Business News of 2014-03-28

Parliament ratifiesTano water petroleum agreement

Parliament has ratified the Petroleum Agreement in respect of the Expanded Shallow Water Tano (ESWT) Block, offshore Ghana's coast.

The agreement is sanctioned by the Government of Ghana, the Ghana National Petroleum Corporation (GNPC), Camac Energy Ghana Limited, Base Energy Ghana Limited and GNPC Exploration and Production Company Limited (Explorco).

In a press statement issues on March 26, 2014 and signed by Eric Pwadura Ag. Head, Corporate Affairs, GNPC, noted that the ratification on March 21, 2014, followed, the approval of the Agreement by the Cabinet of the Government of Ghana and a review by the Parliamentary Select Committee on Mines, Energy and Petroleum.

It therefore follows that Camac Energy Ghana Ltd, Base Energy Ghana Ltd, and GNPC Exploration and Production Company Limited will form the Contractor Group in the Agreement.

The ratification grants the parties involved, the exclusive right and authority to carry out petroleum exploration, development and production activities in the Expanded Shallow Water Tano Block.

The ESWT block covers an area of 1,508 km2. It is bounded on the north by the Ghana Coastline, on the west by the Maritime Border with Cote D’Ivoire, on the south by the Deepwater Tano Block, which hosts the TEN Field Complex, and on the east by the West Cape Three Points Block, which hosts the Teak-Akasa discoveries.

The Block hosts a number of discoveries and fields, which include the North Tano oil & gas field (1980); the CTS-1X gas discovery (1989), the NWT-1X heavy oil discovery (1989), and West Tano heavy oil discovery (1999), by GNPC and its partners; and the South Tano fields.

Camac Energy holds 60% of the contractor interest; Base Energy holds 15%; and GNPC’s Explorco holds the remaining 25%. GNPC has a 10% Initial Carried Interest and may elect to have additional paying interest of 10% in the event of discovery of oil in commercial quantities.

The terms of this Petroleum Agreement satisfies the objectives of the State, with improved fiscal terms for the State and GNPC, over previous agreements in similar water depths and in the vicinity of this block.

For their work programme, the contractors will evaluate 3D seismic data, geological and well data from the discovered fields to determine, within nine months, the commerciality of the three discoveries. They have also committed to conducting further exploration activities during the exploration period, with the view to increasing the reserves of the block.

"The Tano Basin offers the kind of high-potential, high-reward oil prospects that we believe will enable us to build value and success through the drill-bit,” Dr. Kase L. Lawal, CAMAC Energy Chairman and Chief Executive Officer noted, adding, “with the discovery and partners already in place, it is a highly prospective region of West Africa.”

Additionally, Mr. Lawal expressed satisfaction in the partnership and expect a cordial relationship in undertaking the project.

“We are pleased to be partnering with the Ghana National Petroleum Corporation, and Base Energy to pursue this exploration and development opportunity, and we look forward to developing a long-term relationship with the Ghanaian government as we carry out the work program,” he noted.

In his comments, Base Energy Group Manager in-charge of Business Development, Kevin Dadzie said: “This award is a significant milestone for us and we are very grateful for Government’s efforts at encouraging local participation in our oil industry.

"We will continue to work closely with our partners, GNPC and Camac, to deliver on our commitments to the country and help to build a strong local oil and gas industry in Ghana. Local participation ensures that value is retained in Ghana for Ghanaians".

On his part, GNPC’s Acting Chief Executive, Alex Mould noted that “GNPC’s E&P activities in the ESWT area in the 1990s greatly enriched our knowledge of the basin and in doing that accumulated valuable data, which will go a long way to assist the current partnership in our attempt to unlock the field’s potential and deliver value to our shareholders.

"The joint operating concept would greatly assist in furthering the Corporation’s vision of becoming a stand-alone operator in the not too distant future.

“Successful exploration and production activities would, while building GNPC’s Operatorship capacity, also deliver additional oil and gas reserves to the nation, and create business opportunities for Ghanaians”.

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