Ghana has signed a petroleum agreement with ExxonMobil which will give rights to the American oil giants to explore oil and gas in Ghana’s Deep Water Cape Three Points.
The agreement, which the Minister of Energy Boakye Agyarko has described as the best since Ghana discovered oil 10 years ago, will see the Ghana National Petroleum Corporation (GNPC) taking 15% of total proceeds accrued. ExxonMobil is entitled to 80% of the proceeds with the remaining 5% going to a yet-to-be-named indigenous company.
It is the first of such agreement signed after Ghana’s victory in the ITLOS boundary dispute with its neighbours Ivory Coast and saw captains in Ghana’s oil and gas sector coming together with the American giants to begin what both parties describe as a mutually beneficial relationship.
In 2017, Ghana struck oil in commercial quantities with the jubilee partners made up of Tullow and Kosmos holding majority shares of 22.9% and 30.88% respectively. Anadarko owned 30.88% with Sabre Oil and Gas taking 1.85%.
GNPC, which represented the interest of the Ghana government, had 10% with the EO Group, a Ghanaian owned company taking 3.5% of the shares.
On Thursday, January 18, 2018, a new partnership was signed between the GNPC and ExxonMobil for the exploration of Deep Water Cape Three Points which will see GNPC’s interest inching up 5% higher than it got in a similar agreement with the Jubilee partners.
“This agreement continues the trend of improving the country’s strategic partnerships with international companies. The terms of the agreement are amongst the best compared to other petroleum agreements signed in the past,” Boakye Agyarko said at the signing ceremony which saw the Vice President of ExxonMobil, Africa, Pamela Darwin, the US Ambassador to Ghana, Ron Jackson, CEO of GNPC, KK Sarpong and the CEO of the Petroleum Commission, Egbert Faibille Jnr all attending.
He said the new agreement is a testament to the Akufo-Addo government’s dynamism and commitment to transforming the economic fortunes of the nation.
Under a new comprehensive legal provision, Petroleum Exploration and Production Act 2016, (ACT 919) Boakye Agyarko said the agreement with ExxonMobil, marks the first implementation of the mandatory 15% carried interest held by GNPC in line with the provisions of Act 919.
Alongside royalties, taxes and other payments, the Minister believes the new partnership agreement will rake in significant financial benefits to the nation and a higher quantity of net oil than in a number of previous agreements.
He commended ExxonMobil for their commitment to building local capacity and leaving a lasting legacy in the country.
The Vice President for ExxonMobil, Africa, Pamela Darwin said her company is glad to share their technological expertise with the country and the local community in particular.
“It is the beginning of a long-term partnership between the parties. We are super excited to be here,” she stated.
Touting the credentials of ExxonMobil, Darwin said the company has operated in the Africa region for over 100 years with an incredible track record and hoped the marriage with Ghana will not be any different.
CEO of GNPC KK Sarpong described the new agreement as a “significant milestone” in the growth of Ghana’s oil and gas industry.
Touching on how different this agreement is to others signed in the past, Mr Sarpong said the development loan agreement and the default loan agreement is sure to address the shortcomings identified in previous agreements.
“These innovations are aimed at securing GNPC’s financing arrangements during the development to give comfort to the contractor party,” he explained.
In line with the legal provisions, Dr Sarpong said an indigenous company with 5% stake will be named before the agreement is ratified by Parliament.
The signing ceremony was attended by the President of the Western Region House of Chiefs, Ogyeahoho Yaw Gyebi, in whose region the exploration site, Tano Basin is sited, legal teams of the parties, members of the Mines and Energy Committee of Parliament.