Business News of 2013-12-05

Parliament ratifies South Deepwater Tano Block agreement

Parliament has ratified the petroleum agreement between the government of Ghana, the Ghana National Petroleum Corporation (GNPC), GNPC Exploration and Production Company Limited (Explorco) and AGM Petroleum Ghana Limited, to explore and operate the South Deepwater Tano Block (SDWT), offshore Ghana.

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

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

The SDWT Block of 3,482 km2 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, which has a discovery.

The agreement incorporates a significant commercial interest accruing to GNPC, through its subsidiary, Explorco.

This adds to GNPC’s hitherto normal Initial and Additional-Participation interest, making it more commercial.

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

The new strategy is much more rewarding as it will give Ghana a larger share of resources in the event of a discovery than under any existing agreement.

Mr Sverre Skogen, Chairman of AGM Petroleum, said: “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 realize the potential of the block. The SDWT block represents an important opportunity for the people of Ghana and Corporate Social Responsibility will underpin the way we conduct our business.”

According to him, his outfit is “committed to partnering with our communities to improve their quality of life. We now look forward to bringing our collective experience in deep water exploration and moving forward with a plan to fulfill the agreed work programme.”

Dr Martin Keeley, Acting Chief Executive of Minexco OGG Inc, added: “we 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 the SDWT block. We look forward to building upon our relationship.”

Mr. Alex Mould, Chief Executive of GNPC, said: “GNPC is thrilled about the ratification of the agreement by Parliament. Not only will this agreement increase the share of the resources and net revenues that would accrue to Ghana, but also makes GNPC a Joint Operator for the first time.”

He described the new agreement as a “landmark achievement and presents a shift-in-paradigm opportunity for GNPC to realise its goal of becoming a world-class National Oil Company. The agreement aligns with GNPC’s overarching goal of becoming a ‘stand-alone’ operator in seven years and a world-class operator in 15 years, launched in 2012.”