The agreement signed with Exxonmobil of America in respect of the Deepwater Cape Three Points oil block is among the best compared to other agreements signed in the past, as it is a culmination of lessons learnt in the ten years of the sector, Energy Minister Boakye Agyarko, has said.
Signed yesterday and awaiting parliamentary approval, the agreement gives Exxonmobil exploration and production rights for the block and marks the first implementation of the mandatory 15 percent carried interest under the new petroleum law, Act 919, held by the Ghana National Petroleum Corporation – alongside royalties, taxes and other payments.
Exxonmobil holds 80 percent interest, while a yet to be disclosed indigenous investor holds 5 percent interest as the law demands.
Government has given a number of reasons as to why it went into direct negotiations with Exxonmobil, instead of opening the block to tender which the law gives preference to.
The Deepwater Cape Three Points (DWCTP) Block has been relinquished twice by Vanco Energy and Lukoil, which government says has increased its risk profile.
Besides, it argues that the DWCTP is one of the ultra-deep-water blocks; and that aside from Exxonmobil, not many oil companies have the technological and technical wherewithal to work that deep beneath the ocean.
“Ultra–Deep Water exploitation is beyond the reach of current technology, therefore IOCs with strong Research and Development capability such as ExxonMobil are needed to develop future technology to unlock UDW exploitation potential.”
At the signing in Accra, the energy minister said: “Once parliament ratifies this agreement, we will look forward to its swift implementation”.
Exxonmobil, represented by its Africa region Vice President, Pamela Darwin, said exploration activities, including acquisition of seismic data and analysis “are expected to commence later in 2018”.
The block lies in water depths ranging between 2,000 to 4,000 metres, measuring approximately 366,000 acres (1,482 square kilometres), and is located approximately 150 km offshore Ghana.
“The addition of this block reaffirms Exxonmobil’s commitment to pursuing high-quality projects in areas with large resource potential,” said the company’s president, Steve Greenlee. “We are excited to partner the government of Ghana as we employ our significant upstream experience and technological expertise in assessing the exploration opportunities in this block.”
Exxonmobil is touted as the world’s largest Integrated International Oil Company, with daily production of 3.921 million BOE (barrels of oil equivalent) and a revenue stream of US$218.6billion as at 2016.