An extract from The Oil and Gas Law Review - 7th edition
Introduction
i Historic overview
The upstream oil and gas activities in Ghana consist of exploration, development and production of oil and gas. These activities are undertaken in five sedimentary basins within Ghana's territorial areas made up of the Tano Basin and Cape Three Points Basin in the Western Region (mostly referred to together as the Western Basin), the Saltpond Basin in the Central Region, the Accra/Keta Basin and the Inland Voltaian Basin. The Western Basin, Saltpond Basin and Accra/Keta Basin are all offshore and have been explored. The Inland Voltaian Basin is onshore and has not been really explored.
The exploration of hydrocarbons in Ghana dates as far back as the late seventeenth century. The first recorded hydrocarbon exploration was undertaken by West Africa Oil and Fuel Company in 1896. From 1905 to 1925, other companies that engaged in upstream activities included Société Française de Pétrole, African and Eastern Trade Corporation and Gulf Oil Company. By independence in 1957, 21 wildcats had been drilled for exploration. Key among these was the first offshore discovery by Signal-Amoco Consortium in the Saltpond Basin, named the Saltpond Field, which started production in 1978. The production at the Saltpond Field peaked at 4,500 barrels of oil per day during its production stages and was shut down in 1985. By the mid-1980s, the total well count in Ghana (onshore and offshore) was 54.
ii Legislative overview
In the mid-1980s, the government introduced the first legislative framework for upstream oil and gas activities in Ghana. Three main pieces of legislation were enacted by the government to regulate the upstream oil and gas activities. Chief among the reforms was the passage of the Ghana National Petroleum Corporation Act, 1983 (PNDCL 64), which established the Ghana National Petroleum Corporation (GNPC) as the national oil corporation to champion state activities in the upstream oil and gas sectors. In addition, the now repealed Petroleum (Exploration and Production) Law, 1984 (PNDCL 84) was enacted to regulate exploration and production activities as well as provide the framework for engagement of international oil firms by the government to undertake exploration and production activities. Lastly, the Petroleum Income Tax Law 1987 (PNDCL 188) was passed to regulate operations and taxation in the upstream oil and gas sector. Of the three pieces of legislation, PNDCL 84 and the PNDCL 188 have been repealed and replaced with new pieces of legislation that are currently applicable. This is discussed further below.
The Fourth Republican Constitution, which came into force in 1992, provides that 'every mineral in its natural state in, under or upon any land in Ghana, rivers, water course throughout Ghana, the exclusive economic zone, any area covered by the territorial sea or continental shelf in the Republic of Ghana is the property of the Republic of Ghana and is vested in the President on behalf of, and in trust for the people of Ghana'. As a check on the powers of the President to control and manage the resources on behalf of the people of Ghana, the Constitution requires parliamentary approval for all transactions involving the grant of a right for the exploitation and production of natural resources in Ghana and further mandated the establishment of specific commissions to be responsible for the regulation and management of the utilisation of the natural resources and the coordination of the relevant policies.
Upon the discovery of oil in commercial quantities offshore Ghana in 2007, the Petroleum Commission Act, 2011 (Act 821) was subsequently passed to set up the Petroleum Commission as the regulator to coordinate activities in the upstream petroleum industry in accordance with the Constitution. In addition, the Petroleum Revenue Management Act, 2011 (Act 815) as amended by Petroleum Revenue Management (Amendment) Act, 2015 (Act 893), was enacted to provide the framework for management of petroleum revenues. In 2016, the Petroleum (Exploration and Production) Act, 2016 (Act 919) (the E&P Act), was passed to replace the PNDCL 84, as the primary legislation for the regulation of petroleum activities in the upstream sector. Also, the Income Tax Act 2015 (Act 896) as amended provides a regime for the taxation of income of contractors and subcontractors in the sector. In order to support the implementation of the key laws in the sector, the government through the Minister of Energy (the Minister) and the Petroleum Commission have enacted a number of regulations, guidelines and developed policies for the sector. These include the following:
iii Industry and foreign investment overview
The establishment of the national oil corporation, the GNPC and the passage of the above legislation have laid the foundation and provided the framework for activities in the industry. Efforts by the GNPC over the years since its establishment has led to an increase in activities in the sector to find more oil. This has resulted in the execution of a number of agreements between the GNPC, the government and international oil companies (IOCs) to fund, acquire, process and interpret data on seismic activities from the offshore basins. As earlier noted, PNDCL 84 provided the initial framework for engagement of international oil companies as it set the terms and conditions that must be in a contract for such an engagement. In furtherance of standardisation of the contract form for the engagement, the country has adopted a model petroleum agreement based on international best practice to attract IOCs. The IOCs currently involved in the upstream oil and gas sector include Kosmos Energy, Hess Corporation, Tullow UK, Norsk Hydro Oil, Heliconia Energy Resources, Anadarko, ENI, Aker Energy, AGM Petroleum and ExxonMobil. These investments have resulted in deepwater offshore exploration activities.
The first significant deepwater oil discovery in Ghana was in 2007 by Tullow Oil, Kosmos Energy, Anadarko Petroleum and EO Group in the offshore Tano/Cape Three Points Basin of the Ghanaian continental shelf, christened the Jubilee Fields. The Jubilee Fields is a unitised field located 65km offshore, south-east of Takoradi in the Western Region of Ghana between the Deepwater Tano and West Cape Three Points blocks. The Deepwater Tano block is currently held by the Jubilee Partners, a consortium of IOCs in the following proportions: Tullow Oil (49.95 per cent), Kosmos Energy (18 per cent), Anadarko (18 per cent), the GNPC (10 per cent) and Sabre Oil and Gas (4.05 per cent). West Cape Three Points is also held by Tullow (22.9 per cent), Kosmos (30.88 per cent), Anadarko (30.88 per cent), the GNPC (10 per cent), Sabre Oil and Gas (1.85 per cent), and EO Group (3.5 per cent). The field is operated by Tullow Oil as the mandated operator. The field has proven reserves of approximately 3 billion barrels and is currently estimated to be producing approximately 120,000 barrels of oil per day.
The success of the Jubilee Field has immensely reduced the perceived risk involved in investing in upstream oil and gas activities in Ghana resulting in increased exploration activities in the Basin leading to over 24 other discoveries offshore the Western Basin. The key discoveries include Tweneboa-1 (2009), Tweneboa-2 (2010), Enyenra (formally Owo) (2010), Ntomme (2012) and Wawa (2012) in the Deepwater Tano block; Mahogany Deep (2009), Teak-1, Teak-2 (2011) and Akasa (2011) in the West Cape Three Points block; Sankofa-1 (2009) Gye Nyame-1 (2011), and Sankofa East (2012) in the Offshore Cape Three Points; Paradise-1 (2011), Hickory North-1 (2012), Pecan (2012), Almond-1 (2012), Beech-1 (2012), Cob-1 (2013) and PN-1 (2013) Pecan South 1A (2019) in the Deepwater Tano Cape Three Points block; and Akoma 1X in Cape Three Points Block 4 (2019).
In May 2013, the plan for the development of the Tweneboa Dzata-1 (2010), Enyenra and Ntomme (TEN) fields, which cover an area of more than 800km², was approved by the government. Production has commenced from the TEN fields, and the first oil was delivered to the FPSO (floating production storage and offloading vessel) John Atta Mills in August 2016.
In 2012, ENI announced the first oil and gas discovery in the Offshore Cape Three Points (OCTP) block, also located in the Tano Basin. Through its Ghanaian subsidiary, ENI operates the Sankofa and Gye-Nyame fields with its partners Vitol Upstream Ghana Limited and GNPC. The project is located approximately 60km offshore west coast of Ghana and is estimated to hold about 41 billion cubic meters of non-associated gas and 500 million barrels of oil. Commercial operations commenced with the flow of the first oil from the Sankofa Gye Nyame oilfields through the FPSO John Agyekum Kufuor in July 2017. Gas production commenced in June 2018, and the field is expected to produce 180 million cubic feet of gas per day for 15 years.
On 23 September 2017, the Special Chamber of the International Tribunal for the Law of the Sea (ITLOS) gave its judgment in Dispute concerning delimitation of the maritime boundary between Ghana and Côte d'Ivoire in the Atlantic Ocean (Ghana/Côte d'Ivoire). The litigation was originally commenced by Ghana in Germany at the ITLOS by an application initiating arbitral proceedings under Annex VII of the United Nations Law of the Sea Convention (the Convention) after Côte d'Ivoire began laying claim to some offshore oil concessions and adjoining seabed being developed and exploited within Ghana's territory. Côte d'Ivoire, in February 2015, had filed for preliminary measures urging the tribunal to suspend all activities on the disputed area until the definitive determination of the case and following legal and technical representations by both countries on 29 and 30 March 2015, the ITLOS Special Chamber in Hamburg, Germany ruled in April 2015 that ongoing projects in the disputed fields, including the US$7.5-billion TEN project could proceed while the substantive case was being dealt with, Ghana was ordered not to start new explorations within the disputed area. The Special Chamber finally concluded that there is no tacit agreement between Ghana and Côte d'Ivoire to delimit their territorial sea, exclusive economic zone and continental shelf both within and beyond 200 nautical miles. It rejected Ghana's claim that Côte d'Ivoire is estopped from objecting to the 'customary equidistance boundary' and further concluded that there is no relevant circumstance in the present case which would justify an adjustment of the provisional equidistance line. Accordingly, the Special Chamber ruled on the relevant delimitation line for the territorial sea, the exclusive economic zone and the continental shelf within 200 nautical miles.
Following the ITLOS ruling in 2017, Tullow received notification from the government to recommence drilling in the TEN fields, and a multi-year incremental drilling programme started in 2018, seeking to ramp up production from the TEN fields to utilise the full capacity of the FPSO and sustain this over a number of years. Again, in October 2017 the government approved the Greater Jubilee Full Field Development Plan, allowing Tullow and its joint venture partners to prepare for a multi-year incremental drilling programme that integrates the nearby Mahogany and Teak discoveries in the West Cape Three Points Block with the Jubilee Field.
From 2013 to date, at least 12 exploration licences have been issued to other players in the industry, including Heritage Oil, AGM Petroleum, Britannia-U, Sahara Energy Fields, Camac Energy and Springfield. New discoveries that have been appraised include Wawa (Tullow), Mahogany Deep, Teak and Akasa (Kosmos Energy) Paradise, Hickory North, Almond, Beech, Cob, Pecan PN-1 and Pecan South 1A (Hess Corporation/Aker Energy).
Another investment activity worth mentioning relates to the activities in the gas sector. In 2011, the Ghana Gas Company Limited (GGCL) was established by the government as a private limited liability company with responsibility for building, owning and operating infrastructure required for the gathering, processing, transporting and marketing of natural gas resources in the country. The government has now transferred its shares in GGCL to the GNPC, which makes GGCL a subsidiary of the GNPC. This is in line with the policy of the government to make the GNPC the national aggregator of gas in Ghana for better and efficient management of gas resources. It is estimated that Ghana has approximately 22.65 billion cubic metres of proved reserves of natural gas in its oil fields. To ensure the safe and optimal use of natural gas, associated gas and natural gas liquids (NGL) from the oil fields, GGCL entered into an engineering procurement construction and commissioning agreement with SINOPEC in 2012 for the development of the Western Corridor Gas Infrastructure Development Project. The first phase of the project was commissioned in September 2015 and consists of an offshore pipeline, an onshore pipeline, a gas processing plant and a NGLs export system at Atuabo in the Western Region of Ghana. At full capacity, the facility is expected to produce 107 million standard cubic feet of lean gas, 500 tonnes of LPG, 80 tonnes of pentane and 45 tonnes of condensates daily. The project is currently connected to the gas infrastructure to the West Africa Gas Pipeline to enable the reverse flow of gas between the two lines.
In October 2018, the government launched the country's maiden oil and gas licensing bid rounds, with six blocks, all in Tano/Cape Three Points (Western Basin) being placed on offer. The bidding round attracted multinational oil companies such as ExxonMobil, British Petroleum, Eni/Vitol, China National Offshore Oil Corporation, Qatar Petroleum, Aker Energy, Cairn Energy, Global Petroleum Group and First E&P. Sixteen oil and gas companies were initially selected in early 2019 to participate in the final stage of the oil and gas licensing round. Three of the oil blocks (2, 3 and 4) were selected to undergo a competitive bidding process while two blocks (5 and 6) were to be undertaken by direct negotiations. Block 1 was, however, reserved for the GNPC. Two companies were disqualified, one for bidding for the block reserved for GNPC and the other for not meeting financial obligations. Also, ExxonMobil and British Petroleum later withdrew from the contest without assigning reasons. The government, on 27 June 2019 announced the winners of blocks 2 and 3 as First E&P Ltd/Elandel Energy Ghana Ltd and Eni/Vitol respectively.
Legal and regulatory framework
As already indicated, under the Constitution of Ghana, all untapped natural resources including oil and gas resources are vested in the President of Ghana for and on behalf of the people of Ghana. This is restated in the E&P Act. Therefore, the right to explore and develop such resources is subject to agreement or licence granted by the government (acting through the Ministry of Energy) and approved by Parliament. Initial petroleum activities in Ghana were governed by the Ghana National Petroleum Corporation Act, 1983 (PNDCL 64), which constitutes an establishing instrument of the national oil corporation and the Petroleum Income Tax Act, 1987 (PNDCL 188). However, owing to increased activities in the upstream oil and gas sector after the commercial discoveries in the deepwaters, various regulatory reforms were initiated. This resulted in the enactment of the Petroleum Commission Act 2011 (Act 821), the E&P Act that provides an overarching framework, and the Petroleum (Local Content and Local Participation) Regulations 2013 (LI 2204) enacted to ensure local participation in the sector given the increase in the activities of foreign-owned entities in the sector, among others. There is also the Petroleum Revenue Management Act 2011 (Act 815) that governs the use of petroleum revenue accruing to the state from petroleum exploration. These laws are in addition to other regulations, directives and guidelines issued to guide operations in the sector.
The primary laws governing the upstream oil and gas sectors are the E&P Act and the Ghana National Petroleum Corporation Act, 1983 (PNDCL 64) and a taxation regime under the Petroleum Income Tax Act, 1987 (PNDCL 188) and the Income Tax Act, 2015 (Act 896) as amended.
i Domestic oil and gas legislation
The main legislation relating to the upstream oil and gas sector is as follows.
The Ghana National Petroleum Corporation Act, 1983 (PNDCL 64)
The first major activity to set the stage for regulatory reform of the upstream sector was the establishment of the GNPC under PNDCL 64. The GNPC is established as the national oil corporation charged with the responsibility to explore, develop, produce and dispose of hydrocarbons.
The law also mandated GNPC to advise government on oil and gas matters and to promote the exploration and orderly development of the petroleum resources of Ghana. In effect, the GNPC was created as a regulator and operator performing both regulatory and commercial functions under the supervision of the Ministry of Energy. At the earlier stages, the GNPC led the effort to acquire data to establish Ghana's reserves potential, and also led efforts to market the potential to IOCs interested in investing in the upstream sector in Ghana. However, the dual roles played by GNPC created conflict in the upstream sector as it seems to be a regulator and a player in the sector. This conflict, or potential conflict, was addressed in later regulatory reform; with the passage of the Petroleum Commission Act, 2011 (Act 821), which transfers the GNPC's regulatory functions to the Petroleum Commission. Currently the GNPC is a commercial operator and the holder of government interests in petroleum operations in Ghana. It is also the national aggregator of natural gas from upstream operators to service the local market. Under the Petroleum Revenue Management Act, a specific percentage of the net cash flow from the carried and participating interests of the state is ceded to the GNPC to fund its operations.
The Petroleum (Exploration and Production) Act, 2016 (Act 919)
The E&P Act is the main legislation that regulates the grant of licence for upstream oil and gas activities, and regulates the exploration, development and production of petroleum in Ghana. The Act, in line with the Constitution, provides that petroleum existing in its natural state within Ghana is the property of Ghana and is vested in the President on behalf of the people of Ghana. The Act also permits the Minister to grant rights and enter into agreements for the exploration and production of oil and gas subject to the ratification of such rights or agreements by Parliament. The Act further mandates the Minister and the Petroleum Commission to develop regulations on safe construction, health and safety, product standard, reference maps for oil blocks, competitive bidding and terms and conditions of petroleum agreements.
Except in the case of the GNPC, any person who intends to engage in the exploration, development and production of petroleum can only do so in accordance with a petroleum agreement entered into between that person and the government of Ghana and the GNPC. Under the Act, a petroleum agreement can only be entered into after an open, transparent and competitive public tender process. However, the Minister may, on stated grounds, enter into a petroleum agreement without going through a tender process.
The Act mandates the Minister to prepare a reference map showing areas of potential petroleum fields within Ghana divided into numbered areas (blocks). Subject to rights granted to other entities under petroleum agreements entered into, the GNPC has the right to undertake exploration, development and production of petroleum over the blocks declared by the Minister as open for petroleum operations. Prior to exploration activities, the GNPC or the contractor must submit to the Minister for approval, a development plan in respect of a petroleum field to be developed directly by the GNPC or the contractor, as the case may be.
The essential terms and conditions that must be in a petroleum agreement are prescribed under the E&P Act. The Act prohibits the assignment of petroleum agreements, directly or indirectly, without the written consent of the Minister. The essential provisions of the Act cover the following:
- the power of the Minister to open an area for petroleum activities;
- the power of the Minister to close an area or redefine the boundaries;
- that petroleum agreements must be entered into in accordance with an open, transparent and competitive public tender process;
- the power of the Minister to grant a petroleum reconnaissance licence for a period of not more than three years renewable for another two years;
- the right to review terms and conditions of the petroleum agreement owing to material change in circumstances;
- the right of the Minister to approve an operator before the execution of a petroleum agreement;
- the pre-emptory right of the GNPC to acquire the interest of a contractor under a petroleum agreement within 90 days of notification of intention to dispose of interest;
- any borrowing exceeding US$30 million for the exploration, development and production is subject to the approval of Parliament and must comply with the Petroleum Revenue Management Act, 2011 (Act 815);
- the right of a contractor to submit a proposal to relinquish a contract area or part of a contact area;
- the minimum work and expenditure obligations to be fulfilled by the contractor during the initial exploration period;
- transfer to the GNPC of physical assets purchased, installed, constructed by the contractor for petroleum operations and the cost of which is included in the exploration of expenditures;
- the requirement of a permit for exploration drilling and an annual permit for the production of petroleum;
- the requirement of a licence to install and operate facilities for the transportation, treatment and storage of petroleum;
- the establishment of a petroleum register for petroleum agreements, licences, permits and authorisations;
- the right of the Minister to require a licensee, contractor or subcontractor to provide security for the fulfilment of its obligations under an agreement;
- the establishment of a local content fund;
- pollution damage, liability of the polluter;
- payment of income tax in accordance with the laws of Ghana except as modified in the agreement;
- payment of royalties; and
- payment of a bonus to Ghana.
The Act also prescribed specific terms that must be provided in the petroleum agreements. These include:
- the right of GNPC to hold an initial participating carried interest of at least 15 per cent for exploration and development;
- the GNPC has the option to acquire an additional participating interest as determined in the petroleum agreement within a specified period of time;
- the petroleum agreement must be for a term not exceeding 25 years subject to ability of the Minister to extend;
- change of ownership of contracting party is subject to consent of the Minister or Commission; and
- the GNPC has the pre-emptive right to acquire interest of contractors.
The general requirements for petroleum activities under the Act include:
- the standard of operations in conducting petroleum activities;
- supervision and inspection;
- data and information obtained by a licensee, contractor or subcontractor as a result of petroleum activities are property of Ghana;
- maintaining records of data and information in Ghana;
- provision of information upon request by the Minister;
- the use of Ghanaian goods and services; and
- the local content plan.
As part of the regulatory reform following the commercial discovery of oil and gas, the Petroleum Commission was established under the Petroleum Commission Act as the upstream petroleum regulator with the object to 'regulate and manage the utilisation of petroleum resources and to coordinate the policies in relation to them'. Essentially, the Act establishes the Petroleum Commission to perform the regulatory functions previously performed by the GNPC under the PNDCL 84.
Petroleum (Local Content and Local Participation) Regulations, 2013 (LI 2204)
Pursuant to Act 821, the Petroleum (Local Content and Local Participation) Regulations were passed in July 2013 to, among other things, 'promote the use of local expertise, goods and services, businesses and financing in the petroleum industry value chain and their retention in the country'. The Regulations focus on ensuring the maximum participation of indigenous Ghanaians, increasing local capacity and also safeguarding the interest of foreign participants in the oil and gas sector.
The Regulations apply to contractors, subcontractors, service providers, licensees and allied entities in the petroleum sector. The Regulations provide minimum thresholds for indigenous equity participation in petroleum activities.
A key provision under the Regulations is the requirement of 5 per cent indigenous participation in petroleum agreements. This is, however, subject to negotiation and the approval of the Minister. Service providers in the sector must have a minimum of 10 per cent Ghanaian ownership. Other provisions include the requirement for the development and approval of local content plans, which must at the minimum include sub-plans on employment and training, research and development, technology transfer, legal and financial services. In respect of legal services, operators are required to use the services of only Ghanaian lawyers or law firms for legal services required in Ghana. The oil companies are required to submit regular reports on their levels of compliance to the local content committee, which is set up to oversee the implementation of the regulations and to ensure measurable and continuous growth in local content in the petroleum sector.
Petroleum (Exploration and Production) (General) Regulations, 2018 (LI 2359)
LI 2359 came into force in June 2018. The Regulations provide for the procedures and conditions for the grant of a petroleum agreement including qualification requirements, terms and conditions for open and competitive tendering procedures and direct negotiations. The Regulations mandate the Minister acting in collaboration with the Commission as well as other relevant agencies to prepare a strategic assessment plan for the opening up of areas for petroleum activities. It also indicates that the initial participating interest of the GNPC in relation to exploration and development shall be a carried interest, and in the case of production operations, an additional participation interest. Other relevant provisions include the procedure for licensing and the criteria for grant of licences, change of ownership and operating standards under a petroleum agreement.
The Petroleum Exploration and Production-Data Management Regulation, 2017 (LI 2257)
The Regulations apply to the reporting and management of petroleum data obtained from the conduct of petroleum activities within Ghana. This includes the receipt, interpretation and analysis of petroleum data, provision of a safe environment for storage of petroleum data submitted, efficient management of the data and the documentation and reporting for information related to acquisition and submission of petroleum data. The purpose of these Regulations is to specify the format, content and standards required for the preparation and submission of geological, geophysical and production data related to petroleum activities to support efficient exploration of petroleum resources in Ghana.
The Petroleum (Exploration and Production) (Health, Safety and Environment) Regulations, 2017 (LI 2258)
LI 2258 applies to all petroleum operations. Among others, it aims to prevent the adverse effects of petroleum activities on health, safety and the environment and promotes high standards of health and safety. It provides the minimum health and safety requirements applicable to contractors, subcontractors and other players within the industry. The key regulations relate to design and operation of facilities, systems and equipment, maritime facilities, load-bearing structures, drilling and well systems, emissions and discharges, decommissioning, risk analysis and emergency preparedness and reporting.
The Petroleum Revenue Management Act, 2011 (Act 815) as amended
This Act was also enacted after the Jubilee Fields discovery to provide a regime for the collection, allocation and management of petroleum revenue in a transparent, accountable and sustainable manner for the benefit of the citizens of Ghana. The Act establishes a number of funds – the Petroleum Holding Fund, the Ghana Stabilisation Fund and the Ghana Heritage Fund – and indicates how revenues accruing from petroleum operations to the state are to be disbursed and utilised. All the funds created under the Act are public funds and may not be encumbered, used to provide credit or collateral for the state or private entities. The Act also prohibits borrowing against petroleum reserves.
The Petroleum Revenue (Amendment) Act, 2015 (Act 839) was enacted to amend the Petroleum Revenue Management Act 2011. The amendment provides for the allocation of funds to the Ghana Infrastructure Investment Fund for the purposes of infrastructure development, the establishment of the Investment Advisory Committee and other related matters.
Petroleum (Exploration and Production) (Measurement) Regulations, 2016 (LI 2246)
LI 2246 came into force in November 2016 for the main purpose of ensuring that an accurate measurement and allocation of petroleum forms the basis for the determination of revenue that accrue to the parties to a petroleum agreement. It applies to the planning, design, testing, calibration, operation and maintenance of metering systems as well as equipment and methods for measuring the quantities of oil and gas produced, transported and sold. The Petroleum Commission is mandated under this regulation to supervise and inspect metering and allocation systems from the design to operation stage. These Regulations also permit an authorised agency to place a seal on export valves downstream of a metering station to prevent offloading of petroleum without authorisation.
Petroleum Commission Fees and Charges Regulations, 2015 (LI 2221)
These Regulations provide the framework for determining the applicable fees to be paid by participants in petroleum activities to the Petroleum Commission for various activities including permitting, third-party access over a facility that is owned by a contractor, registration of assignment of interest or transfer of shares, and registration of encumbrances over participating interest in petroleum agreements. Other costs include expenses and costs incurred by the Petroleum Commission in conducting its regulatory and supervisory services as well as fees for extension of exploration working periods and appraisal periods.
ii RegulationGovernment of Ghana (through the Ministry of Energy)
The 1992 Constitution vests all petroleum resources in the president of Ghana as the head of the executive branch of government. The presidency expresses its ownership and control over oil and gas activities through the Ministry of Energy. The mandate of the Ministry of Energy includes the formulation, implementation and monitoring of national policies for the sector. The Ministry is the driver of government policy and has the overall responsibility to provide policy direction on oil and gas matters based on advice from the Petroleum Commission.
The Ministry receives applications from prospective contractors, negotiates terms of petroleum agreements and grants the right to explore, develop and produce oil and gas products. It is also responsible for granting consent for the transfer of petroleum rights and resolving disputes between the Petroleum Commission and contractors (prior to resorting to other dispute resolution options).
Parliament
The 1992 Constitution requires all petroleum agreements to be ratified by Parliament. Parliament may also exempt particular transactions or agreements from ratification. These exemptions must be supported by the resolution of at least 75 per cent of the members of Parliament.
Petroleum Commission
As indicated above, the Petroleum Commission is established under Act 821 as an upstream petroleum regulator. The functions of the Petroleum Commission include:
- promoting planned, well-executed, sustainable and cost-efficient petroleum activities;
- recommending to the Minister national policies on petroleum activities;
- monitoring compliance with national policies, laws, regulations and agreements;
- complying with health, safety and environmental standards in petroleum activities;
- promoting local content and local participation in petroleum activities; and
- receiving applications and issuing permits for specific petroleum activities.
Ghana became a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) on 9 April 1968. It is also a signatory to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, which was ratified on 13 July 1966 and entered into force on 14 October 1966. Under the Alternative Dispute Resolution Act 2010 (Act 798), a foreign arbitral award is enforceable by the court if it is satisfied, inter alia, that the award was made under the New York Convention or other international convention ratified by Parliament.
In addition, the enforcement of foreign judgments in Ghana is based on the doctrine of reciprocity. On this basis, final judgments from Brazil, France, Israel, Italy, Japan, Lebanon, Senegal, Spain, the United Arab Emirates and the United Kingdom are enforceable in Ghana. For countries that do not have reciprocity, a fresh action must be instituted on the basis of the foreign judgement.
Further, Ghana has signed bilateral investment treaties (BITs) with over 25 countries; however, only eight of these BITs have been ratified. Countries with which Ghana has ratified BITs are China, Denmark, Germany, Malaysia, the Netherlands, Serbia, Switzerland and the United Kingdom.
In respect of taxation, Ghana has signed and ratified double taxation agreements with the Netherlands, Mauritius, Czech Republic, Switzerland, Belgium, Denmark, France, Germany, Italy, South Africa and the United Kingdom.
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