Exxon Mobil and the Ghanaian government have inked a deal which gives the oil major an exploration and production license in a block known as Deepwater Cape Three Points. Ghana’s parliament will however have to ratify the agreement before it can go into effect. The two parties negotiated directly over the block that had previously been relinquished by Lukoil and Vanco Energy.
Since 2009 Exxon Mobil has been trying to get into the upstream oil sector of Ghana. In the Deepwater block the oil major will have the majority ownership stake of 80% while the Ghanaian government via the Ghana National Petroleum Corporation will have a 15% interest. A 5% stake will be awarded to a domestic firm since the new exploration and production of petroleum law in Ghana requires a local partner must have an ownership stake.
The size of the block is approximately over 630,000 acres and the water depths range between 1,550 meters and 2,850 meters. Deepwater Cape Three Points is located slightly over 90 kilometers from Ghana’s coast.According to Ghana’s Energy Minister, Boakye Kyeremateng Agyarko, the inking of the agreement was proof of the government’s commitment to transforming the country economic using oil resources.
In the event of non-discovery in the course of the initial two years, the agreement will be extended by another 12 months. Ghana, which has traditionally been known for gold and cocoa exports started commercial oil production eight years ago in the country’s flagship Jubilee reserves. Other companies that are conducting drilling in the country include Kosmos Energy and Tullow Oil.
The deal with Exxon Mobil is the first one to be made following the drawing of an ocean boundary last year in September by the International Tribunal for the Law of the Sea, a move which favored Ghana in the dispute with Ivory Coast.
Papua New Guinea
Exxon Mobil’s winning of exploration and production rights in Ghana comes in the wake of the oil major confirming high quality hydrocarbon resources in Papua New Guinea. This came after drilling an onshore well in the Asia Pacific country’s Western province.
“We are currently evaluating the well results and together with our co-venture partners will assess the P’nyang field resource potential and development pathway. We will work with the government of Papua New Guinea as we undertake this work,” said ExxonMobil Develop Co’s president, Liam Mallon, in a statement.
In the P’nyang field, Exxon Mobil’s interest is 49% while Oil Search, a drilling operator has a 38.5% interest. The remaining stake is owned by JX Nippon.