About the Ghana Petroleum Exploration and Production Industry

Initial Exploration

Hydrocarbon exploration in Ghana began in 1896 by the West Africa Oil and Fuel Company (WAOFCO) who drilled in the area of Half-Asini. They were followed by the Société Française de Petrole, who began drilling in 1909, although exploration in the country between 1896 to 1967 was intermittent.

1970-2006

The first major field, the Saltpond field, was discovered in 1970 by a Signal Amoco well, located approximately 100 kilometres west of Accra, and began producing in 1975. Between 1978 and 1985 a total of about 3.47 million barrels of oil was produced from the field and 14 billion cubic feet of gas was flared.

By the end of 1980, 31 wells had been drilled, resulting in three discoveries- the Saltpond, Cape Three Points, and North and South Tano.

Major and sustained exploration activity started with the formation of Ghana National Petroleum Corporation (GNPC) in 1985 and has continued until today. Ghana's first petroleum law, the Ghana National Petroleum Corporation (GNPC) Law was passed in 1983, and in 1987 the enactment of the Petroleum Income Tax Law, again by the Provisional National Defence Council (PNDC) Government provided a separate tax regime for the petroleum sector.

Between the years 1983 and 1989, the GNPC concluded several agreements with a number of foreign firms, and in 1989 the country's first and only refinery at Tema (as of 2011) underwent its first major rehabilitation.

2007 Onwards

In June 2007, the GNPC announced a significant discovery of light oil offshore at the Jubilee Field together with partners Tullow Oil and Kosmos Energy. According to Tullow Oil, it was one of the biggest oil finds in Africa in recent times.

The Jubilee field began producing in December 2010, and is estimated to hold 1.5 billion barrels of oil. In January 2012 Tullow Oil Plc, the lead company in Ghana’s oil production, stated that it expected production at the Jubilee oil field for 2012 to average between 70,000 and 90,000 barrels per day (bpd). Currently, the field is producing at 104,000 barrels per day (bpd).

In July 2011 it was announced that Italian firm Eni had discovered gas and condensate with its Gye Nyame 1 exploration well offshore Ghana. Following this, in August 2011 the head of the Ghana National Gas Company announced that that Ghana will borrow $800 million from the state-owned China Development Bank to develop its natural gas infrastructure and the first gas could be expected by the end of 2012 or early 2013. Currently, the Gas infrastructure is under construction.

Management and Regulation of the Industry: 

 

Petroleum Commission, Ghana

Established in 2011 by the Petroleum Commission Act, Act 821, the Commission is the regulator for petroleum activities in Ghana. According to the act, petroleum activities “means any activity engaged in within and outside Ghana related to the exploration for, development and production of petroleum, the acquisition of data and drilling of wells and the treatment, storage, pipeline transportation and decommissioning and the planning, design, construction, installation, operation and use of any facility for the purpose of the activities.” Essentially, this makes the Commission the regulator of the upstream sector of the Ghanaian petroleum industry.

The Commission took over regulation of the sector from the Minister of Energy, who until then regulated the sector with the assistance of Ghana National Petroleum Corp. (GNPC). Act 821 specifically requires GNPC to cease to exercise any advisory function in relation to the regulation and management of the utilization of petroleum resources and the coordination of policies in relation to them six months after the passage of Act 821. This took effect on Jan. 16, 2012

Functions

The Commission’s remit extends beyond that of any other regulatory body in Ghana. It is a supra-national regulator with diverse powers, which stem from its tripartite role. In addition to being a regulator in the technical sense, the Commission is also the manager of Ghana’s petroleum resources, and as coordinator of policies in relation to them, the Commission acts as the interface between the government and industry. Government agencies and departments are required to cooperate with the Commission.
Specifically, the functions of the Commission are to:
1. Promote planned, well executed, sustainable, and cost efficient petroleum activities to achieve optimal levels of resource exploitation for the overall benefit and welfare of citizens;
2. Recommend to the Minister of Energy national policies related to petroleum activities;
3. Monitor and ensure compliance with national policies, laws, regulations, and agreements related to petroleum activities;
4. Ensure

• Compliance with health, safety, and environmental standards in petroleum activities in accordance with applicable laws, regulations, and agreements
• Optimum exploitation of petroleum resources
• Optimal utilization of existing and planned petroleum infrastructure
• Contractors, subcontractors, and other persons involved in petroleum activities comply with applicable laws and regulations
• Compliance with fiscal metering requirements in petroleum production activities in accordance with applicable laws and regulations.

5. Monitor petroleum activities and carry out the necessary inspection and audit related activities;
6. Promote local content and local participation in petroleum activities as prescribed in the Petroleum Exploration and Production Act 1984 (PNDCL 84) and other applicable laws and regulations to strengthen national development;
7. Receive and store petroleum data, manage a national petroleum repository and at the request of the Minister, undertake reconnaissance exploration including data acquisition;
8. Receive applications and issue permits for specific petroleum activities as required under petroleum laws and regulations;
9. Assess and approve appraisal programs;
10. Advise the Minister on matters related to petroleum activities including:

• Field development plans
• Plans for the development of petroleum transportation, processing, and treatment facilities
• Decommissioning plans for petroleum fields and petroleum infrastructure.

11. Issue an annual public report on petroleum resources and activities in Ghana in accordance with the schedule to Act 821 and publish the report in the Gazette
12. Receive information from contractors as provided for under applicable laws and regulations
13. Analyze petroleum economic information and submit economic forecasts on petroleum to the Minister of Energy
14. Perform any other function related to the object of the Commission or assigned to it under any enactment
 
The Environmental Protection Agency (EPA)
The primary institution in Ghana responsible for regulating the environment and implementing the Government’s environmental policies is the EPA. It is guided by the legal and regulatory mechanisms of the Environmental Protection Agency Act 1994 and the Environmental Assessment Regulations 1999. The 1994 Act requires the EPA to issue environmental permits and pollution abatement notices, prescribe environment standards, develop a comprehensive database on the environment, co-ordinate with relevant institutions and monitor compliance. Under the Environmental Assessment Regulations, 1999, an environmental impact assessment (EIA) is required for all new undertakings; for example with oil, gas and mining exploration, a permit must be issued prior to commencement
The EPA has formulated guidelines which ae applicable to the Oil and Gas indutustry. These include:
1. The guidelines for Environmental Assessement and Management in the Offshore Oil and Gas Development
2. Dispersant Policy
3. Dispersant importation and use guidelines
4. Oil Waste Mangement guidelines
The EPA has initiated the process of enacting the following legislations that are applicable to the oil and gas industry.

• 1. Waste Regulation (The initial proposal for this regulation was Hazardous Waste Regulation. However, stakeholders are of the view that the law should be expanded to cover all waste categories)
• 2. Oil Pollution Preparedness and Response Regulation (this legislation would be enacted pursuant to the enactment of the Marine Pollution Bill, which is currently before Parliament)
• 3. Hazardous (and E-waste) Waste Act

The EPA is also working in collaboration with other stakeholders to enact the following legislations.

• 1. Marine Pollution Act (lead institution is Ghana Maritime Authority)
• 2. Exploration and Production Act (Lead institution is Ministry of Energy 

 There are currently Twelve (12) licences awarded to ten oil and gas companies. Upstream companies currently in the industry include Tullow, Hess, Kosmos, ENI, Ophir Energy, Vitol Upstream, Anadarko, Afren and Lukoil amongst others.
 Sources: 
 http://booktype-demo.sourcefabric.org/ghana-oil-almanac/historical-overview/
 http://www.epa.gov.gh/
 http://gh-epf.org/index.php/about-the-industry