Minority consents to Tano Oil exploration agreement

Accra, July 19, GNA - The Minority on Friday gave their tacit approval for the ratification of the petroleum agreement for the exploration of oil and gas on the Shallow Water Tano Contract Area. They had earlier disagreed with a proposed equity of 12.5 per cent to be given the Ghana National Petroleum Corporation (GNPC), which represented the Republic of Ghana in the deal.

In an interview with the Ghana News Agency, Alhaji Amadu Sorogho, the Minority Deputy Ranking Member of Mines and Energy, said after series of consultations both sides came to realize that the 12.5 per cent equity would only last during the exploration stage.

He said it had been agreed by the parties that if commercial quantity of oil were struck in the area the GNPC would have a further additional production equity of 10 per cent; Government equity of five per cent and petroleum tax of 35 per cent all summing up to 65 per cent. According to Alhaji Sorogho, the Minority had come to accept that 12.5 per cent equity given to host-company during exploration conformed to international best practices.

He called for the review of the current legislation on petroleum to make it more flexible to contain changes that might occur on the international scene.

The contract is amongst the Ghana National Petroleum Corporation (GNPC), Tullow (Ghana) Limited and Sabre Oil and Gas Limited. Under the terms of the agreement the contractor(s) in association with the GNPC would undertake a programme of appraisal and exploration in the designated area.

The Minority had earlier contended that the GNPC had already invested about 50 million dollars in the area and, therefore, any percentage of equity must commensurate with the investment made so far. Mr Edward Doe Adjaho, the Deputy Minority Leader, said "in view of the fact that GNPC had pumped in considerable amount of money into the area we think that we could have negotiated for a better deal. We are, therefore, going to abstain. We would not take part in the vote and we are doing this in the interest of Ghana."

Mr Osei Kyei-Mensah-Bonsu, the Majority Chief Whip, asked the Minority to come up with a more scientific argument since the percentage of equity involved was not just the interest accruing to Ghana as a country.

He said royalty of five per cent and another form of interest of 10 per cent would add up to 27.5 per cent.

The Second Deputy Speaker, Alhaji Alhassan Yakubu, who presided, called on both groups to reconsider the issue off rpt off the floor of Parliament, which they had done. 21 July 06