Mr Speaker, in so doing, I present your Report, but I would want to highlights a few points and then conclude.
The Petroleum Agreement among the Government of the Republic of Ghana, the Ghana National Petroleum Corporation (GNPC) and GNPC Explora t ion Production Company Limited, Heritage Oil Plc and Blue Star Exploration Ghana Limited in respect of the Offshore South West Tano Block, Offshore Ghana was laid in Parliament on Wednesday, 16th July, 2014 by the Hon Minister for Energy and Petroleum, Mr Emmanuel Armah-Kofi Buah in accordance with article 268 of the 1992 Constitution.
Pursuant to Orders 156 and 188 of the Standing Orders of Parliament, the Agreement was subsequently referred to the Select Committee on Mines and Energy for consideration and report.
The Committee met with the Hon Minister for Energy and Petroleum, Mr Emmanuel Armah-Kofi Buah and his Deputy, Hon Benjamin Kwaku Dagadu to consider the Agreement. Officials of the Ministry of Energy and Petroleum, the Ghana National Petroleum Corporation (GNPC) and the Petroleum Commission were also in attendance to assist in the deliberations.
The Committee is grateful to the Hon Minister and his Deputy as well as the Officials for their assistance during its deliberations.
The Committee was guided by the following documents during its deliberations:
i. The 1992 Constitution of the Republic of Ghana;
ii. T h e S t a n d i n g O r d e r s o f Parliament;
iii. The Ghana National Petroleum Corporation Law, 1983 (PNDCL
iv. The Petroleum (Exploration and Production) Law, 1984 (PNDCL
v. The Petroleum Income Tax Law,
1987 (PNDCL 188);
vi. The Petroleum Commission Act, 2011 (Act, 821);
vii. The Environmental Protection Agency Act, 1994 (Act 490);
viii. The Environmental Impact Assessment Regulations, 1999 (L.I. 1652); and
ix. The Petroleum (Local Content and Local Participation) Regula- tions 2013 (L.I. 2204).
Heritage Oil plc. (“Heritage) and Blue STAR Exploration Ghana Limited (“Blue
STAR”) showed interest in the Offshore South West Tano Block after it was relinquished by Tullow Oil and declared opened by the Minister. They visited the GNPC Data room and began a comprehen- sive review of data covering the block in early February 2014. Having reviewed the data, Heritage and BLUE STAR submitted a formal application to the Minister in late February, 2014 .The Minister approved application in March, 2014. The Minister approved the application in April, 2014.
Article 268 of the 1992 Constitution requires that all Agreements or Leases involving natural resources shall be ratified by Parliament.
It is in fulfillment of the above constitutional requirement that the Hon Minister for Energy and Petroleum laid in Parliament the Petroleum Agreement among the Government of the Republic of Ghana, the Ghana National Petroleum Corporation (GNPC) and GNPC Explora- tion Production Company Limited, Heritage Oil plc and Blue Star Exploration Ghana Limited in respect of the Offshore South West Tano Block, Offshore Ghana for its ratification.
Heritage oil Plc. is an independent oil and gas exploration and production company. The Company was incorporated in January 1992 as Land and Marine Hydrocarbons Development Limited and the name was changed to Heritage Oil and Gas Limited in June, 1993. It has premium listing on the London Stoke Exchange. The Company is a member of The FTSE 250 Index and has exchangeable shares listed on the Toronto Stoke Exchange.
Heritage Oil Plc. has producing assets in Nigeria and Russia and exploration assets in Tanzania, Papua New Guinea,
Malta, Libya and Pakistan. Heritage oil Plc. is the operator in these entire licenses.
Blue STAR Exploration Ghana Limited is a startup company incorporated on 28th June, 2013 in Ghana by an experienced team of Ghanaian upstream professionals with background in managing oil and gas development projects in Ghana and abroad. A majority share of the company is owned by Ghanaian citizens.
Heritage and Blue STAR would have equal participation of 50 per cent interest each in the venture under an arrangement in which Heritage guarantees the performance obligations of Blue STAR. Heritage and Blue STAR proposed the incorporation of a Joint Operating Company (JOC), “GNPC Technical Services Company” to act as operator for the Block.
The technical strength of the JOC, the operator of the Block, hinges on the technical capacity and expertise of Heritage. The technical expertise therefore of each senior member of the Heritage and Blue STAR teams ranges between 15-30 years, with several senior managers with over 20 years industry experience in deep-water exploration, field development and production. The projects handled by some of these professionals include Jubilee and TEN fields in Ghana and other fields in Angola. Their technical personnel have worked for high profile companies such as BP, Tullow Oil, Schlumberger, PetroCanada and Sonangol.
Heritage is the operator (through Shoreline) for OML 30 which is located onshore Niger Delta in Nigeria. OML 30 comprises eight producing fields with associated infrastructure which includes an 850,000 bpd capacity Trans Forcados pipeline running from the Eriemu Field, within the license, to the Forcados River manifold. OML 30 has a 45 per cent
interest in the pipeline.
OML 30 is one of the largest onshore licenses, by reserves, in Nigeria with gross proved and probable reserves of 1.1 billion barrels of oil, as estimated independently by RPS Energy Consultants Ltd, as at 31 March 2012. OML 30 achieved record peak production of 46,000 bopd in September 2013.
Heritage operates four exploration blocks in Tanzania, three of which are considered to be geologically analogous to the Lake Albert Basin in Uganda.
In 2013, Heritage expanded its portfolio into onshore Papua New Guinea through a farm-in to two licenses with an 80per cent working interest in Petroleum Prospecting License 319 and Petroleum Retention License 13. Heritage also has interests in a producing field in Russia.
In August 2011, Heritage acquired a controlling 51 per cent interest in Sahara Oil Services Holdings Limited (“Sahara Oil”) which owns the entire share capital of Sahara Oil Service Limited in Libya.
GNPC exploration and production company limited
Explorco is a subsidiary of GNPC established under the PNDCL 64. It was set up as a key vehicle for transforming GNPC into a fully commercial entity in which Ghanaians would hold commercial interest in exploration and production assets. Per the Agreement, Explorco will hold a commercial interest of 8.8 per cent in the Block.
The Ghana National Petroleum Corporation (GNPC)
The GNPC is a Public Corporation established by the Ghana National Petroleum Corporation Act, 1983 (PNDCL 64). The Corporation by virtue of the