Ghana signs new agreement for Cape Three Points Deepwater block

ACCRA, Ghana -- The Government of the Republic of Ghana, the Ghana National Petroleum Corp. (GNPC), Vanco Ghana, and LUKOIL Overseas Ghana have signed a new petroleum agreement covering the Cape Three Points deepwater block.

The agreement will replace the existing petroleum agreement that expires at the end of April. The new agreement provides Vanco and LUKOIL with the opportunity to continue the exploration of the area, during which new 3D seismic and additional drilling activities are planned. The new agreement also provides GNPC and the government of Ghana with significant commercial benefits, including higher royalty and increased GNPC participation. The new Petroleum Agreement also gives ownership of associated gas to the State.

The Cape Three Points deepwater block encompasses an area of 5,146 sq km (1,987 sq mi) in water depths ranging from 200 to 3,000 m (656 to 9,843 ft) in the Tano basin. Vanco (Operator) holds a 28.34% participating interest in the Cape Three Points Deepwater block with LUKOIL holding a 56.66% participating interest. GNPC, the state oil company, holds a 15% carried interest, with the option to acquire up to an additional 5% in any commercial discovery.

The new agreement comes as the deepwater drillship Aban Abraham departs Cape Town, South Africa after completing final retrofit operations to enable the unit to drill in water depths of up to 2,000 m (6,562 ft). The Aban Abraham will mobilize to Ghana to commence the Dzata-1 exploratory well by the end of April.

Situated in 1,874 m (6,148 ft) water depth, the Dzata prospect is a large anticlinal structure with numerous Upper and Lower Cretaceous potential reservoir horizons and distinct direct hydrocarbon indicators, including flat spots and a gas chimney, according to the companies. The well will be drilled to a total depth of approximately 4,786 m (15,702 ft), or 2,912 m (9,554 ft) below the mud line.