Shell, Chevron Sign Preliminary Deal for Ghana Offshore Oil Block
Shell and Chevron have signed a non-binding agreement covering potential production rights over Ghana's South Deepwater Tano Cape Three Points oil and gas block as the country seeks fresh investment and reviews its upstream petroleum framework.
- Shell and Chevron signed a non-binding agreement concerning Ghana's South Deepwater Tano Cape Three Points block.
- The agreement with Ghana National Petroleum Corporation provides a framework for further negotiations.
- Ghana is reviewing its legal and fiscal framework for upstream petroleum activities.
- Proposed reforms include reducing GNPC's initial interest in upstream projects from 15% to 10%.
- Ghana's crude oil production declined from 71.44 million barrels in 2019 to 48.25 million barrels in 2024.
- Investment in the Jubilee and TEN fields could fund drilling of up to 20 new wells.
MONTREAL (Oil Monster): Oil majors Shell and Chevron have signed a non-binding agreement for the acquisition of production rights over Ghana's South Deepwater Tano Cape Three Points oil and gas block, Ghana's energy minister said.
What Shell and Chevron Agreed in Ghana
The memorandum of understanding with Ghana National Petroleum Corporation, signed on Tuesday, comes as the West African country looks to encourage investment and help reverse declining output.
Shell said the agreement provides a framework for further negotiations of final license terms and remains subject to relevant approvals. Chevron confirmed the MoU, saying it is "constantly reviewing new global exploration opportunities".
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Ghana Is Reviewing Its Upstream Petroleum Framework
The government is currently undertaking a comprehensive review of its legal and fiscal framework for upstream petroleum activities.
Addressing an energy conference in Accra this week, Energy Minister John Jinapor told delegates that one proposed reform would reduce GNPC's initial interest in upstream projects, which does not carry financial obligations, to 10% from 15%.
Proposed Changes Include Taxes and Deepwater Royalties
Other proposed steps include introducing a simpler tax regime and adopting differentiated royalty treatment based on water depths.
The measures come as Ghana seeks to encourage new upstream investment while confronting a decline in national crude oil production.
Ghana's Crude Oil Output Has Declined From Its 2019 Peak
Ghana's crude oil production dropped from a peak of 71.44 million barrels in 2019 to 48.25 million barrels in 2024, according to the U.S. International Trade Administration.
Jubilee and TEN Investments Could Add New Wells
Major new investments in the Jubilee and TEN fields announced by Kosmos Energy and partners including Tullow Oil could fund the drilling of up to 20 new wells and bolster oil and gas output.
Ghana Oil Deal: Questions and Answers
What agreement did Shell and Chevron sign in Ghana?
They signed a non-binding agreement concerning the acquisition of production rights over Ghana's South Deepwater Tano Cape Three Points oil and gas block.
Is the Shell-Chevron Ghana agreement final?
No. Shell said the agreement provides a framework for negotiations over final license terms and remains subject to relevant approvals.
Why is Ghana reviewing its upstream petroleum rules?
Ghana is seeking to encourage investment and help reverse declining oil production while reviewing its legal and fiscal framework for upstream petroleum activities.
What change has been proposed for GNPC's upstream interest?
Energy Minister John Jinapor said a proposal would reduce GNPC's initial interest in upstream projects from 15% to 10%.
How could investment in the Jubilee and TEN fields affect drilling?
Investments announced by Kosmos Energy and partners including Tullow Oil could fund the drilling of up to 20 new wells and support oil and gas output.
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Courtesy: www.reuters.com