Ghana could lose $7b in new oil discovery – Minority

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The Minority in Parliament has raised alarm that Ghana could lose a staggering $7 billion in the latest oil discovery by Hess/Aker petroleum.

According to the minority, the discovery which is estimated to be around $30 billion in today’s crude oil price, cannot be deemed to be part of the expired exploration agreement signed between Ghana and Aker petroleum.

“The Minority Caucus in Parliament has learnt with shock, certain developments relating to the recent oil discovery in the Deepwater Tano Cape Three Point (DWT/CTP) Block which is set to lead to the loss of a whopping $7.2 billion to the State.

“On 14th February 2019, the Ministry of Finance (MoF) announced what it described as the biggest oil find in Africa, of 450 – 550 million barrels with potential reserves of nearly 1 billion barrels of oil equivalent. A find which is estimated to be at least $30 billion at today’s crude oil price of $65 per barrel.

“The Minority Caucus is extremely concerned that the Government of Ghana (GoG), and the Ghana National Petroleum Corporation have failed to clarify the ownership of this latest discovery, and appears to be treating it as part of the original Hess discovery,” the Minority said in a statement.

The statement added: “Clarity is crucial in this matter because a new Petroleum Agreement (PA) for any new Exploration leading to a new discovery will give the State much enhanced fiscal terms, including at least a 10% Royalty for GoG, plus a minimum of 15% Carried Interest as stipulated by Law; whereas the existing Hess/Aker Petroleum Agreement gives Ghana 4% in Royalty, and 10% Carried Interest, representing a minimum difference of 11% in oil production and revenue that would have accrued to the State”.

The Minority is therefore demanding that “that the Ministry of Energy (MoE), as a matter of urgency; Clarifies the ownership position in relation to these new oil discoveries
– Take steps to ensure the drafting and signing of a new Petroleum Agreement as demanded by Act 919 for these new discoveries
– Apprise Parliament of the relevant information relating to these discoveries, including but not limited to all the technical, legal, and commercial details
Additionally, the Minority demand that the Ministry of Energy confirm if Government of Ghana, directly or indirectly through the Ghana National Petroleum Corporation, exercised the option to acquire the 10% equity interest that was negotiated and agreed with Hess as one of the conditions for the Lukoil farm-in; and which Parliament approved such spend in GNPC’s budget”.

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