GHANA S OIL AND GAS SECTOR Presentation at AGI Conference November, 2017
Industry Overview Ghana s Status Emerging Oil and Gas producer with enormous potential Healthy investment climate and stable economy to encourage investment inflows Industry Dynamics Upstream industry currently dominated by international companies (ENI, Tullow, Anadarko, Hess, Kosmos, etc.) Participation by Ghanaians is limited due to: Low technical and commercial expertise Huge capital investments constraints Generally low risk appetite of Ghanaians Industry leadership by a strong commercially-focused NOC is key 17 Petroleum Agreements (PAs) currently in place (including 3 PAs ratified in 2016) Government s Objective Ensure the development of a vibrant and flourishing industry Integrate the oil and gas sector into the rest of the economy Derive the utmost from the sector in a sustainable manner 2
Regulatory & Policy Environment Acts/Laws The 1992 Constitution of the Republic of Ghana Policies Ghana Shared Growth and Development Agenda Petroleum (Exploration and Production) Act, 2016 Act 919 GNPC Law (PNDCL 64) The Petroleum Revenue Management Act, 2011 (Act 815) Amended 2015 Energy Sector Strategy and Development Plan Local Content and Local Participation Model Petroleum Agreement (MPA) Petroleum Commission Act, 2011 (ACT 821) Local Content and Local participation Regulation Income Tax Act, 2015 3
GNPC s Strategy 4
GNPC s Mandate and the National Development Agenda Our mandate is in line with the Ghana Shared Growth and Development Agenda (GSGDA) which captures the national aspiration for the oil and gas sector. The GSGDA states: Synergy between the oil and gas industry and the rest of the economy is critical for ensuring that Ghana achieves broad-based development and that the exploitation of its natural resources meets the needs and aspirations of its citizens. [there is] an urgent need for a planning outlook that locates the development of these resources strategically at the heart of the national development agenda. The mandate is consistent with the Ministry of Energy and Petroleum s policy direction for the industry as captured in the Ministry of Energy s Energy Sector Strategy and Development Plan February 2010 5
COMMERCIAL GNPC S Commercial & Developmental Roles Competitiveness across O&G value chain delivers greater financial & economic returns to the State in terms of: Royalties Carried & Participating Interests Taxes Surface Rentals Dividends Savings Negotiating Power Sector Enabler Gas aggregator STRONG, EFFICIENT GNPC DEVELOPMENTAL Securing GNPC s long-term competitiveness will lead to: Development in national technology and skills Quality employment for Ghanaians Development of local business Development of strategic national infrastructure Long-term competitive fuel pricing More competitive borrowings National control of market demand and supply swings CSR Projects Virtuous self-reinforcing cycle of interdependence between the commercial and developmental roles 6
GNPC s Mandate and Objects Ghana National Petroleum Corporation was established in 1983 by GNPC Law 1983 (PNDC Law 64) as a commercial strategic vehicle for state participation in the oil and gas industry. The Objects of GNPC as enshrined in section 2 (1) of PNDC Law 64 are: to undertake the exploration, development, production and disposal of petroleum. The Petroleum (Exploration and Production) Act, 2016 Act 919 complements PNDC Law 64 by giving GNPC rights to undertake its mandate in all open blocks and requires all persons desirous of undertaking upstream petroleum operations to partner with the Corporation Upstream Midstream Downstream Exploration and Production Licence Acquisition Farm-in Activity Exploration Appraisal Development Production Disposal Transport and Logistics Pipelines Tankers Storage Facilities Refining and Processing Refineries Processing Plants Retail Outlets 7
Industry Structure 8
Voltaian Basin Project The Voltaian Basin is a huge inland sedimentary basin constituting almost 40% of Ghana s land mass Covers an area of approximately 103,600 sqkm GNPC is pioneering exploration activities in the inland Voltaian basin under its 6-year reconnaissance study programme from 2015-2020 \ Voltaian Basin The main project objective is to establish the prospectivity and enhance our knowledge base of the Voltaian Basin The VBP is GNPC s flagship project through which the Corporation will exert significant impact on the Ghanaian petroleum industry as vehicle toward independent operatorship. The 6-year reconnaissance program will cover 2D seismic data acquisition and processing, environmental impact assessment, community relations management and drilling of 2 conventional wells. Activities firmly underway to determine the petroleum system of Ghana s only onshore basin The 2D Seismic Survey contract and the Surface Geochemistry survey contract has been approved by the CTRB and signed by the parties. The team currently is preparing to commence work in November. 9
Local Content in VBP GNPC has reserved the following areas, among others, for Ghanaians: Supply of fuel to run the operations across the vast basin Labour sub-contracting and workforce management Provision of camping logistics as well as mobilisation and demobilisation, as the project base moves Provision of catering services, including potable water, as well as laundry services Provision of medical services to field personnel Supply of computers and stationery for field work Supply of 4X4 vehicles, and vehicle rental Supply of vehicle tyres and other spares Provision of earthmoving equipment and services 10
Opportunities Upstream & Downstream Joint venture partnerships and strategic alliances for upstream projects with GNPC Farm-in opportunities in upstream licenses Upstream infrastructure development- FPSO; Subsea structures/ installations Investment in power generation projects; Osagyefo Power Barge Financing for gas infrastructure projects; LNG etc. 11
Opportunities Services Secto Opportunities exist in a wide range of services required to support oil and gas appraisal, development and production and disposal activities. Key areas include: Infrastructure fabrication sites, bulk and other transport facilities, office and industrial space, dry dock, shore-base etc. Supply of inputs human resources, safety equipment, engineering equipment, manufactured parts etc. Technical and non-technical services product inspection, surveys, terminal audits, consultancy, financial and investment services etc. General services cleaning, car rentals, real estate etc. Capacity building Opportunities are open to foreign entities willing to partner local companies and organisations with a view to developing local capacity. 12
Ghana National Petroleum Corporation Private Mail Bag, Tema, Ghana www.gnpcghana.com Thank you