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Gov’t signs agreement with ExxonMobil

kencitymediagh
Jan 18, 2018
3 min read

Energy Minister Mr. Boakye Agyarko in a handshake with Madam Pamela Darwin; Vice President of ExxonMobil for Africa while Dr. KK Sarpong, CEO of GNPC looks on.

Government of Ghana has signed petroleum agreement with the American Oil & Gas giant, ExxonMobil to commence exploration activities at the Deepwater Cape Three Points (DWCTP) block.

The agreement which is subject to parliamentary ratification (approval) will require ExxonMobil to identify a local Ghanaian Company as a partner within a period of 200 days.

ExxonMobil which is the lead operator will hold 80% interest while the Ghana National Petroleum Corporation (GNPC) has 15% interest with the potentially local partner also expected to hold the remaining 5% stake.

The oil and gas giant is also expected to pay 10 percent royalty to the government of Ghana.

Speaking at the signing ceremony Energy Minister Boakye Agyarko, said ExxonMobil's presence in Ghana presents opportunities for considerable technology and skill transfer to Ghanaians through the structures provided for in the petroleum agreement.

Mr. Agyarko who described the agreement as the best deal compared to previous agreements signed under the Mills-Mahama administration said ExxonMobil's willingness to invest resources in undertaking exploration activities in Ghana also reflects the growth and attractiveness of the nation's oil and gas industry.

“The arrival of ExxonMobil sends a strong positive signal to potential investors around the world that Ghana is truly open for business and has existing commercial opportunities available in a well-secured maritime environment.

“We anticipate heightened activity in the coming years from both existing and potential projects in line with the Government’s strategic vision of building an industrialized nation powered by a robust energy sector,” Mr. Boakye Agyarko said.

Earlier, some industry analysts raised concern over the Energy Minister’s failure to subject the contract to competitive bidding as spelt out in the Petroleum Exploration and Production law.

But reacting to this in an interview with Oman News, the Energy Minister maintained that the negotiations started before the passage of the law, it couldn’t have taken retrospective effect.

“There were four issues which put the negotiations into abeyance; they bordered on the treatment of foreign exchange, tax issues, among others. When we came in 2017, the company approached us again and expressed their interest to revive the negotiations with the country but outlined the need to work around the issues so it could pave the way for their operations,” he stated.

“ExxonMobil started its program of operating in Ghana before the passage of the E&P law was passed in 2016 as such the law could not take a retrospective effect,” Mr. Agyarko added.

The Chief Executive Officer of Ghana National Petroleum Corporation (GNPC) Dr. K. K. Sarpong said his outfit is excited to work with ExxonMobil in the sense that the partnership will present great opportunity to GNPC to acquire requisite knowledge to assist it in its journey to become an upstream operator in the future

“GNPC is committed to ensuring a smooth implementation of the agreement once it is ratified by the Parliament of Ghana,” he said.

He told Oman News that he is optimistic the exploration activities will lead to job creation.

Asked as to how many jobs the petroleum exploration activities could create Dr. K. K. Sarpong could not give an exact figure but said “what I can tell you is that we have factored Local Content Participation in the agreement to sure that Ghanaians are given jobs to do.”