ACCRA, Ghana –The Ghana parliament has ratified a petroleum agreement among the government of Ghana and five organizations for the exploration of oil in the Expanded Shallow Water Tano block, the Ghana News Agency reports.
The organizations include the Ghana National Petroleum Corp. (GNPC), CAMAC Energy Ghana Ltd., Base Energy Ghana Ltd., and the GNPC Exploration and Production Co. Ltd.
As per the agreement, if a commercial discovery of oil is made in the Expanded Shallow Water Tano block, the GNPC, CAMAC Energy Ghana Ltd., and Base Energy Ghana Ltd. who would be referred to as the contractor would prospect for oil in the block for 25 years. If no commercial discovery of oil is made after seven years, the contract expires.
The contractor is required to reprocess existing 2D and 3D seismic data over the applied contract area and to drill one exploration well. Operations are to begin no later than 60 days after this ratification.
Under the agreement, the contractor would relinquish 25% of the original contract area at the end of the exploration period and 25% of the remaining contract area after the first extension period.
Ghana is entitled to 12.5% of oil and 7.5% of gas as royalties. The GNPC has an initial carried interest of 10%, with an additional interest of 10%, and the government also has an entitlement of 35% income tax.
The prospect area, bounded on the north by the Ghana coastline and on the west by the maritime border with Cote d’Ivoire, on the south by the Deepwater Tano block and on the east by the cape Three Points block, spans some 1,508 sq km (582 sq mi).