Norwegian oil company, AGM has described a revised petroleum agreement it has with Ghana as a good deal that will enable the country benefit from exploration of oil.
Parliament last week ratified the revised petroleum agreement for the South Deepwater Tano (SDWT) block which is over 3.5 kilometres below sea level.
By the approval, AGM is now permitted to start oil exploration in the block.
Prior to this, there have been several calls to review the agreement to benefit Ghana’s interest in the block.
Per the new agreement, AGM which is the operator will hold 80% participating interest.
The other partners are the Ghana National Petroleum Corporation (GNPC), which will control 15% carried interest, and then a local partner, Quad Energy, with a 5% paying interest.
A statement from AGM said “Ghana will be the main beneficiary of the profits from any oil produced in the block”.
According to AGM, the revised agreement now makes the development of the block sufficiently attractive for international investors and operators in the industry.
Comparing the revised agreement to the previous one, AGM argued that the terms in the revised agreement are more favourable to Ghana.
“AGM is looking forward to working with its partners, suppliers and, not least, the Ghana National Petroleum Corporation (GNPC), the Petroleum Commission, the Ministry of Energy and other important stakeholders to conduct operations in a safe and transparent manner”.
The statement said the Petroleum Agreement ratified by Parliament on 3rd May 2019, gives a fiscal take to Ghana, which is substantially above the international deepwater average of approximately 55%.
The company was hopeful it will have successful exploration and develop the resources on behalf of and together with the Ghanaian people, the statement said adding that “If the exploration is not successful, the operator bears all the financial risk and burden”.
“We are grateful for the opportunity given to us to explore for oil and gas in the SDWT block together with our partners. We hope and believe this will be the beginning of a long and prosperous journey together with the Ghanaian people that will create wealth and opportunity for generations to come,” said Atle Andresen,
CEO of AGM. David Adomakoh, Director of Quad Energy added: “We look forward to a fruitful long-term relationship with AGM and are committed to working together to unlock the potential of the SDWT block. This will give us a unique opportunity to maximise the participation of our local oil and gas services companies.”