 days after ratification of the agreement by Parliament.RelinquishmentDr Donkor said the contractor would be required to relinquish 25 per cent of the original contract area at the end of the exploration period and twenty-five per cent of the remaining contract area after the first extension period.At the end of the second extension period, he said, the contractor would be required to relinquish the remaining ?contract area except for any discovery or development and production areas.Royalties and other entitlementsOn royalties and other entitlements under the agreement, ?Dr Donkor said Ghana was entitled to 12.5 per cent of the oil and 7.5 per cent of gas. The GNPC initial carried interest was 10 per cent, with an additional interest of 10 per cent. The government was entitled to a 35 per cent income tax.

Source: Daily Graphic

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