ExxonMobil picks GOIL as partner for oil drilling in Cape Three Points

Thu, 8 Nov 2018 Source: Goldstreet Business

The Ghana Oil Company Limited (GOIL) is set to become ExxonMobil’s local partner as it begins full-scale exploration for oil in Ghana’s West Cape Three Points in the Western Region.

This follows a non-objection from Energy Minister; John Peter Amewu after the world’s biggest deepwater oil company sent notice to the minister about partnering GOIL per the local content law of the country in its oil prospecting bid in the country.

“From the Ministry’s perspective and as our responsibility we have been notified by Exxon of their choice and we have accepted it and given the consent needed at the ministerial level”, Mr. Amewu stated.

GOIL remains the largest oil distributor in the country and the partnership where it holds 5 percent can help boost its crude oil production with eyes set even on oil refinery in the future according to an industry observer; Paa Kwesi Sekyi.

Sources say with ExxonMobil’s equipment to undertake deepwater exploration, their work will help the country drastically boost its oil production from the present 180,000 barrels per day to about 1.5 million in about three years, hitting a peak of about 3.5 million barrels per day afterwards.

Ghana at the beginning of the year signed a Petroleum Agreement with ExxonMobil which gave rights to the American oil giant to explore oil and gas in Ghana’s Deep Water Cape Three Points.

Under the deal, ExxonMobil is expected to carry out the work programme as operator and holds 80 per cent interest while the Ghana National Petroleum Corporation (GNPC), acting on behalf of the government holds 15 per cent interest.

The agreement, however, has to be ratified by parliament before Exxon can commence operations. Parliament has resumed sitting after a break and it is expected that the agreement will be considered to enable Exxon to start exploration this year or early next year.

The ExxonMobil deal is the first to be signed after the International Tribunal for the Laws of the Sea (ITLOS), in September last year, drew an ocean boundary favouring Ghana in a dispute with Cote d’Ivoire.

Goldstreet Business has also learnt that government will receive 10 percent of the gross production of crude as royalty. However, it can choose to collect this in cash.

The state shall also levy income tax at the rate of 35 percent under this petroleum agreement, pursuant to the Petroleum Income Tax Law indicating that the state will tax ExxonMobil 35 percent on profits made after drilling oil.

Source: Goldstreet Business