Ghana has signed a petroleum agreement with ExxonMobil in which the Country stands to gain an automatic 15% of total proceeds accrued.
The Petroleum Agreement grants the American oil giants a license to explore and produce hydrocarbons in the country’s basin (Ghana’s Deep Water Cape Three Points).
The Minister of Energy, Boakye Agyarko representing Government of Ghana in the signing ceremony described as amongst the best since Ghana discovered oil 10 years ago.
The Petroleum Agreement will see the Ghana National Petroleum Corporation (GNPC) taking 15% of total proceeds accrued. ExxonMobil is entitled to 80% of the proceeds with the remaining 5% going to a yet-to-be-named indigenous company.
It is the first of such agreement signed after Ghana’s victory in the ITLOS boundary dispute with its neighbors Ivory Coast and saw captains in Ghana’s oil and gas sector coming together with the American giants to begin what both parties describe as a mutually beneficial relationship.
He said the new agreement is a testament to the Akufo-Addo government’s dynamism and commitment to transforming the economic fortunes of the nation.
The comprehensive legal provisions which have been promulgated and refined since the commercial discovery include the Petroleum (Exploration and Production) Act, 2016 (Act 919) and the Income Tax Act, 2015 (Act 896). The agreements mark the first implementation of the mandatory 15% carried interest held by GNPC in line with the provision of (Act 919).Alongside royalties, taxes and other payments bringing significant financial benefits to the nation and a higher quantity of net oil than in a number of previous agreements.
Alongside royalties, taxes and other payments, the Minister believes the new partnership agreement will rake in significant financial benefits to the nation and a higher quantity of net oil than in a number of previous agreements.
He commended ExxonMobil for their commitment to building local capacity and leaving a lasting legacy in the country.
The Vice President for ExxonMobil, Africa, Pamela Darwin said her company is glad to share their technological expertise with the country and the local community in particular.
“It is the beginning of a long-term partnership between the parties. We are super excited to be here,” she stated.
Touting the credentials of ExxonMobil, Darwin said the company has operated in the Africa region for over 100 years with an incredible track record and hoped the marriage with Ghana will not be any different.
CEO of GNPC KK Sarpong described the new agreement as a “significant milestone” in the growth of Ghana’s oil and gas industry.
Touching on how different this agreement is to others signed in the past, Mr Sarpong said the development loan agreement and the default loan agreement is sure to address the shortcomings identified in previous agreements.
“These innovations are aimed at securing GNPC’s financing arrangements during the development to give comfort to the contractor party,” he explained.
In line with the legal provisions, Dr Sarpong said an indigenous company with 5% stake will be named before the agreement is ratified by Parliament.
The signing ceremony was attended by the President of the Western Region House of Chiefs, Ogyeahoho Yaw Gyebi, in whose region the exploration site, Tano Basin is sited, legal teams of the parties, members of the Mines and Energy Committee of Parliament.
Also present were the US Ambassador to Ghana, Rob Jackson, Board Chairman of GNPC, Freddy Blay, Board Members of GNPC, the CEO of the Petroleum Commission, Egbert Faibille Jnr among other dignitaries.