Business News of 2013-12-05

Parliament approves GNPC-AGM Petroleum deal

Parliament has ratified a petroleum exploration agreement between the Ghana National Petroleum Corporation (GNPC) and AGM Petroleum Ghana Limited.

The ratification grants the two parties the exclusive right and authority to carry out all petroleum exploration, development and production activities in the South Deepwater Tano Block (SDWT).

The ratification followed the approval of the Petroleum Agreement by Cabinet of and a review by the Parliamentary Select Committee on Mines, Energy and Petroleum.

The 3,482 km2 SDWT Block is located in deep to ultra-deep water part of the Tano basin, with water depth ranging from 2,000m to about 3,500m.

It is in close proximity to the Hess-operated Deepwater Tano – Cape Three Points block, where seven discoveries have been made, and the Vanco/Lukoil Deepwater Cape Three Points block.

The agreement incorporates a significant commercial interest accruing to GNPC, through its subsidiary, Exploration and Production Company Limited (Explorco).

The agreement gives Ghana through GNPC a stronger position in exploration and production activities than the country has held in past oil and gas agreements.

“The approval of the South Deepwater Tano Block Petroleum Agreement by the Parliament of Ghana marks a major milestone for AGM Petroleum and its partners. We look forward to working closely with GNPC to realise the potential of the block", said Mr Sverre Skogen, Chairman of AGM Petroleum.

He added that AGM Petroleum would partner communities along the locations where the exploration activities would take place to improve quality of life he people there.

"SDWT block represents an important opportunity for the people of Ghana and our Corporate Social Responsibility will underpin the way we conduct our business", Mr Skogen stated.

AGM Petroleum Ghana Ltd is owned by a Consortium, AGR Gibraltar, comprising of Minexco (OGG) Inc. ("Minexco"), AGR Energy AS ("AGR") and MED Songhai Developers Limited.

Minexco is a private oil and gas exploration company, which holds interest in oil and gas assets and having significant experience in managing and developing petroleum projects in West Africa. In Sierra Leone Minexco holds 90% equity interest and is operator of Block SL-07A-10.

Dr Martin Keeley, Acting Chief Executive of Minexco OGG Inc, said they “are very appreciative of the endorsement AGM Petroleum has received from the President of the Republic of Ghana, John Dramani Mahama, his Cabinet and now from the Members of Parliament, to explore and operate."