Mr. Boakye Agyarko, the Minister of Energy, says government has signed an oil exploration contract with the ExxonMobil Company to explore for oil in the Deeperwater Cape Three Points Oilfield because it has the capacity to deliver.
He said government’s policy for the upstream oil industry is to undertake aggressive exploration by incorporating and attracting the right partners to conduct operations to serve as a catalyst for economic growth.
“That informed government’s decision to opt for direct negotiation with ExxonMobil as opposed to an open competitive tender, since most oil firms have challenges operating in water depths between 2,000 and 4,000 metres.
“The direct negotiation was the best way to go, considering that there are just a few oil companies in the world that have the wherewithal in terms of equipment and financing to undertake such ultra-deepwater exploration,’’ the minister explained.
Mr. Agyarko made the remarks at the Sixth Edition of the Ghana Economic Outlook and Business Strategy Conference in Accra on Wednesday, on the theme ‘10 years of Oil and Gas: Challenges and Prospects’.
The forum was organised by the Africa Business Media Network, publisher of the Ghana Business and Finance Magazine, and brought together industry players including regulators, service providers, operators, civil society organisations and government officials.
The event is intended to offer a platform for stakeholders in the oil and gas industry to deliberate on the successes, challenges and prospects of the sector, and chart the way forward.
Mr. Agyarko noted that the agreement with ExxonMobil will offer Ghana an opportunity to accelerate exploration activity with a view to making more discoveries and increasing the reserve replacement rate.
“We will continue to develop mechanisms that enable us to attract partners of this calibre into the country, to further de-risk the ultra-deepwater potential and benefit from cutting-edge technology,’’ he assured.
He said the country still has a large and relatively unexplored sedimentary basin with huge oil and gas potential; out of the total offshore area of about 256,000 square kilometres, only 50 percent of it is licenced for exploration.
The minister assured Ghanaians that the deal with the American oil firm is in the nation’s best interests, and urged the citizenry to be patient while awaiting Parliament’s ratification.
In the deal, ExxonMobil holds 80 percent interest, while the Ghana National Petroleum Corporation holds a 15 percent carried interest and the remaining five percent will be assigned by ExxonMobil to a local partner of its choice.
Currently, there are 17 active exploration and production agreements signed between the government of Ghana and other international and local oil firms to explore petroleum resources.
Mr. Agyarko said his outfit is working toward completing the tie-in of the Ghana Gas pipeline and West African Pipeline and associated modification work at both Regulation and Metering Stations (R&M) in Takoradi and Tema.
Dr. Yaw Osei Akoto, Board Chairman of the Africa Business Media, in his welcome address said the forum is playing a significant role in the national discourse of the nation’s economic development.
He said it provides a platform for constructive interaction between government officials, players in the oil and gas industry, regulators and civil society organisations, and he believes the event will go a long way to better the nation’s economic fortunes.