Government has granted an exploration and production licence to AGM Petroleum Ghana Limited, a private petroleum company, to undertake petroleum operations in the South Deepwater Tano contract area.
As a result, Parliament yesterday gave a legislative approval to a contract agreement between the government and AGM Petroleum to enable the company to begin its operations in the area.
A report by the Parliamentary Committee on Mines and Energy on the contract, indicated that the company would operate in the area for a seven-year period.
The area lies within the offshore Tano basin which is located in the western part of the Ghana offshore sedimentary basin.
The basin has an onshore extension that covers an area of about 2,500 kilometers cube. The contract area, with a size of about 3482 kilometers cube, lies in a water depth ranging from 2000 to 3500 meters.
The report said during the initial exploration period, the minimum expenditure to be expended by the contractor during the first phase of the project is US$259 million.
�For the first extension period, the contractor will continue to reprocess existing data and drill one exploration well at a cost of US126 million,� it said.
It added that the company, in the second extension period, would further reprocess existing data as might be required and would also drill one exploration well.
�A total of US$126 million will be spent by the contractor within the second period,� the report said.
Upon discovery of commercial production of oil under the agreement, it said the state would benefit from the agreed percentages for royalty oil, domestic and export gas as well as a corporate tax of 35 percent.
It added that the state would also receive additional oil entitlements in the event of discovery of oil in commercial quantities.
�To facilitate the establishment of programmes to train Ghanaian personnel to work in petroleum operations and to ensure transfer of management and technical skills required for the efficient conduct of petroleum operations, the contractor has committed to pay to the GNPC at the beginning of each contract year, an amount of US$1 million,� it said.
In addition, the report said the contractor was required by Article 21.2 of the agreement to pay to the Explorco an amount of US$15 million to support capacity building at the tertiary level as agreed on between the committee and the GNPC.
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