Gov’t gives details on petroleum agreement with ExxonMobil

Gov’t gives details on petroleum agreement with ExxonMobil
Source: Ghana| JoyBusiness
Date: 16-01-2018 Time: 01:01:46:pm
Share

Government has been giving details on what went into an agreement between Ghana and Oil exploration giant ExxonMobil.

This follows criticism by some civil society groups on why government did not open the oil block it extended to Exxon Mobil to public tender.

According to government it took the decision not to open the deep water Cape Three Point block to public tender because the nature of the area required an oil exploration firm that has the most sophisticated technology and the financial muscle to prospect for oil in commercial quantities.

This was after two other global firms had some challenges in exploring for oil because of the nature of the Deep Water Cape Three Point Block.

On April 30, 2015, the Government of the Republic of Ghana, represented by then Minister for Petroleum and Ghana National Petroleum Corporation (GNPC) entered into Memorandum of Understanding (MoU) with ExxonMobil Exploration and Production Ghana (Venture) Limited for acquisition of Petroleum Exploration and Production rights over the DWCTP Block.

Pursuant to the terms of the MoU, the parties agreed to negotiate in good faith a Petroleum Agreement, with an exclusivity period of seven months.

The Ministry of Energy in a publication in the Daily Graphic said, “The reasons for inviting ExxonMobil for direct negotiation are based on the value proposition for Ghana.”

Critical success factor: In any Petroleum Basin such as Ghana is the attraction and retention of International Oil Company (IOC) such as ExxonMobil with the relevant technical expertise and sound financial capability with access to both capital and project finance.

Ghana’s offshore basin falls geologically within West Africa transform margin, which is highly fragmented and has much of its potential in Ultra Deep Water. The fragmented nature requires that in order to fully understand the transform margin, IOCs need to take positions in multiple countries, and on both sides of the Atlantic (West Africa and South America were connected in geological time).

For instance exploration success in Guyana is relevant to better understanding Ghana’s geology, therefore ExxonMobil exploration success in Payara license in Guyana will positively impact exploration success in DWCTP Block.

The setting in Ultra Deep Water as results in high drilling cost, therefore increased emphasis on full regional technical understanding prior to drilling is essential, therefore ExxonMobil’s regional geological understanding will reduce drilling cost.

Ultra-Deep Water exploitation is beyond the reach of current technology, therefore IOCs with strong Research and Development capability such as ExxonMobil are needed to develop future technology to unlock UDW exploitation potential.

Exploration in Ghana’s Tano Basin to date has led to the discovery of one petroleum system, Jubilee, and all subsequent discoveries form part of the same petroleum system. A thorough basin-wide approach is needed to discover Ghana’s other petroleum systems that will replace oil production from the current petroleum system (Jubilee/TEN/Sankofa etc), which will enter decline in the next five (5) years.

The majority of recent awarded acreage (2014) is targeting minor/smaller discoveries within existing petroleum system.Ghana is one of the few African oil producer countries without the presence of a super major and ExxonMobil entrance into Ghana would validate the country’s hydrocarbon potential. Government’s policy is, therefore, to bring into Ghana a Super Major like ExxonMobil.

The Deepwater Cape Three Points (DWCTP) Block has been relinquished twice by Vanco Energy and Lukoil which has increased the risk profile of the DWCTP Block.

The DWCTP Block lies in water depth ranging between 2,000 to 4,000 meters and is located approximately 150km offshore Ghana.

It is one of the ultra-deepwater blocks which severely tests the limits of modern technology and would take Research and Development to optionally develop and exploit any discovered resources.


Have your say  


More Business Headlines


What others are reading
Messi returns but Argentina lose 3-1 to Venezuela
Portugal draw blank against Ukraine on Ronaldo's return
Sterling bags hat-trick as England thrash Czech Republic