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ExxonMobil yet to reach Parliament for approval

  • SOURCE: citibusinessnews.com | Editor
  • Citi Business News is learning that government is yet to submit the ExxonMobil agreement to Parliament for ratification, three weeks after the resumption of the House.

    This is however expected to be carried out before the operators could commence exploration activities at the oilfields.

    The submission of the agreement to Parliament is in fulfillment of Article 268 subsection 1 of the constitution which makes it mandatory for any agreement on the exploitation of Ghana’s mineral resources, to be approved by Parliament.

    “Any transaction, contract or undertaking involving the grant of a right or concession by or on behalf of any person including the Government of Ghana, to any other person or body of persons howsoever described, for the exploitation of any mineral, water or other natural resource of Ghana made or entered into after the coming into force of this Constitution shall be subject to ratification by Parliament,” the constitution reads.

    Earlier indication from persons close to the agreement suggested that the agreement will be laid within the first few weeks upon resumption of activities in the Legislature.

    But Citi Business News understands that is yet to happen since a local partner is yet to sign to complete the whole process.

    The said local partner is expected to control some 5 percent stake in the entity.

    It is unclear what the actual investment figures are but the deal is estimated at some 200 million dollars.

    If that is the case, then the local partner to be picked would be expected to cough up at least 10,000,000 dollars as equity.

    Citi Business News is however learning that the conditions put forward by the ExxonMobil group in terms of capital requirement, the balance sheet of the preferred company as well as human capital strength may have contributed to the delays.

    The total Ghanaian ownership in the ExxonMobil operation is estimated at thirty percent.

    This comprises 10 percent royalty to the government of Ghana while the GNPC owns 15 percent stake as Carried and Participation Interest.

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