Horns are locked on Saltpond

Houston outfit Lushann-Eternit has come under acute pressure from Ghana's Ministry of Energy to redefine its joint-venture agreement with Ghana National Petroleum Corporation to redevelop the Saltpond oil and gas field.

Saltpond Offshore Producing (SOP) is currently designated as operator with equity held 60-40 in favour of Lushann, but the government now wants a direct say in operations under a so-called "tripartite" arrangement, senior management sources revealed.

Ministry officials want to rejig the accord to reflect the 90-10 split common to Ghana's exploration concessions, but where Lushann would pay 3% royalties, 20% corporation tax and acreage rental for the area beyond the Saltpond field itself.

Controversially, the government insists on appointing the operating company's board chairman, which is being opposed by Lushann chief Kwesi Sintim-Aboagye.

Sintim presently chairs SOP on the basis that Lushann has brought in an estimated $10 million to date from financial backer Continental Trust Bank of Nigeria, plus the know-how to bring the field on stream. One benefit to Lushann would be clearer access to surrounding exploration acreage, though this was not part of its gameplan.

Under a compromise deal now before the Cabinet, Lushann would carry GNPC for $1.2 million and the parastatal would effectively buy the jack-up rig Mr Louie -- currently serving as a production platform -- for $500,000 by way of securing equity participation in the project.