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03.04.2009 Business & Finance

GNPC enters new petroleum agreement with Vanco, LUKOIL

By Daniel Nonor (Email [email protected]) - Ghanaian Chronicle
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The Ghana National Petroleum Corporation (GNPC), has renewed government's agreement with Vanco Ghana Limited and LUKOIL Overseas Ghana Limited to continue to explore oil in the Cape Three Points deepwater block.

The Cape Three Points deepwater block encompasses an area of 5,146 sq km (1,987 sq mi) in water depths ranging from 200 to 3,000 m (656 to 9,843 ft) in the Tano basin. Vanco (Operator) holds a 28.34% participating interest in the Cape Three Points Deepwater block with LUKOIL holding a 56.66% participating interest. GNPC, the state oil company, holds a 15% carried interest, with the option to acquire up to an additional 5% in any commercial discovery.

The agreement replaces the existing petroleum agreement that expires at the end of April. The new agreement provides Vanco and LUKOIL with the opportunity to continue the exploration of the area, during which new 3D seismic and additional drilling activities are planned. The new agreement also provides GNPC and the government of Ghana with significant commercial benefits, including higher royalty and increased GNPC participation. The new Petroleum Agreement also gives ownership of associated gas to the State.

Mr. Moses Oduro Boateng, Managing Director of GNPC said apart from providing the GNPC with significant commercial benefits such as royalty and increased participation, the new agreement also gave the ownership of Associated Gas to the country.

Dr Joe Oteng Adjei, Minister for Energy called on the companies to abide by the country's environmental laws to ensure that the environment was not damaged.

He called on them to be transparent in their operations to ensure that the residents did not feel they were being cheated.

He also stressed the need for the companies to engage more local hands in their operations to enable them benefit from the industry.

Mr. Gene Van Dyke, President of the Vanco Ghana Limited was hopeful of a significant discovery.

Situated in 1,874 m (6,148 ft) water depth, the Dzata prospect is a large anticlinal structure with numerous Upper and Lower Cretaceous potential reservoir horizons and distinct direct hydrocarbon indicators, including flat spots and a gas chimney, according to the companies. The well will be drilled to a total depth of approximately 4,786 m (15,702 ft), or 2,912 m (9,554 ft) below the mud line.

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