This is however expected to be carried out before the operators could commence exploration activities at the oilfields.

The submission of the agreement to Parliament is in fulfillment of Article 268 subsection 1 of the constitution which makes it mandatory for any agreement on the exploitation of Ghana’s mineral resources, to be approved by Parliament.

“Any transaction, contract or undertaking involving the grant of a right or concession by or on behalf of any person including the Government of Ghana, to any other person or body of persons howsoever described, for the exploitation of any mineral, water or other natural resource of Ghana made or entered into after the coming into force of this Constitution shall be subject to ratification by Parliament,” the constitution reads.

Earlier indication from persons close to the agreement suggested that the agreement will be laid within the first few weeks upon resumption of activities in the Legislature.

But Citi Business News understands that is yet to happen since a local partner is yet to sign to complete the whole process.

The said local partner is expected to control some 5 percent stake in the entity.

It is unclear what the actual investment figures are but the deal is estimated at some 200 million dollars.

If that is the case, then the local partner to be picked would be expected to cough up at least 10,000,000 dollars as equity.

Citi Business News is however learning that the conditions put forward by the ExxonMobil group in terms of capital requirement, the balance sheet of the preferred company as well as human capital strength may have contributed to the delays.

The total Ghanaian ownership in the ExxonMobil operation is estimated at thirty percent.

This comprises 10 percent royalty to the government of Ghana while the GNPC owns 15 percent stake as Carried and Participation Interest.

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post ExxonMobil yet to reach Parliament for approval appeared first on Citi 97.3 FM - Relevant Radio. Always.

The Minister of Energy, BoakyeAgyarko tells Citi Business News the move will also increase government’s revenue from the sector to propel economic growth and transformation.

ExxonMobil’s investment in the oil sector becomes the first major one in Ghana following the landmark ruling by ITLOS in the maritime border dispute between Ghana and Ivory Coast, in September last year.

The apparent victory by Ghana gives the country an appreciable reputation among the global oil giants.

The Energy Minister, BoakyeAgyarko explains to Citi Business News the move is set to trigger further investments in the short to medium term.

“Exxon Mobil is coming in with the highest standard of safety, financial accounting and all that we need to get done as a country…we have received a lot of expression of interests from other major players; the BP, Shell, Chevron, among others. All of them are now coming to operate in Ghana,” he stated.

On his part, the CEO of the Ghana National Petroleum Corporation (GNPC), Dr. K.K. Sarpong, stressed the enforcement of local content policies.

In his view, the plan will give Ghanaians access to opportunities in Exxon Mobil’s operations where necessary.

“In terms of local content policies, the laws have been strengthened the Petroleum Commission is at the forefront of enforcing the laws and we at GNPC have the sustainability and localization department which tries to make sure that we bring our partner’s attention to the mode of operation so that we take advantage to get benefits from our local people both corporate and individuals.”

ExxonMobil joins other operators in Ghana’s petroleum upstream sector including, Tullow, Kosmos, ENI, among others.

Earlier, some industry analysts raised concern over the Energy Minister’s failure to subject the contract to competitive bidding as spelt out in the Petroleum Exploration and Production law.

Reacting to this however, the Energy Minister maintained that the negotiations started before the passage of the law, it couldn’t have taken retrospective effect.

“There were four issues which put the negotiations into abeyance; they bordered on the treatment of foreign exchange, tax issues, among others. When we came in in 2017, the company approached us again and expressed their interest to revive the negotiations with the country but outlined the need to work around the issues so it could pave the way for their operations,” he stated.

“ExxonMobil started its program of operating in Ghana before the passage of the E&P law was passed in 2016 as such the law could not take a retrospective effect,” Mr. Agyarko added.

The company is expected to start its exploration activities fully after Parliament ratifies the deal.

Ghanaian ownership is estimated at thirty percent.

This comprises 10 percent royalty to the government of Ghana while the GNPC owns 15 percent stake as Carried and Participation Interest.

Also, the local partner for ExxonMobil is entitled to five percent of the company’s stake.

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By: Pius AmihereEduku/citibusinessnews.com/Ghana

The post Gov’t signs agreement with ExxonMobil appeared first on Citi 97.3 FM - Relevant Radio. Always.

The comments also follow the commencement of operations of ExxonMobil in Ghana.

The company is expected to sign an agreement with the government on Thursday, January 18, 2018, on the development.

Citi Business News has been speaking to some industry players ahead of the official signing and they believe government must work to avert some mistakes made in previous oil agreements.

The Executive Director of KITE, Ishmael Egyekumhene described as good indication for future investments, the coming on board of Exxon Mobil.

He tells Citi Business News compelling oil companies to comply with the country’s local content policies will help retain enough revenue in the system.

“Anybody signing a petroleum agreement will have to have that at the back of their minds…We have targets as to how many Ghanaians should be employed, we have targets as to where they can source various products. These are all clearly spelt out in our local content policy. So unlike ten years ago, we are in a position where we seem to know what we like and what we expects for us so I expect them to go strictly by our local content policy,” he stated.

For this year (2018) alone, government is seeking to raise 3.2 billion cedis in revenue from the oil sector.

This is slightly higher than the 3.1 billion cedis estimated in 2017.

As at September 2017, Government has accrued 1.45 billion cedis from the oil sector.

For this year, government has also projected crude oil price of 57.36 dollars per barrel.

With production expected to come from the current oilfields which are the Jubilee, TEN and Sankofa Gye Nyame.

Meanwhile Energy Minister, Boakye Agyarko has also indicated that his outfit will subject all oil blocks contract to competitive bidding to give value for money.

“…Implement open and transparent public competitive tender processes in the award of petroleum blocks, it is our target that this year we conduct the first bidding grounds for the award of exploration introduction rights to successful companies.”

Already, the African Centre for Energy Policy (ACEP) has urged that government sanctions all oil companies that fail to comply with the countries laws guiding oil exploration.

“And how that happens, we have to continue to interrogate whether the politicians are behind them and just giving them the extension even though they are not performing, we have to continue to interrogate that to ensure that the country’s interest is rather served than that of the politicians,” the Executive Director of ACEP Benjamin Boakye told Citi Business News.

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post ExxonMobil must abide by local content laws – Analyst appeared first on Citi 97.3 FM - Relevant Radio. Always.