Ghana: Petroleum Commission Declares 2020 Action Year Against Indigenous Companies Fronting For Foreign Oil Firms

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Ghana’s upstream petroleum regulator, Petroleum Commission, has served notice that it will next year begin enforcement of relevant laws to revoke operating permits of indigenous companies that front for foreign oil firms.  The Acting CEO of Petroleum Commission, Mr. Egbert Faibille Jnr revealed the commission’s plan in an  address at the opening of the 6th Local Content Conference and Exhibition in Takoradi, in the western part of the West African nation. According to myjoyonline.com which covered the event, Mr Faibille was hopeful that the era of indigenous companies fronting for foreign firms is about to end.  The enforcement will include tax assessments based on equity participation and profit-sharing, then revocation of operating permits and non-issuance of permits to indigenous companies and their partners if it is proven after a thorough investigation that they have engaged in fronting.  “Let me, therefore, use this opportunity to advise all those engaged in fronting to put a stop to it immediately. Ghana needs an indigenous pool of experienced and highly skilled upstream service companies willing to prioritize, adapt and compete prudently in the industry”, Mr Faibille said. Deputy Energy Minister Mohammed Amin Adam officially opened the Conference and Exhibition. Over 60 companies are participating in the exhibition. It is also hosting international delegates from Brazil, Nigeria, Trinidad and Tobago, Uganda and Mozambique to share their experiences and expertise with Ghana.     Source: www.energynewsafrica.com

Yinson In $800M FPSO Refinancing Deal

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Malaysian FPSO provider Yinson has struck an $800 million refinancing deal with 13 banks. Yinson said Tuesday the agreement was reached with both global and local banks to refinance its FPSO John Ayekum Kufuor. The FPSO is currently operating in OCTP Block, offshore Ghana, chartered by Italy’s Eni. “The refinancing allows Yinson to enjoy lower interest rates whilst freeing up capital to be invested in future projects,” Yinson said in a report by Offshoreenergytoday.com. Yinson signed the refinancing agreement with the following banks: CIMB Bank, Clifford Capital, Crédit Industriel et Commercial, DBS Bank, Korea Development Bank, Maybank Investment Bank, MUFG Bank, Natixis, Oversea-Chinese Banking Corporation, Societe Generale, Sumitomo Mitsui Banking Corporation, Standard Chartered, United Overseas Bank. Yinson Group Chief Strategy Officer Daniel Bong said that the deal was oversubscribed by over 45% – an indication of the strong support Yinson was receiving from the financial community. “This deal is an innovative capital velocity exercise that we believe will further improve the returns of the project. The fact that this deal is oversubscribed speaks of the confidence that the banking market has in Yinson, to maintain high uptime and the quality of our asset for the next 12 years,” he said.      

Ghana: Africa Energy Chamber Calls On Gov’t To Support Springfield E&P

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The Akufo-Addo administration in the Republic of Ghana has been urged to give its full backing to Springfield Exploration & Production (SEP) by providing the firm with incentives to enable it fully develop the deepwater block where it recently made a significant oil discovery. The Africa Energy Chamber, which made the call, said: “We believe such a development will create jobs for Ghanaians, and opportunities for Ghanaian companies and entrepreneurs to service one of West Africa’s largest upcoming offshore development.” AEC’s comment follows announcement by Springfield Exploration & Production (SEP) that it had made significant crude oil discovery at its deepwater oil block in the West African nation. A statement from Africa Energy Chamber and copied to energynesafrica.com said: “Such a discovery has the potential to spur considerable economic growth for Ghana, already the world’s fastest-growing economy this year. “What a year for Africa’s exploration!” Nj Ayuk, Executive Chairman of the African Energy Chamber and CEO at the Centurion Law Group declared in the statement. “Springfield and its CEO Kevin Okyere represent the African spirit of defying unsurmountable odds and sticking to it when everyone counts you out,” he added. “Africa is a burning exploration frontier where the most significant oil & gas discoveries are being made not only by international explorers but by our own companies. The Ghana discovery is the result of efforts made by African entrepreneurs in a country where first discoveries were made only 12 years ago,” he concluded.   Source:www.energynewsafrica.com

TGS Expands Argentina Survey And Adds Second Shearwater Vessel

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Multi-client geoscience data provider TGS has decided to expand the Malvinas 3D multi-client seismic program offshore Argentina. The survey will now employ two Shearwater-owned vessels instead of only one.  It would be recalled that in September 2019, Shearwater was awarded a large survey in South America. At the time, the name of the client was left unknown. The company said the six-month project would be acquired by the Amazon Warrior vessel. Later, at the end of October, TGS said it would undertake a new 3D multi-client project in the Malvinas Basin offshore Argentina. TGS said the survey would employ one Shearwater vessel, with operations set to begin in the fourth quarter of 2019 and run until the second quarter of 2020. In a statement on Wednesday, Shearwater announced an expansion of the previously announced South America survey to two vessels and also confirmed this survey was for TGS in Argentina. Shearwater added that the additional phase was for five months bringing the total award to 11-vessel months. One of Shearwater’s high capacity seismic vessels will be used for the project, capable of deploying large streamer spreads in tough environments. “We are very pleased to see a second vessel added to the TGS Argentina program,” Irene Waage Basili, the CEO of Shearwater GeoServices said. “Market visibility for 2020 has increased significantly and clients are booking capacity earlier than in previous years.” In a separate statement on Wednesday, TGS said that the Malvinas 3D seismic survey would cover approximately 17,800 square kilometers of the highly prospective Malvinas Basin. This expansion represents a 10,500 square kilometer increase from the previously announced 7,300 square kilometers. TGS said that the initial products would be available in early 2021, with final products slated for H2 2021. The project is supported by industry funding. Kristian Johansen, CEO at TGS, commented, “We are delighted to announce the expansion of the Malvinas 3D project. The increased commitment from clients to fund new projects offshore Argentina demonstrates the value that E&Ps place in seismic as a vital tool to make informed drilling decisions.”

Ghana: We’re At Risk Of Higher Graduate Unemployment Rates In Future –Senyo Hosi

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The Chief Executive Officer of the Chamber of Bulk Oil Distribution Companies (CBOD), in the Republic of Ghana, Mr Senyo Hosi has called on the government to urgently commission the various public universities to undertake a thorough study on the impact of the 4th industrial revolution on the country’s Human Resource landscape. That, he said, would help to ascertain the necessary changes to the educational curriculum and build a system to ensure graduates are equipped with the skills they need to thrive in future. In his view, the emergence of the fourth industrial revolution that is expected to be dominated by artificial intelligence (AI), robotics, among other technologies would fast transform the business world, hence the need for urgent reforms in the educational sector to conform with the trends. According to modernghana.com, Mr Hosi, who was speaking at a forum organised by College of Humanities at the University of Cape Coast last Tuesday, expressed fear that the existing gap between academic institutions and industry could worsen in the near future considering the pace at which technology was modifying the world of work. To forestall such occurrences, Mr Hosi urged the various universities to constantly “review evolving trends and assess futuristic implications on industry and ensure education is positioned to be competent to meet the requirements of the present future.” “As a matter of policy, the University must commission annual tracer studies to assess the impact of their graduates and procure feedback from employers and managers as input for modifying or reaffirming educational strategy. “This should include competitive studies to evaluate the superiority of the graduate in the respective Universities. I believe this must be a requirement for the revalidation of their accreditation,” he further proposed. The 2017 Ghana Labour Force Survey Report commissioned by the Ghana Statistical Service (GSS) revealed that some 1.2 million persons from 15 years and older were unemployed, representing a total unemployment rate of 11.9%. It is estimated that there are more than a quarter of a million of unemployed graduates in the country, a situation which is largely blamed on failure on the part of academic intuitions to equip students with the needed employable skills particularly in the area of manufacturing and technology. Expressing worry about the trend, Mr Hosi urged universities to promote the engagement of experienced, innovative and proven corporate and public executives as part of their faculties. That, he noted, will ensure greater connection with industry and help sustain the relevance of the education offered by the academic institutions while facilitating student and the faculty’s ability to translate theory into practise. Mr Hosi also faulted the methods of teaching adopted by lecturers in the various universities and called for urgent review of the methods to ensure that students were imparted with the requisite knowledge and skills to meet the demands of employers. “It is unacceptable for university students to be examined using multiple-choice questions, which leave absolutely no room for critical thinking or creativity. It is unacceptable for lecturers to be reading out notes in class. It is unacceptable for lecturers to suppress dissenting views on theories or opinions, marking down students who dare to think creatively and not reproduce the notes of their lecturers,” he stressed. “Lecturers must also make it a point to give students copies of their marked scripts, so they learn from the grammatical and analytical errors they make. Otherwise, you will continue to breed students who grow and make a virtue out of their errors,” he added. He further admonished lecturers to serve as role models to their students and live exemplary lives to shape the attitudes of the students to become responsible employees and business owners after school.  

Yemen: Houthi Rebels Detain Vessel Towing South Korean Oil Rig

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Yemeni rebel group Houthi has reportedly hijacked a Saudi vessel towing a South Korean drilling rig off the Island Karaman in the Red Sea. According to the Saudi Press Agency, as cited by the international media, the Houthis on Sunday detained the Rabigh 3 tugboat which was towing an offshore drilling rig owned by a South Korean company. It is worth noting that there are conflicting reports on the number and the types of the vessels detained as the Yemeni foreign ministry said “a South Korean ship and two accompanying vessels were detained,” while one can also find reports claiming “a dredge barge” and tugs were detained. Reuters, CNN and Al Jazeera have all reported that the Houthis seized a vessel towing a South Korean drilling rig. The Saudi news agency has cited the Yemeni Foreign Minister Mohammed Al-Hadrami who condemned “the Houthi terrorists’ kidnapping of a South Korean ship and two accompanying boats off the island of Kamaran.” The Yemeni foreign ministry condemned the vessel detention during a meeting with the South Korean Ambassador to Yemen Pak Woongchul. The foreign ministry said that “the dangerous Houthi escalation” posed a serious threat to the freedom of international navigation in the Red Sea. The minister called for the immediate release of “the ship and its two boats and their crew in full as soon as possible.”

Ghana: ECG MD Receives Honorary “Associate Professorship” Award.

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The Managing Director of Ghana’s electricity distribution and retail company, Electricity Company of Ghana (ECG) Kwame Agyeman- Budu has been conferred with an honorary Associate Professorship by the Accra West Region of the company. Mr. Agyeman-Budu took over from his immediate boss Ing. Samuel Boakye-Appiah whose contracted was recently terminated by the Ministry of Energy in a letter signed by Chief Director of the ministry Mr Lawrence Apaalse. According to a story on ECG’s website, Mr Agyeman-Budu was honoured during a visit to the region as part of his ongoing tour of all ECG’s operational regions after his elevation from a deputy to managing director. The Accra West Region touts itself as the “University of ECG”, due to several innovations introduced by Staff of the Region, over the years, to improve the operations of the Company. The MD expressed gratitude for the honor and promised to work assiduously to reward the confidence reposed in him by the Staff.        

Senegal: 10 Offshore Blocks To Be Offered In 2020 License Round

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The National Oil Company of Senegal, Petrosen, has announced plans to launch the country’s first offshore licensing round, at the MSGBC Basin Summit & Exhibition in Senegal in January 2020. The round will be open for six months – until the end of July 2020 – and will comprise 10 offshore exploration blocks. Speaking at the launch during Africa Oil Week Senegal’s Minister of Petroleum and Energy, H.E. Mouhamadou Makhtar Cissé, commented: “’I would like to state the immense opportunities that exist in Senegal, as well as reassure a stable regulatory and investment framework. Investors should be excited and ready to take on the challenge to take advantage of Senegal’s opportunities within its oil and gas sector.” TGS holds a range of data across this acreage to support the licensing round, including 2D seismic, 3D seismic, Multibeam and Seafloor Sampling data. The company is also currently acquiring additional 3D seismic data to provide potential bidders with a greater subsurface understanding ahead of bid submissions. The MSGBC Basin is home to several recent high-profile oil and gas discoveries, set in a variety of play types, both on and off the carbonate shelf. These include the Albian sandstone shelf edge SNE oil field – the largest global discovery of 2014 – the 25 Tcf Greater Tortue Ahmeyim project – the largest gas discovery of 2015 – and the Lower Cenomanian sandstone basin floor fan Yakaar-1 gas well – the largest global discovery of 2017. All are located offshore Senegal, within ~100 km of the Dakar Peninsula, leaving a vast area yet to be explored. Beyond these significant discoveries, modern exploration activity has been limited in the region. Two new wells are to be spudded in 2020 in AGC and Guinea-Bissau, south of Senegal and in close proximity to blocks in the upcoming license round. Wolverine-1 (CNOOC) and the Atum and/or Anchova (Svenska/FAR) prospects will target shelf edge plays and give vital information about similar plays in the open blocks. The majority of the blocks and acreage offered in the licensing round are in ultra-deepwater depths, as operators plan to target the large, clean, well-sorted sands of the unrestricted basin floor.   Source: www.energynewsafrica.com

Dubai: 7th Edition Of Clean Energy Summit Opens (Photos)

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The 7th Edition of Middle East and North Africa (MENA) Clean Energy Summit has on Tuesday opened at the World Trade Centre in Dubai, United Arab Emirates. The two-day summit started with in-depth panel discussions by Women in Clean Energy, an initiative set up under the umbrella of the MENA Clean Energy Business Council (CEBC). Among the speakers were Clara Back, Legal Director at AMEA Power, Anita Nouri CEO / Business Development Director Green Energy Solutions & Sustainability, Meriem Bellizim Business Development Senior Manager, ACWA Power, Carmen VIDAL, Chief Procurement Officer, ENGIE Middle East, South & Central Asia and Turkey, Tasneem Bakri, Operations Coordinator, Alpin Limited, Huda Shaka, Associate Director, Arup, Dr Boutheina Tlili, Associate Professor, Rochester Institute of Technology Dubai and Elen Cross, Head of Legal, NOMAC. According to energynewsafrica.com’s editor, Michael Creg Afful, who is covering the summit, topics which the participants discussed included ‘Breaking barriers for a seat at the table and overcoming gender inequality and Building a Successful Network’.       Source: www.energynewsafrica.com                  

Zimbabwe: Ngonyezi Signs Deal With ZNWA For 2000MWh Storage Hydro And Solar PV Project

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A Swedish owned Ngonyezi Projects has entered into a non-consumptive water use agreement with Zimbabwe National Water Authority. The purpose of the agreement is to install a combination of 2,000MWh Pumped Storage Hydro (PSH) and 300MW solar PV. The location of the installation is Osborne Dam on the Odzi River in Manicaland Province. Storage is an essential part of a renewable energy strategy and it is recommended that 30% of the installed solar PV should be supported by storage, says Tomas Persson, initiator of the project. Ngonyezi Projects noted that in Zimbabwe there is average 8.5h peak price per day. In terms of the design, the project is anticipated that a 300MW solar PV will require 500 ha of surface of dam, for solar panels. The dam water will cool the panels, which gives higher efficiency and the panels covering the surface water reduces algae growth and evaporation – less 20 million m3/y of evaporation PSH currently dominates total installed storage power capacity, with 96% of the total of 176GW installed globally in mid-2017. The other electricity storage technologies already in significant use around the world include thermal storage, with 3.3GW (1.9%); batteries, with 1.9GW (1.1%) and other mechanical storage with 1.6GW (0.9%).    

South Africa: Andre De Ruyter Appointed New Eskom CEO

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The South African ministry of public enterprises has announced Andre de Ruyter as Eskom’s new Group Chief Executive. De Ruyter will take up the position as from 15 January 2020 replacing Phakamani Hadebe who left the utility at the end of July 2019. Hadebe was the tenth person to resign from Eskom’s top post in the past 10 years. According to the ministry, the vacancy attracted 142 potential candidates, including eight Eskom employees. Through a process, the Board eventually interviewed six candidates, of which three were shortlisted. De Ruyter is currently the CEO at Nampak, the continent’s largest packaging firm. He holds various qualifications, including an LLB and MBA and has experience in creating and managing high-performing businesses. “I would like to thank Mr de Ruyter for not only accepting this position at a difficult time for Eskom but, given Eskom’s current financial situation, also agreeing to a lower compensation package than the position currently pays,” the minister of public enterprises said in a statement. In addition to his role at Nampak, de Ruyter spent more than two decades at petrochemical giant Sasol in a number of senior management roles. He has overseen work in the US, Germany, China and African nations including Nigeria and Angola, the department said. Public Enterprises Minister Pravin Gordhan has unveiled plans to split Eskom into generation, transmission and distribution units by the end of 2021, a reorganisation he says will enable the businesses to manage costs more effectively and make it easier for them to raise funding. A policy paper released last month also envisions the utility being exposed to greater competition, lowering its fuel costs and increasing its renewable-energy output. A chief restructuring officer has been appointed to consider how to reorganise Eskom’s debt, but the government has yet to reveal its preferred option. Finance Minister Tito Mboweni has said debt relief will only be considered after the utility shows progress in improving cash flow management and operations, setting up the three units and ensuring they are run within their means. While the Treasury suggested that Eskom could settle its entire debt by selling some of its plants, President Cyril Ramaphosa said the utility’s new plants are its “crown jewels” and should be retained, while it would be difficult to find buyers for the older ones.     Source:www.energynewsafrica.com          

Nigeria: NNPC Secures $1.16 Million Grant For 1,350 MW Power Plant

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The Nigerian National Petroleum Corporation (NNPC) and the United States Trade and Development Agency (USTDA) have concluded a deal that will see the pair sign a $1.16 million grant which will be used as partial funding for the NNPC-Abuja Independent Power Project (IPP). The plant, when complete, will generate 1,350 megawatts of electricity and contribute to the alleviation of the chronic power shortages in the West African country. The announcement was made following a meeting between NNPC and USTDA official in Abuja. The parties have agreed to finalize the deal by December 1. A statement signed by the Acting Group General Manager, Group Public Affairs Division stated that the USDTA grant was to complement the ongoing feed project in order to make the Abuja IPP initiative more bankable for strategic investors’ participation. The power plant would be fed by natural gas, a cleaner alternative to heavy fuel oil or coal.            

Ghana: Prioritise Health And Safety Procedures-CEO of GRIDCo To Workers

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The Chief Executive Officer of Ghana’s power transmission company, Ghana Grid Company (GRIDCo), Ing. Jonathan Amoako-Baah has charged staff of the company to practise safety in all areas of their life by ensuring the appropriate use of safety tools and equipment. “Every staff of GRIDCo must be a safety ambassador, who will help build a very sound safety culture, not only at work, but also in our homes, during our visits to the salons, auto mechanics and in fact, everywhere we find ourselves, so that we reduce the spate of various forms of preventable accidents at the work place and in our communities,” he said. He noted that safety and good health practices are part and parcel of the company’s business practices and processes. The GRIDCo boss pointed out that promoting safe practices is, therefore, core to his outfit’s mandate to sustain the daily lives and operations of both employees and the company. He was addressing participants during the occasion of the 2019 Corporate Safety Durbar organised by the company at Takoradi, in the Western Region of the Republic of Ghana, West Africa. The 10th Annual GRIDCO Safety Week was held under the theme: ‘Cultivating and Sustaining a Safety Culture in GRIDCO’. He mentioned that compromising on safety would result in accidents, injuries, death and damages to properties running into huge sums of money. “The costs of accidents to the employee is enormous, including both temporal and permanent injury and disability, physical and psychological pain and sometimes death.” Accidents, the GRIDCo leader mentioned increase the company’s operational costs in the areas of medical expenses, increase in insurance premiums, loss of productive man hours and damage to properties amongst others. To this end, Mr Amoako-Bash reminded GRIDCo employees on the need to raise their safety consciousness and be guided by best practices in health and safety. “Maintaining safe practices is a shared responsibility of both employer and the employee. Management is, therefore, committed to providing facilities that promote safe and healthy working environment and that huge investments have been made by the company to promote the safety of its workers.” He mentioned amongst other things Safety Handbook (Policy), safety rules book, contractors manual and standard protection code as some of the rule books that have been provided by management to guide the actions and decisions of employees in the performance of their duties. Protective equipment, clothing and facilities have also been supplied, whilst dangerous facilities and installations and zones are properly demarcated and marked to help guide employees. He also disclosed that measures have been taken to enhance safety procedures by procuring and distributing twenty non-contact high voltage detectors to eliminate the habit of teasing. In addition, forty fire blankets were provided to some substations, while plans are underway to furnish all remaining substations with one each in the coming years. GRIDCo has, over the years, recorded relatively low cases of occupational accidents, which, he described as encouraging and must be collectively improved upon by all workers. He, however, expressed worry at some employees who failed to report accidents at their work stations to management for fear of being sanctioned. That, he warned, is not a healthy practice and must be stopped. Mr Amoako-Baah urged all employees from top management to staff to follow safety rules and procedures while they encourage their subordinates to do same. “It is a fact that employees will not be safety conscious if they do not see their superiors abide by policies and procedures,” he said. Management remains committed to the provisions of continuous safety training for all category of staff especially safety representatives and coordinators who would be attending refresher courses before the end of first quarter of 2020. “I have charged the Director, TSD to ensure that a cross section of staff is involved in the ongoing review of the safety rules and procedures and all other aspects of the fine-tuning Gridco’s safety process going forward,” he stated.   Source:www.energynewsafrica.com

Ghana: Armah Buah Hails Springfield E&P Oil Find In Deepwater

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A former Minister for Energy and Petroleum in the erstwhile John Mahama administration in the Republic of Ghana, under whose tenure Ghanaian firm Springfield Exploration and Production Company was awarded an oil block in the Deepwater to explore, is beaming with smiles following announcement by the company that it had made significant oil discovery. Mr. Emmanuel Armah Kofi Buah, who is the Member of Parliament for Ellembele in the Western part of the West African nation, believes the decision by the then government to pass local content and participation law LI2204 has paid off. “Today, the verdict is out. The decision by the then NDC government led by President Mahama to ensure Ghanaian participation by law has paid off,” he said in a piece a statement. According to the Petroleum Commission, all contracts executed since the passage of LI 2204 between 2014 and quarter 3, 2019 had a minimum of 10% local participation. “In fact, contracts awarded to indigenous and joint venture companies amounted to US$7. 3 billion (indigenous companies US$1.2 billion JV US$6.2 billion). “This is clearly a vindication of our local content policy,” he explained. “If, indeed, it is confirmed as we are picking up that Springfield has made a discovery, then, it will again be a good victory for our belief in the Ghanaian, President Mahama’s decision to pass the local content and participation law and the wisdom of awarding the first oil block to a Ghanaian.” Springfield Exploration and Production Company in a press statement on Monday said its outfit and Ghana National Petroleum Corporation (GNPC), as well as Government of Ghana, will soon announce details of its maiden Afina-1 well discovery in the West Cape Three Points Block2, offshore Ghana. Afina-1, which is located at a water depth of 1030 metres, was drilled to a total depth of 4082 metres and encountered light oil with a gross thickness of 65 metres, with 50 metres light net oil pay in good quality cenomanian sandstones. The secondary target in Turonian age sands was drilled at the edge of the structure and encountered 10 metres of hydrocarbon bearing sands consisting of light oil and gas. Springfield was awarded the Block in 2016 and has existing oil discoveries of odum, banda and beech. Springfield is currently the operator and majority interest with 84 percent of West Cape Three Points Block ‘2’, with the Ghana National Petroleum Company and its exploration company, EXPLORCO, holding the remaining interest. Below is Hon. Kofi Buah’s statement The story making rounds that Springfield oil has made a huge discovery must make every Ghanaian proud but it gets even more exciting if one takes the trouble to understand the journey that brought us to this place. This block is a subject of a Petroleum Agreement by and among GoG/GNPC/GNPC Exploration/ Springfield Exploration in respect of West Cape Three Points Block 2 Offshore Ghana History In furtherance of clause 4 (10) of the West Cape Three Points (WCTP) Petroleum Agreement, Kosmos Energy Ghana Limited relinquished approximately 1,370 square kilometres of its contact area to the State. Kosmos now holds the discovery area for Mahogany, Teak and Akasa (MTA). The relinquished area was then divided into two blocks, that is, blocks 1 and 2 and declared open for petroleum operations by the Minister for Petroleum in December 2013. In all, twelve (12) companies expressed interest in the blocks and were subsequently invited to review geological and geophysical data in respect of the area. Springfield Exploration and Production Company Limited was among the companies that visited the GNPC Data room to review data over the area in April, 2014. Following this, Springfield E&P and Talervas Limited (Taleveras) submitted a joint application for exploration and production rights over blocks 1 and 2 comprising 1,370 square kilometres in June, 2014. The Block Application Evaluation Committee evaluated the joint application for application between July and August, 2014 and thereafter informed the applicants that they would be considered for only Block 2 which is approximately 673 square kilometres. Taleveras, the proposed operator, however, did not meet the required technical and financial criteria. In view of this, the Minister directed that Taleveras be replaced with a technical partner with requisite technical and financial capabilities. Accordingly Vaalco Energy Inc. replaced Taleveras in October, 2014 as a joint applicant and proposed an operator for the Block. Vaalco Energy was evaluated and found to possess the required capabilities by the Block Evaluation committee and approved by the Minister. However, in the course of negotiations, Vaalco Energy withdrew from the partnership, citing the continuous slump in oil prices and its corporate decision to cut down on exploration budget, as reasons for its withdrawal. In view of this late withdrawal, and considering Springfield’s well established credentials in the downstream petroleum sector, and President Mahama’s strong conviction that Ghanaian businesses must assume the commanding heights of the Petroleum sector, clearance was given for negotiations to continue. Springfield Exploration and Production Company however, shall be required to bring on board a technical partner with requisite financial and technical capabilities, who will be a joint operator of the block within three hundred and sixty-five (365) days, after the effective date of the Petroleum Some of the key provisions in the Agreement are: Duration of the Agreement Per article 23 of the Petroleum Agreement, the term of the Agreement is 28 years. The Agreement would however expire after five and a half(5½) years if no commercial discovery is made within the term of the Agreement. Exploration period and work programme This exploration period is five and a half (5½) and divided into three phases as follows: i Initial exploration period The initial exploration period has been agreed to last for two and a half (2½) years. During the period, the contractor shall conduct geological and geophysical studies and drill one (1) exploration well. The contractor has undertaken to expend at least thirty million United States dollars (US$30,000,000) as its minimum expenditure obligation.
  1. First extension period The first extension period is one and half (1½) years. During this period, the contractor shall conduct geological and geophysical studies and drill one exploration well.
The contractor’s minimum work obligation is thirty million Unites States dollars (US$30,000,000). iii. Second extension period The second extension period is one and a half (1½) years. During the second extension period, the contractor shall conduct geological and geophysical studies and drill one (1) exploration well. The contractor’s minimum expenditure obligation for the work is forty million United States dollars (US$40,000,000). Fiscal Terms; Royalty Oil 12.5 Royalty Gas 10% Carried Interest 11% Additional Interest 17% GNPC Explorco 5% Corporate income tax 35% This Petroleum agreement was ratified on the 11th of March 2016 This bold decision to give an indigenous Ghanaian company a chance in the upstream sector was summed up this way “ I am now happy going forward we are going to be united in our quest to strengthen Ghanaian companies, especially in the upstream industry” ( Parliamentary Hansard 11th March 2016 Emmanuel Armah-Kofi Buah) This was against a background of the fight for local content in the upstream sector. It would be recalled the grueling fight for the passage of LI 2204 with the major IOC’s opposed to it.Today the verdict is out and again The Decision by the then NDC government led by President Mahama to ensure Ghanaian participation by law has paid off According to the petroleum commission, all contracts executed since the passage of LI 2204 between 2014 and quarter 3, 2019 had a minimum of 10% local participation. In fact contracts awarded to Indigenous And joint venture companies amounted to $7. 3 billion (indigenous companies $ 1.2 billion JV $ 6.2billion. This is clearly a vindication of our local content policy If indeed it is confirmed as we are picking up that Springfield has made a discovery then it will again be a good victory for our belief in the Ghanaian, President Mahama’s decision to pass the local content and participation law and the wisdom of awarding the first oil block to a Ghanaian.     Source:www.energynewsafrica.com