1 Legal and regulatory framework

1.1 What role does the national state play in the oil and gas industry in your jurisdiction? Are oil and gas rights owned by the state or is private ownership allowed?

Petroleum existing in its natural state is owned collectively by the people of Ghana and is vested in the president on their behalf. Section 3 of the Petroleum (Exploration and Production) Act, 2016 (Act 919) specifically states that: "petroleum existing in its natural state in, under or upon any land in Ghana, rivers, streams, water courses throughout Ghana, the exclusive economic zone and any area covered by the territorial sea or continental shelf 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." The minister responsible for energy may, on behalf of the government, grant a private person a right to explore, develop or produce petroleum by negotiating and entering into a petroleum agreement for that purpose in accordance with Section 10 of the Petroleum (Exploration and Production) Act.



1.2 Which national legislative and regulatory provisions govern the oil and gas industry in your jurisdiction?

The primary laws governing the oil and gas industry are as follows:

  • the Constitution of the Republic of Ghana;
  • the Petroleum (Exploration and Production) Act;
  • the Petroleum Commission Act, 2011 (Act 821);
  • the Ghana National Petroleum Corporation Act, 1983 (PNDCL 64);
  • the Petroleum Revenue Management Act, 2011 (Act 815);
  • the Environmental Protection Agency Act, 1994 (Act 490);
  • the Income Tax Act, 2015 (Act 896);
  • the Companies Act, 2019 (Act 992); and
  • the Ghana Investment Protection Centre Act, 2013 (Act 865).

The primary regulations governing the oil and gas industry are as follows:

  • the Environmental Assessment Regulations, 1999 (LI 1652);
  • the Petroleum (Local Content and Local Participation) Regulations, 2013 (LI 2204);
  • the Petroleum Commission (Fees and Charges) Regulations, 2015 (LI 2221);
  • the Petroleum (Exploration and Production) (Measurement) Regulations, 2016 (LI 2246);
  • the Petroleum (Exploration and Production) (Data Management) Regulations, 2017 (LI 2257);
  • the Petroleum (Exploration and Production) (Health, Safety and Environment) Regulations, 2017 (LI 2258);
  • the Petroleum (Exploration and Production) (General) Regulations, 2018 (LI 2359); and
  • the Petroleum Revenue Management Regulations, 2019 (LI 2381).


1.3 What other national legislative and regulatory provisions have relevance for oil and gas activities in your jurisdiction?

Other laws, regulations and guidelines that are relevant to the oil and gas industry include the following:

  • the Labour Act, 2003 (Act 651);
  • the Immigration Act, 2000 (Act 573);
  • the Ghana Education Trust Fund Act, 2000 (Act 581);
  • the National Health Insurance Act, 2012 (Act 852);
  • the Value Added Tax Act, 2013 (Act 870);
  • the COVID-19 Health Recovery Levy Act, 2021 (Act 1068);
  • the Foreign Exchange Act, 2006 (Act 723);
  • the National Pensions Act, 2008 (Act 766);
  • the Basic National Social Security Scheme Regulations, 2011 (LI 1989);
  • the Internal Revenue (Registration of Business) Act, 2005 (Act 684);
  • the Local Governance Act, 2016 (Act 936);
  • the Revenue Administration Act, 2016 (Act 915);
  • the Maritime Pollution Act, 2016 (Act 932);
  • the Ghana Shipping (Protection of Offshore Operations and Assets) Regulations, 2012 (LI 2010);
  • the Special Import Levy Act, 2013 (Act 861);
  • the Stamp Duty Act, 2005 (Act 689);
  • the Customs Act, 2015 (Act 891);
  • the Customs Regulations, 2016 (LI 2248); and
  • the Offshore Oil and Gas Development in Ghana, Guidelines for Environmental Assessment and Management, 2011.


1.4 Are there any regional treaties or laws that need to be taken into account?

No.



1.5 Which national regulatory bodies are responsible for enforcing the applicable laws and regulations? What powers do they have?

The main regulators responsible for enforcing the applicable laws and regulations are as follows.

Petroleum Commission: Established by the Petroleum Commission Act, 2011 (Act 821), the Petroleum Commission is the regulator of Ghana's upstream petroleum sector. Its functions include:

  • promoting planned, well-executed, sustainable and cost-efficient petroleum activities to achieve optimal resource exploitation for the benefit and welfare of Ghana's citizens;
  • monitoring petroleum activities and carrying out audits and inspections as necessary;
  • recommending national policies related to petroleum activities and field development plans to the minister responsible for energy;
  • ensuring compliance with national policies, laws, regulations and agreements related to petroleum activities;
  • promoting local content and local participation to strengthen national development; and
  • receiving applications and issuing permits for petroleum activities as required.

The Petroleum Commission's approval is required for activities such as the following:

  • a change of ownership of a subcontractor's local company;
  • entry into a petroleum subcontract; and
  • the extension of working periods constituting the exploration period under a petroleum agreement.

Ghana Revenue Authority: The Ghana Revenue Authority was established by the Ghana Revenue Authority Act, 2009 (Act 791) as the tax authority to administer and give effect to the tax laws. The Ghana Revenue Authority is charged with assessing and collecting taxes, interest and penalties on taxes due to Ghana, and paying the amounts collected into the constitutionally established Consolidated Fund.

Environmental Protection Agency: The Environmental Protection Agency was established under the Environmental Protection Agency Act, 1994 (Act 490) as the regulatory authority charged with ensuring compliance with environmental impact assessment procedures in the planning and execution of development projects. Among other things, it is mandated to:

  • advise the minister responsible for the environment on environmental policies;
  • issue environmental permits; and
  • prescribe standards and guidelines relating to pollution.


1.6 What is the national regulators' general approach in regulating the oil and gas industry?

The Petroleum Commission, the Ghana Revenue Authority and the Environmental Protection Agency are tough in regulating the oil and gas industry, and strictly impose penalties if they find that laws, regulations or guidelines have been breached.



1.7 What role do provincial, state and/or other local government regulatory bodies play in the regulation of the oil and gas industry?

Ghana is a unitary state. Local government bodies do not play a role in the regulation of the oil and gas industry.



2 Oil and gas industry

2.1 How mature is the oil and gas industry in your jurisdiction?

Ghana has had a long history of exploration activities, dating back to 1896. The first documented discovery well, WAOFCO-2, was drilled in 1986 by the West African Fuel Company to a total depth of approximately 35 metres.

Ghana's first commercial oil and gas production began in the Saltpond Field in 1978 and peaked at 4,500 barrels of oil per day during its production stages until 1985, when it was shut down. Exploratory activities increased with the establishment of the Ghana National Petroleum Corporation in 1983; and from 1983 to 2007 (when Ghana made its first major discovery), over 30,000 kilometres (km) of 2D and over 5,000km of 3D seismic data was acquired.

The Tullow Ghana Limited consortium made a significant discovery in 2007 and Kosmos Energy Ghana HC also made a significant discovery in 2008. It later became apparent that the petroleum field straddled two contract areas: Deepwater Tano, operated by Tullow; and West Cape Three Points, operated by Kosmos. This necessitated the negotiation and execution of a unitisation and unit operating agreement, and Tullow was appointed the operator of the unitised Jubilee Field in 2008. In 2010, first oil was achieved from the Jubilee Field. In addition to the Jubilee Field, Ghana has two other producing fields:

  • the Tweneboa–Enyenra-Ntomme field in respect of the Deepwater Tano contract area, which is operated by Tullow; and
  • the Sankofa and Gye Nyame field in the Offshore Cape Three Points contract area, which is operated by Eni Ghana Exploration and Production Limited.

First oil was achieved in 2016 and 2017, respectively.



2.2 What are the key oil and gas products which are produced in your jurisdiction and where are activities typically based?

The Tema Oil Refinery, located in the city of Tema, is the state-owned refinery in Ghana. With a 45,000 barrel per stream day capacity crude distillation unit (although currently operating at just under half of its capacity), the Tema Oil Refinery produces the following:

  • liquefied petroleum gas;
  • gasoline (petrol);
  • kerosene;
  • aviation turbine kerosene;
  • gasoil (diesel);
  • residual fuel oil;
  • premix;
  • naphtha; and
  • condensates.

Crude oil and natural gas are also produced through upstream production activities located off the western coast of Ghana.



2.3 Who are the key players in the oil and gas industry in your jurisdiction?

The major contractors in the oil and gas industry are:

  • Tullow;
  • Eni;
  • Vitol;
  • Kosmos Energy;
  • Anadarko; and
  • Aker Energy.

The national oil company, Ghana National Petroleum Corporation, being a required party to each petroleum agreement, is also a major player in the industry. Major service companies include:

  • Schlumberger;
  • Halliburton;
  • Modec;
  • Rigworld; and
  • Technip.


2.4 How are the following reflected in the domestic energy mix?
(a) Oil and gas
(b) Imports and exports?

(a) Oil and gas

Ghana relies on a diversified energy mix with supply sources from hydroelectricity, thermal fuel, natural gas, biomass, diesel, solar and imports of crude oil.

According to the National Energy Statistics 2020, published by the Energy Commission, oil and gas contributed 34% and 25% respectively to Ghana's total energy supply in 2020.

(b) Imports and exports

As reported in the National Energy Statistics 2020, the total crude oil exported in 2020 was 67,458,000 barrels; while 4,843,000 barrels were imported. In the case of natural gas, 24.4 trillion British thermal units (tbtu) were imported and 95.2 tBtu of natural gas was produced locally (natural gas produced locally is not exported).



3 Exploration and production

3.1 What rights are required to undertake exploration and production in your jurisdiction? Do these vary depending on the type or location of the activity?

Pursuant to Section 10 of the Petroleum (Exploration and Production) Act, a petroleum agreement is required to engage in exploration, development and production of oil and gas. The parties to a petroleum agreement are:

  • the contractor or contractor parties;
  • Ghana National Petroleum Corporation; and
  • the government, represented by the minister responsible for energy.

The requirement for a petroleum agreement is not dependent on the type or location of the exploration or production activity. Thus, any private person intending to explore, develop and produce petroleum in Ghana must enter into a petroleum agreement for that purpose.



3.2 What regulatory or contractual requirements must be satisfied to obtain exploration and production rights?

A petroleum agreement must be entered into through either competitive tendering or direct negotiation where the minister responsible for energy (in consultation with the Petroleum Commission) determines that this is the most efficient manner to achieve optimal exploration, development and production of the petroleum resource in a defined area.

Under Section 70 of the Petroleum (Exploration and Production) Act, a contractor must incorporate a company in Ghana to carry out petroleum activities. The company must be a signatory to the petroleum agreement. Although this has not yet been implemented, the minister responsible for energy may also stipulate specific requirements for the structure and capital requirements of the company. Additionally, the company must have the requisite technical competence and financial capability to fulfil the obligations of the petroleum agreement.

A constitutional requirement for the effectiveness of a petroleum agreement is ratification by Parliament. Regarding the apportionment of interests in each petroleum agreement, Ghana National Petroleum Corporation must:

  • hold a minimum 15% initial participating carried interest in exploration and development (E&D) operations; and
  • have the option to acquire an additional participating interest, exercisable within a specified period following the declaration of commercial discovery, with respect to production operations.

In the case of Ghana National Petroleum Corporation's carried interest, the contractor will pay for the E&D costs without any entitlement to reimbursement from the government. However, the additional participating interest is a paying interest.



3.3 If there is state ownership of oil and gas rights in your jurisdiction, what is the procedure for obtaining exploration and production rights? How long does this typically take?

The minister responsible for energy must publish an invitation to tender or for direct negotiations in the Gazette, at least two state-owned daily newspapers and any other medium of public communication. A body corporate seeking to participate must submit an expression of interest. The tender process involves:

  • an expression of interest;
  • an invitation to tender;
  • submission of bids;
  • evaluation of bids based on objective criteria;
  • a decision on bids; and
  • entry into a petroleum agreement.

The royalty to be paid under a petroleum agreement must be specified in the tender documents as a biddable fiscal term or indicated in the relevant documents for direct negotiation. Bonus payments must also be specified by the minister responsible for energy or competitively tendered. The deadline for submitting bids must be at least 120 days from publication of the invitation. The process may be preceded by a pre-qualification process.

If, following publication of an invitation to tender or for direct negotiations, no other prospective bidder expresses interest in the area within 30 days, direct negotiations may commence. Otherwise, the tender process must be complied with. The invitation must identify the relevant blocks and contain the bid evaluation criteria and the schedule for negotiation. Where the minister responsible for energy is of the view that a public tender is not the most expedient mechanism for entering into a petroleum agreement, the minister responsible for energy must publish the reasons, the relevant area and the potential contractor, as prescribed.

The timeline for the tender or negotiation must be stated in the relevant invitation.



3.4 Who can own exploration and production rights in your jurisdiction? Do specific requirements or restrictions apply to foreign operators? Do any indigenous ownership requirements apply?

Both foreign and indigenous investors can own exploration and production rights in Ghana. However, every contractor under a petroleum agreement must incorporate a local company to solely carry out petroleum activities. The locally incorporated company must be a signatory to the petroleum agreement and maintain a local office in Ghana managed by a representative with full authority to act and enter into binding commitments. A foreign investor must, however, comply with additional requirements under the Ghana Investment Promotion Centre Act, 2013 (Act 865). Specifically, it must register its locally incorporated company with the Ghana Investment Promotion Centre and provide a minimum capital by way of an equity investment in cash or capital goods relevant to the investment, or both. The minimum capital investment is as follows:

  • for a wholly foreign-owned entity, $500,000; and
  • for a joint venture company with a citizen of Ghana, $200,000. Additionally, the citizen must hold a minimum equity interest of 10% in the joint venture company in accordance with Section 27 of the Ghana Investment Promotion Centre Act.

Regarding indigenous ownership requirements, the law requires an indigenous Ghanaian company to be given first preference in the grant of a petroleum agreement. An IGC is a locally incorporated company that has:

  • at least 51% of its equity owned by a citizen of Ghana; and
  • Ghanaian citizens holding at least 80% of executive and senior management positions and 100% of non-managerial and other positions.

An indigenous Ghanaian company must, with limited exception, hold at least 5% equity participation in a petroleum agreement as provided under Regulation 4(2) of the Petroleum (Local Content and Local Participation) Regulations, 2013 (LI 2204).



3.5 If there is state ownership of oil and gas rights in your jurisdiction, what fees and other charges are incurred in obtaining exploration and production rights?

In the case of competitive tendering, the invitation to submit applications for pre-qualification and the invitation for a bid must state the applicable fees.



3.6 What is the duration of exploration and production rights? What is the process for renewal?

A petroleum agreement is granted for up to 25 years, with an exploration period of no more than seven years from the effective date, unless extended by the minister responsible for energy. The exploration period comprises an initial exploration period and up to three extension periods. A contractor may move to a subsequent working period only on the fulfilment of the minimum work obligations for that working period.

The seven-year exploration period may be extended in limited circumstances where:

  • petroleum is discovered in the last year of the exploration period, necessitating an extension for appraisal purposes; or
  • at the end of a final working period of exploration, the contractor is drilling or testing a well, or appraising a discovery.

The minister responsible for energy may extend the term of a petroleum agreement where production from a field is projected to extend beyond the original term of the petroleum agreement or, in lieu of an extension, may execute a new petroleum agreement by direct negotiation. An extension application must be made no later than five years before the expiration of the existing petroleum agreement, unless otherwise determined by the minister responsible for energy. A decision on an application for extension of a petroleum agreement must be made within one year of receipt of the application. In making the decision, the minister responsible for energy will take into consideration the contractor's ability to ensure optimal resource exploitation and capability. An extended petroleum agreement is subject to parliamentary ratification.



3.7 What are the operator's rights and obligations under exploration and production rights?

Under the Petroleum (Exploration and Production) Act, a contractor must conduct petroleum activities in accordance with the applicable laws, best international practices and sound economic principles. As required by the minister responsible for energy, a contractor must provide performance bonds or guarantees for the fulfilment of its obligations and meet the domestic supply requirement as determined. A contractor must fulfil its minimum work and expenditure obligations for each working period. On a failure to do so within the stipulated timeframe, and absent an extension by the Petroleum Commission, the contractor must pay Ghana National Petroleum Corporation the amount required to complete the work programme. A contractor must further disclose to the minister responsible for energy, the Petroleum Commission and Ghana National Petroleum Corporation all agreements relating to the petroleum operations. These agreements must not be inconsistent with the provisions of the petroleum agreement. Contractors must keep all information and data obtained from petroleum operations confidential.

Under the terms of the Model Petroleum Agreement, a contractor has the right, subject to compliance with the applicable law, to, among other things:

  • use public lands for installation and operation of shore bases, terminals, harbours, pipelines from fields to terminals and delivery facilities, camps and other housing;
  • obtain licences and permissions to install and operate communication, processing, storage and transportation facilities necessary for its operations;
  • engage national and expatriate subcontractors and consultants, and expatriate employees that it deems necessary for its operations; and
  • access its offices in Ghana, the contract area and the facilities associated with its petroleum operations in Ghana.


3.8 Are there any requirements re relinquishment of exploration and production rights or part of the area covered by such rights?

Yes, Section 22 of the Petroleum (Exploration and Production) Act requires a contractor that enters into a first extension period of the exploration period to relinquish at least 50% of the contract area. A contractor that enters into a second or third extension period may retain only 25% of the contract area. However, in exceptional circumstances, the minister responsible for energy – in consultation with the Petroleum Commission and taking into account the size, location and nature of the contract area – may determine that the area to be relinquished should be smaller than what has been prescribed. In advising the minister responsible for energy, the Petroleum Commission must approve a corresponding work programme which provides for the drilling of at least one firm well. Additionally, the area relinquished by the contractor must be contiguous, compact and of a size and shape that permit the effective conduct of petroleum activities in the area.

The requirement to relinquish portions of the contract area does not affect a discovery area or a development and production area.



3.9 Can exploration and production rights be transferred or assigned? If so, how and subject to what government consents? Do any fees, taxes or other charges apply to direct or indirect transfers?

Yes, an exploration and production right can be assigned in accordance with Section 16 of the Petroleum (Exploration and Production) Act. A direct or indirect assignment of the interest of a contractor under a petroleum agreement (in whole or part) requires the prior written approval of the minister responsible for energy, and if required under the terms of the petroleum agreement, the consent of Ghana National Petroleum Corporation. The assignment must be registered with the Petroleum Commission on payment of a fee of 1% of the value of consideration of the interest assigned, capped at $1 million. Corporate tax is payable on a gain from the realisation of the contractor's interest at a rate of 35%.

An application for ministerial approval must include:

  • the final terms and conditions for the assignment;
  • evidence of the qualifications of the proposed assignee; and
  • an unconditional undertaking by the assignee to assume all obligations from the assigned participating interest, following ministerial approval.

Where the assignment is of an interest under a petroleum agreement without IGC participation, it must result in an IGC acquiring at least a 5% participation under the petroleum agreement. The minister responsible for energy may also impose conditions for the assignment.

On entering into an agreement to assign its interest under a petroleum agreement, the contractor must immediately notify the minister responsible for energy, the Petroleum Commission and Ghana National Petroleum Corporation. The assignment is subject to Ghana National Petroleum Corporation's pre-emption right to acquire the interest on the same terms as agreed with the potential assignee, and Ghana National Petroleum Corporation must give notice of its election to exercise its pre-emption right to the contractor within 90 days of receipt of the notice.



3.10 Can security be taken over exploration and production rights?

Yes, subject to the written approval of the minister responsible for energy, a contractor may mortgage its participating interest under a petroleum agreement in accordance with Section 57 of the Petroleum (Exploration and Production) Act. The mortgage must be registered in the petroleum register, on payment of a fee of 0.25% of the value of the participating interest being mortgaged, capped at $1 million in accordance with the Petroleum Commission (Fees and Charges) Regulations, 2015 (LI 2221).

The government/Ghana National Petroleum Corporation, however, cannot assign its interest in a petroleum agreement because Section 5 of the Petroleum Revenue Management Act, 2011 (Act 815) prohibits borrowing against petroleum reserves or using amounts in the Petroleum Holding Fund as collateral for debts, guarantees, commitments or other liabilities. The Petroleum Holding Fund is a statutory public fund into which all revenue accruing to the government from petroleum operations are paid. Also, Section 41(2) of the Petroleum Revenue Management Act renders void any agreement by the government to encumber the assets of the petroleum funds (ie, the Petroleum Holding Fund and other statutory public funds into which revenue from the PHF must be disbursed). However, the government is permitted until 2021 to use as collateral for its debts and other liabilities the annual budget funding amount (ie, the amount of petroleum revenue allocated for spending in the current financial year). Ghana National Petroleum Corporation may also grant security over its receivables from the PHF.

A security instrument must be stamped and registered to be enforceable. The rate of stamp duty is 0.5% or 0.25% of the value of the security created for a principal security or any additional security, respectively, in accordance with the Stamp Duty Act, 2005 (Act 689). The security agreement must be registered with the Companies Registry and the Collateral Registry in accordance with the applicable laws.



3.11 What contractual or regulatory provisions apply with regard to cessation of exploration and production or abandonment of exploration and production rights?

Under Section 46 of the Petroleum (Exploration and Production) Act, a contractor that intends to abandon a well must notify the Petroleum Commission and upon approval, plug and abandon the well in a manner consistent with international best practices and approved by the Petroleum Commission. The notice must include:

  • details on how the well is to be plugged;
  • a report on how the relevant regulatory health, safety and environment requirements have been complied with; and
  • the proposed method, scope and timing for the survey of wells plugged and abandoned, as provided in Regulation 62 of the Petroleum (Exploration and Production) (General) Regulations, 2018 (LI 2359).

The Petroleum Commission may impose conditions that it considers necessary for the abandonment.

Pursuant to Section 61A of the Petroleum (Exploration and Production) (General) Regulations and Section 43 of the Petroleum (Exploration and Production) Act, a contractor that operates a petroleum facility is responsible for decommissioning that facility and must submit a decommissioning plan to the minister responsible for energy for approval within five to two years before:

  • the use of the relevant facility is expected to permanently cease; or
  • the expiration of the relevant petroleum agreement.

The decommissioning plan must include:

  • an assessment of the environmental and social impact of each of the forms of disposal proposed in the plan; and
  • mitigation plans against inconvenience to third parties, taking into consideration the potential health, safety and environmental impact.

Following implementation of a decommissioning plan, a contractor must submit a report to the minister responsible for energy on the work carried out. A contractor must also make contributions into a decommissioning fund as provided in the relevant petroleum agreement.



4 Surface rights

4.1 Does the law of your jurisdiction distinguish between exploration and production rights and surface rights? If so, how does an owner of exploration and production rights acquire surface rights?

The law distinguishes between mineral rights and surface rights. Pursuant to Section 21 of the Land Act, 2020 (Act 1036), an instrument that disposes of land does not have the effect of granting a right or title to or an interest in natural resources in, under or on the land. A contractor to a petroleum agreement need not also hold the surface rights in order to enter and exercise its rights in respect of a contract area. The petroleum agreement is the only authorisation required. Thus, there is no practical reason for acquiring a surface right over the exploration and production area. However, to acquire surface rights, the holder of an exploration and production right must independently negotiate with the surface right holder. Most of Ghana's oil blocks are, however, located offshore where the government exercises its sovereign rights over the exclusive economic zone and the continental shelf in accordance with Sections 5 and 6 of the Maritime Zones (Delimitation) Act, 1986 (PNDCL 159).

Before entering onto land, the contractor must engage the communities in the area subject to its petroleum agreement, to ensure that the landowners are adequately informed of:

  • the type of activity to be engaged in;
  • the duration of such activity; and
  • potential damage to property.

The contractor must also:

  • notify the Petroleum Commission in writing of its intentions at least three months before making the entry; and
  • obtain the necessary approvals and permits before commencing upstream petroleum activities onshore, in accordance with Regulation 35 of the Petroleum (Exploration and Production) (Health, Safety and Environment) Regulations, 2018 (LI 2258).


4.2 Where surface rights are acquired, what are the operator's rights and obligations as regards the landowner? And what are the landowner's rights and obligations as regards the operator?

Where the holder of exploration and production rights acquires surface rights pursuant to a lease, the rights of the landowner and the operator will be subject to the terms of the lease. The Land Act stipulates some implied covenants on the transferor and transferee of an interest in land. In the case of the transferee, these include:

  • paying rent;
  • refraining from doing or permitting anything to be done on the premises that will be a nuisance or annoyance or cause damage to the transferor or neighbours; and
  • obtaining the written consent of the landowner to assign the premises, erect new buildings or make alterations to existing buildings on the premises.

In the case of the transferor, the implied covenants include:

  • a covenant for quiet enjoyment, freedom from encumbrances and further assurances in respect of the subject matter of the conveyance; and
  • in the case of a sublease of a leasehold interest, a covenant relating to the observance of the headlease.

Although there is no prescribed procedure for acquiring surface rights, in the case of an onshore contract area, the practice is for the relevant contractor to adequately compensate surface right holders that are displaced or disturbed by its petroleum operations.



4.3 Is there a process for the mandatory acquisition of surface rights? If so, what does this involve?

There is no prescribed process for the compulsory acquisition of surface rights by a contractor, but there is for compulsory acquisition by the state. A contractor under a petroleum agreement need not acquire the surface rights to enter and exercise its rights in a contract area. The petroleum agreement is the only authorisation required.

Pursuant to Article 20 of the Constitution, the state may compulsorily acquire surface rights subject to compliance with the following conditions:

  • the acquisition must be for a public purpose;
  • the need for the acquisition must be clearly stated and must provide reasonable justification for causing any resultant hardship; and
  • the acquisition must be made pursuant to a law that provides for the prompt payment of fair and adequate compensation and affords a right of access to the High Court of Ghana by anyone with an interest in or right over the property, for the determination of that person's interest or right and the amount of compensation to which that person is entitled.

Where the acquisition involves the displacement of any inhabitants, they must be resettled on suitable alternative land, taking into account their economic well-being and social and cultural values.

In practice, since the state has rights over mineral resources, it does not compulsorily acquire land for mineral explorations or development. The state, acting through the relevant sector minister, will grant exploration or exploitation rights and the holder of the right will be required to compensate any person affected by its operations.



4.4 Are any native title issues applicable?

No.



4.5 Are any other rights needed to use the land (eg, zoning permissions or planning requirements)?

Yes. In accordance with Section 181 of the Local Governance Act, 2016 (Act 936) the various district assemblies have the power to make bylaws. In exercise of this power, the various metropolitan, municipal and district assemblies have made bylaws which require persons seeking to carry on business in or upon any premises within the district to:

  • obtain a business operating permit prior to commencement of business in or upon premises within the district; and
  • pay annual business operating levies in respect of its businesses.

Additionally, pursuant to Section 113 of the Land Use and Spatial Planning Act, 2016 (Act 925), a person requires a permit from the district authority where land is situated to undertake any physical development of the land.



5 Processing, refining and export

5.1 What requirements and restrictions apply with regard to the processing and refining of oil and gas?

A licence issued by the National Petroleum Authority is required to engage in the commercial activities of processing, refining and storage of petroleum. Pursuant to a National Petroleum Authority notice, authorisation to construct a refinery must be procured in three stages:

  • a licence to establish a refinery;
  • a permit to construct a refinery; and
  • a licence to operate a refinery.

A licence issued by the Energy Commission is required to install and operate facilities to process and store natural gas.

To qualify for an Energy Commission or National Petroleum Authority licence, an applicant must be:

  • a citizen of Ghana;
  • a body corporate registered under the Companies Act, 2019 (Act 992); or
  • a partnership registered under the Incorporated Private Partnerships Act, 1962 (Act 152).

A National Petroleum Authority licence may also be issued to a foreign individual or foreign company in a registered joint venture relationship with a citizen of Ghana or a Ghanaian company.

The licences are subject to the conditions stated therein and, subject to compliance with these conditions, may be renewed for a further term. The licences may not be transferred without the prior approval of the issuing authority; and may be suspended or revoked, or a renewal application denied, on grounds including:

  • failure to satisfactorily comply with the requirements of the National Petroleum Authority Act, 2005 (Act 691) or the Energy Commission Act, 1997 (Act 541), as applicable;
  • non-compliance with the licence conditions; and
  • contravention of a provision of the National Petroleum Authority Act or Energy Commission Act, as applicable.


5.2 What requirements and restrictions apply to the export of oil and gas?

A contractor is authorised by the Petroleum (Exploration and Production) Act to export petroleum which it is entitled to export under the terms of the petroleum agreement, subject to compliance with the domestic supply requirement and the needs of the country in exigent circumstances. A contractor must also comply with the relevant customs supervision and other export requirements. These include the filing of:

  • a cargo report to the Ghana Revenue Authority in advance of the export;
  • an application for clearance; and
  • an export declaration covering the relevant transportation data in accordance with Regulation 127 of the Customs Regulations, 2016 (LI 2248).


6 Transport and storage

6.1 What requirements and restrictions apply with regard to the transport and storage of oil and gas? Do these vary in the case of cross-border transportation?

Pursuant to Section 38 of the Petroleum (Exploration and Production) Act, a licence issued by the minister responsible for energy is required to install or operate a facility to transport and store petroleum, except where an existing right to install and operate the facility is derived from a contractor's approved plan of development and operation. Factors considered in the grant of the licence include:

  • the financial strength of the applicant;
  • its technical competence;
  • the proposed project as presented;
  • the proposed levels of local content; and
  • the relevant training and technology support.

The minister responsible for energy determines the duration of the licence on the basis of factors including:

  • the estimated design life and expected duration of the facility; and
  • third-party access in accordance with Regulation 53 of the Petroleum (Exploration and Production) (General) Regulations.

The licence may be subject to conditions determined by the minister responsible for energy and may include directives:

  • to tie the facility to another facility;
  • to increase the capacity of the facility;
  • to modify the facility to enable its use for different types of petroleum; and
  • on the type of petroleum to be transported, treated or stored, as provided in Section 40 of the Petroleum (Exploration and Production) Act.

Further, Regulation 45 of the Petroleum (Exploration and Production) (Health, Safety and Environment) Regulations requires all persons engaged in petroleum activities to store crude oil in such a manner as to avoid spillage and contamination of water bodies and ground water. Additionally, permanent tanks used to store petroleum liquids must be designed and constructed in a safe and prudent manner.

There are no additional local requirements for the cross-border transportation of oil and gas.



6.2 What requirements and restrictions apply to the construction and operation of transport and storage infrastructure?

Pursuant to Regulations 54 to 60 of the Petroleum (Exploration and Production) (General) Regulations, the design, construction, installation, supply and maintenance of a facility must be in accordance with the applicable law or the approved plan of development and operation. A permit issued by the Petroleum Commission is required to construct or install the facility. Upon completion, a permit issued by the Petroleum Commission is required, among other things, to:

  • commence operation of the facility or a part thereof; and
  • change the purpose for which the facility was originally approved.

Additionally, a safety permit issued by the Ghana Maritime Authority is required to site and operate a storage facility or other structure on the seabed.

A third party that intends to carry out an activity across, on, along or under a pipeline must:

  • obtain the prior written consent of the contractor; and
  • duly inform the minister responsible for energy of the application and its decision.

Where consent is given, this may be subject to conditions necessary for the safety and security of the pipeline and the protection of the property, environment, its employees and the public. On the cessation of operations, the contractor must ensure that the pipeline is cleaned and left in a safe condition. A permit issued by the Petroleum Commission is required to recommence operations. Further, the minister responsible for energy may direct a licensee to change the operator under a licence to install and operate a transportation or storage facility where the operator ceases to meet the material requirements of the licence.



7 Environmental issues

7.1 What environmental authorisations are required to undertake oil and gas activities in your jurisdiction? Do these vary depending on the type or location of the activity?

Pursuant to Regulation 1 of the Environmental Assessment Regulations, 1999 (LI 1652) registration with, and the issuance of an environmental permit by the Environmental Protection Agency are required to commence an undertaking that is likely to have an adverse effect on the environment. An environmental certificate must also be obtained from the Environmental Protection Agency within 24 months of the commencement of operations in accordance with Regulation 22 of the Environmental Assessment Regulations. The Environmental Protection Agency will issue an environmental certificate subject to conditions determined by it, provided that the person responsible for the undertaking has submitted to it, evidence or confirmation of:

  • actual commencement of operations;
  • acquisition of other permits and approvals where applicable;
  • compliance with mitigation commitments indicated in the environmental impact; statement or preliminary environmental report; and
  • the first annual environmental report.

The above requirements apply irrespective of the location of the activity.



7.2 What environmental regulations or contractual obligations must the operator observe while oil and gas facilities are operational?

Contractors undertaking petroleum activities must take the necessary measures to ensure that their activities are conducted in a safe and secure manner, free from accidents, waste dumping and pollution. Contractors must implement effective and safe systems for preventing pollution resulting from petroleum activities in accordance with the applicable enactments and best petroleum industry practices, as required under Section 81 of the Petroleum (Exploration and Production) Act.

The Maritime Pollution Act, 2016 (Act 932) also applies to drilling rigs, floating storage units and floating production, storage and offloading units. Pursuant to Section 72 thereof, operators of a fixed or floating drilling rig or other platform engaged in exploration exploitation must keep a record of all operations involving oil or oily mixture discharge. Operators must, among other things:

  • equip the rig or platform, as far as practicable, with a tank to receive oil residue;
  • design the tank with installations to facilitate cleaning of the tank and discharge of residue to reception facilities; and
  • ensure that piping to and from a sludge tank is as prescribed.

Subject to certain exceptions – including where necessary to secure life, prevent damage to equipment and minimise damage from pollution – the operator must:

  • discharge oil or oily mixture;
  • drain from machinery spaces, oil tanks and other parts of the installation in a special area in the sea; and
  • ensure that the oil content of the discharge without dilution is not more than 40 parts per million.

The contractual obligations regarding environmental issues generally require the contractor to comply with the applicable law.



7.3 What environmental regulations or contractual obligations must the operator observe in relation to decommissioning?

A contractor that operates a petroleum facility is responsible for decommissioning that petroleum facility and restoring the area affected by it. The contractor must ensure that a well is decommissioned, abandoned or removed in a prudent manner, in accordance with the applicable laws and international conventions, protocols and guidelines.

The contractor must submit a decommissioning plan to the minister responsible for energy for approval. The decommissioning plan must include, among other things:

  • an assessment of the environmental and social impact of the decommissioning – in particular, setting out the potential impact on the environment, the surrounding communities, marine navigation and fishing; and
  • information on mitigating actions to reduce the negative impact on the environment and potentially affected persons,

in accordance with Regulation 168(2) of the Petroleum (Exploration and Production) (Health, Safety and Environment) Regulations and Regulation 61 of the Petroleum (Exploration and Production) (General) Regulations.

Once approved, the decommissioning plan must be implemented in accordance with its terms and conditions; and a report on the implementation of the decommission plan must be submitted to the minister in accordance with Section 44 of the Petroleum (Exploration and Production) Act.

The Offshore Oil and Gas Development in Ghana, Guidelines for Environmental Assessment and Management, also require that internationally recognised guidelines and standards issued by the International Maritime Organization and decisions by the Oslo-Paris Convention for the Protection of the Marine Environment of the North-East Atlantic be followed in decommissioning offshore facilities.



7.4 What are the potential consequences of breach of these requirements – both for the operator itself and for directors, managers and employees?

The potential consequences of a breach of the environmental requirements include:

  • suspension or revocation of the relevant environmental permit or certificate; and/or
  • imposition of a fine and a term of imprisonment.

The quantum of the fine and the term of imprisonment will depend on the specific regulation breached.

A contractor to a petroleum agreement is strictly liable for any pollution damage caused by or resulting from the petroleum activities. Where there are multiple contractors, they will be jointly and severally liable for any pollution damage in accordance with the Petroleum (Exploration and Production) Act.

Generally, a person that undertakes petroleum activities in contravention of the Petroleum (Exploration and Production) Act is liable on summary conviction to a fine of between approximately $20,000 and $10,000. Further, under Section 93(3) of the Petroleum (Exploration and Production) Act, where this and other specified offences are committed by a body corporate, a director, officer or any other person involved with the management of the body corporate is deemed to have also committed the offence and will therefore be liable to the applicable penalty. However, such a person can escape liability on proof that:

  • due diligence was exercised to prevent the commission of the offence; and
  • the offence was committed without the knowledge, consent or connivance of that person.

Similar provisions apply under the Environmental Protection Agency Act, and the Environmental Assessment Regulations. Additionally, under the Maritime Pollution Act, where the offence is committed or would have been committed by a person because of the act or default of another person, that other person is liable for the offence and may be charged and convicted.



7.5 Which national, provincial/state and/or local government regulatory bodies are responsible for enforcement of environmental obligations?

The Environmental Protection Agency, the Ghana Maritime Authority and the Petroleum Commission.



7.6 What is the regulators' general approach in regulating the oil and gas sector from an environmental perspective?

The regulators strictly regulate operators in the oil and gas sector. Fines will normally be imposed strictly as soon as the Petroleum Commission or the Environmental Protection Agency finds that the relevant requirements have been breached.



8 Health and safety

8.1 What key health and safety requirements apply to oil and gas operators in your jurisdiction?

A contractor must conduct petroleum activities in a manner that ensures a high level of safety is achieved, maintained and further developed in accordance with technological advancements, best international practices and the applicable enactments relating to health, safety and labour. A contractor must implement, maintain and update a management system to ensure compliance with the Petroleum (Exploration and Production) (Health, Safety and Environment) Regulations. A contractor must also ensure that employees understand their duty to contribute to the prevention of accidents and receive adequate training, among other things.

A contractor must also submit a health and safety plan to the Petroleum Commission at least three months before commencement of the relevant petroleum activity in accordance with Section 73 of the Petroleum (Exploration and Production) Act and Regulation 8 of the Petroleum (Exploration and Production) (Health, Safety and Environment) Regulations. The plan must give consideration to the specific nature of activities, local conditions and operational assumptions, and must include:

  • health, safety and environment targets;
  • training and competence development;
  • organisational arrangements;
  • performance standards;
  • waste management; and
  • emergency preparedness and response for the relevant petroleum activity.

The plan must be updated annually and in case of a significant modification, change or new stage of existing petroleum activities not already catered for in the existing plan. The contractor must further prepare and submit a safety case to the Petroleum Commission at least six months before the commencement of operation or decommissioning of a petroleum facility. The safety case must include:

  • a description of the petroleum facility;
  • technical and other control measures; and
  • a risk and emergency preparedness analysis.

To ensure the systematic maintenance and continuous improvement of petroleum facilities, a maintenance programme must be drawn up in accordance with Regulation 96 of the Petroleum (Exploration and Production) (Health, Safety and Environment) Regulations, stating the maintenance activities that will be conducted in order to:

  • monitor performance; and
  • identify, correct and control fault modes that pose a risk to the petroleum facilities, health, safety or the environment.

Additionally, the results of risk assessments, analysis, mappings, measurements, causes of work-related illnesses, accidents and near-misses must be submitted to the Petroleum Commission within one month of the assessment, as required under Regulations 9(4) and 133(c) of the Petroleum (Exploration and Production) (Health, Safety and Environment) Regulations.



8.2 Which national, provincial/state and/or local regulatory bodies are responsible for enforcement of health and safety regulations or obligations? What reporting requirements apply with regard to oil and gas accidents in your jurisdiction?

The Petroleum Commission is responsible for health and safety regulations in the oil and gas sector. An operator must immediately report accidents to the Petroleum Commission via telephone and email. Notification of the accident must then be confirmed by a letter within 48 hours of the occurrence of the accident in accordance with Regulation 159 of the Petroleum (Exploration and Production) (Health, Safety and Environment) Regulations.



8.3 What are the potential consequences of breach of these requirements – both for the operator itself and for directors, managers and employees?

The specific consequences of a breach of the health and safety requirements depend on the requirement breached. Anyone that breaches a requirement of the Petroleum (Exploration and Production) (Health, Safety and Environment) Regulations may be liable:

  • to pay an administrative penalty of approximately $100,000 and a fine of between approximately $20,000 and $100,000, and for continuing offences, a fine of up to $2,000 for each day during which the offence continues;
  • to a term of imprisonment between one and three years; or
  • to both a fine and imprisonment.

As stated in the Petroleum (Exploration and Production) Act, anyone that undertakes petroleum activities in contravention of the Act is liable on summary conviction to a fine of between approximately $20,000 and $100,000, and in the case of a continuing offence, to a fine of up to $2,000 for each day during which the offence continues. Where this and other specified offences are committed by a body corporate, a director, officer or any other person involved in the management of the body corporate is deemed to have also committed the offence and will therefore be liable to the applicable penalty. However, such a person can escape liability on proof that:

  • due diligence was exercised to prevent the commission of the offence; and
  • the offence was committed without the knowledge, consent or connivance of that person.


8.4 What best practices in relation to health and safety should operators consider adopting in your jurisdiction?

Oil and gas operators should adopt international best practices that are compatible with the health and safety requirements prescribed under Ghanaian law. Petroleum activities must be conducted in a manner which ensures that a high level of safety is achieved and maintained.



8.5 What is the regulators' general approach in regulating the oil and gas sector from a health and safety perspective?

The regulator insists on strict compliance with health and safety standards. Fines will normally be imposed strictly as soon as it comes to the notice of the Petroleum Commission that the relevant requirements have been breached.



9 Taxes and royalties

9.1 What national, provincial/state and/or local taxes, royalties and similar charges are levied on oil and gas operators in your jurisdiction? How are these calculated?

A contractor to a petroleum agreement is subject to the following major taxes, royalties and other charges:

  • corporate income tax at a rate of 35% on its chargeable income from petroleum operations;
  • withholding tax on service fees to subcontractors at a rate of 7.5% for residents and 20% for non-residents;
  • withholding tax on dividends paid by the contractor at a rate of 8%;
  • special import levy on certain imported goods at a rate of 2% of the CIF value;
  • withholding tax on employee income at a rate of 25% for non-residents and the pay-as-you-earn rates below for residents:
  • Rate of tax Chargeable income
    Nil First GHS 4,380
    5% Next GHS 1,320
    10% Next GHS 1,560
    17.5% Next GHS 36,000
    25% Next GHS 196,740
    30% Exceeding GHS 240,000
  • royalties calculated on the gross volume of petroleum produced and saved at the rate specified in the petroleum agreement, unless otherwise prescribed;
  • additional oil entitlement computed on the basis of the after-tax, inflation-adjusted rate of return that a contractor achieved with respect to each field;
  • bonus payments – that is, a signature bonus and a production bonus as specified; and
  • annual acreage fees based on the location and size of the contract area and phase of operation as stated below:
  • Phase of operation Acreage fees per annum (offshore) ($ per sq km) Acreage fees per annum (onshore) ($ per sq km)
    Initial exploration period 150 225
    1st extension period 300 450
    2nd extension period 300 450
    Development and production area 600 900


9.2 Are any tax incentives available for oil and gas operators?

Yes, under the Value Added Tax Act, 2013 (Act 852) the supply of crude oil and hydrocarbon products and machinery and parts of machinery specifically designed for use in the upstream sector in Ghana are exempt from value added tax, and consequently from the National Health Insurance Levy, the Ghana Education Trust Fund Levy and the COVID-19 Health Recovery Levy. Under the terms of the Model Petroleum Agreement, a contractor is exempt from export duty on petroleum exported from Ghana. Further, subject to compliance with local purchase obligations, contractors are exempt from import duty and related charges (save for administrative fees and charges) on plant, machinery and equipment to be used solely and exclusively for petroleum operations.



9.3 What other strategies might oil and gas operators consider to mitigate their tax liabilities?

Subcontractors that perform some of the obligations under a petroleum agreement may elect to do so through a syndicate in order to reduce their tax liability. A contractor must withhold tax on payments to a subcontractor; and a subcontractor must, in turn, withhold tax on payments to its sub-subcontractors. However, where a subcontract is performed by a syndicate of subcontractors, tax is withheld only at the first level of payment – that is, the payment from the contractor to the syndicate. The leader of the syndicate that receives the payment for onward distribution to the other members must not withhold tax.



9.4 Have there been any significant changes to the taxation rates applicable to oil and gas operators in the last three years?

No significant changes have been made to the applicable tax rates in the last three years.



10 Disputes

10.1 In which forums are oil and gas disputes typically heard in your jurisdiction?

Oil and gas disputes between the parties to a petroleum agreement are subject to international arbitration.



10.2 What issues do such disputes typically involve? How are they typically resolved?

Eni Ghana Exploration and Production Limited and Vitol Upstream Ghana Limited (together, 'the claimants') recently filed a notice of arbitration against Ghana and the Ghana National Petroleum Corporation (as respondents) for a breach by Ghana of the terms of the Offshore Cape Three Points petroleum agreement. The claimants allege that Ghana unlawfully attempted to impose an improper unitisation process on them, through the issuance of a directive by the minister responsible for energy to Eni and Springfield Exploration and Production Limited as operators of the Offshore Cape Three Points petroleum agreement and the West Cape Three Points Block 2 petroleum agreement, respectively, to begin the process leading to the unitisation of the Sankofa field (within the Offshore Cape Three Points contract area) and the Afina discovery (within the West Cape Three Points Block 2 contract area); and through subsequent directives, to implement the unitisation. The claimants further allege that the minister responsible for energy's directive does not comply with the applicable law and is premature, since the Afina discovery is yet to be appraised and there is not yet enough evidence that it is capable of producing hydrocarbons at a commercial flow rate. The claimants are seeking, among other things:

  • a declaration that certain directives of the minister and steps taken to implement those orders are a breach of the Offshore Cape Three Points petroleum agreement;
  • an order that the respondents take no further action to unitise the Sankofa field and the Afina discovery; and
  • an order for damages arising from breach of the Offshore Cape Three Points petroleum agreement, Ghanaian law and international law, on a joint and several basis.

This is the first oil and gas dispute to be referred to arbitration.

Other disagreements that have arisen between the state and contractors, but which have not been referred to arbitration, relate to stabilisation clauses that freeze the applicable law in force as at the effective date of some petroleum agreements. These disagreements have typically involved the application of legislation which came into force after the effective dates of those agreements, to vary their terms. The parties have dealt with these disagreements through negotiations with the minister and relevant regulators, while preserving their rights to claim a breach of the terms of their agreements.



10.3 Have there been any recent cases of note?

In Ndebugre v AG and Others [unreported; Writ No J1/5/2013; 20 April 2016; SC], which was commenced by a lawyer and former member of Parliament, the government invoked the original jurisdiction of the Supreme Court and sought a declaration that the termination of the South Deepwater Tano petroleum agreement without recourse to Parliament for approval contravened Article 268(1) of the Constitution and was therefore null and void. Article 268(1) of the Constitution requires parliamentary ratification for contracts involving the grant of a right by the government for the exploitation of a natural resource. The Supreme Court determined, among other things, that natural resource exploitation contracts ratified by Parliament require further parliamentary approval to be terminated. The only exception is where Parliament has delegated the right to approve the termination of such contracts to the executive pursuant to the law or by the terms of the ratified agreement.

Springfield Exploration and Production Ltd v Eni Ghana Exploration and Production and Vitol Upstream Ghana Ltd (Suit No CM/BDC/0924/2020) is an ongoing matter. In this case, the plaintiff is seeking an order compelling the defendant to comply with the minister's directive to enter into a unitisation and unit operating agreement with the plaintiff for the development of its Sankofa field and the plaintiff's Afina discovery as a single unit. The plaintiff is also seeking an order directed at the defendants to render accounts for all costs and proceeds received in respect of exploration and production operations in the area from 2009 to date. Recently, the court issued a preservation order requiring Eni and Vitol to pay 30% of all revenue generated from the Sankofa field into an interest-bearing account to be agreed by the parties, pending the determination of the suit.



11 Trends and predictions

11.1 How would you describe the current oil and gas landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

There has been a reduction in exploration and appraisal activities and a slowdown in bringing new development projects on stream due to the onset of the COVID-19 pandemic. However, contractors are poised to accelerate petroleum activities and gradually move towards normalcy. Some highlights are stated below.

AGM Petroleum Ghana Limited declared its Nyankom-1X well, drilled in 2019, a discovery which merited appraisal and has submitted its appraisal programme to the Petroleum Commission for approval. Appraisal is expected to commence in 2021. All exploratory drilling campaigns suspended because of the pandemic are planned to commence between Q4 2021 and Q2 2022. With respect to development, Tullow plans to drill and complete three wells in 2021, as part of its approved development plan for the Greater Jubilee field. Regarding production, Eni announced a gas/condensate discovery in its Akoma 1x well. This discovery can be put in production with a subsea tie to the floating production, storage and offloading unit John Agyekum Kufuor, with the aim of extending its production plateau.

Proposed legislation include the Petroleum Revenue Management (Amendment) Bill, 2021 and the Environmental Protection Agency (Amendment) Bill, 2021. There are also plans to publish guidelines for the effective implementation of the Petroleum (Exploration and Production) (Health, Safety and Environment) Regulations, 2017 (LI 2258).



12 Tips and traps

12.1 What are your top tips for oil and gas operators in your jurisdiction and what potential sticking points would you highlight?

In addition to conducting operations in accordance with the applicable law, contractors must maintain open communication channels with the relevant regulators to foster a good relationship. This is particularly important where questions of alleged non-compliance with the applicable law arise, necessitating discussions or negotiations with the relevant regulator to ensure that these issues are resolved smoothly. With respect to community relations, contractors must engage with members of the affected communities to help them understand the impact of petroleum operations on their activities. In the case of offshore operations, for example, members of the affected fishing communities must be made to understand that offshore vessels have safety perimeters that cannot be breached.

One issue that has emerged in recent times is interference by the government in the selection of an indigenous Ghanaian company to be a party to a petroleum agreement in accordance with the Petroleum (Local Content and Local Participation) Regulations. The government is also not mandated to select the indigenous Ghanaian company under a petroleum agreement; and in our view, a contractor must resist attempts by the government to influence its decision on an indigenous Ghanaian partner unless the contractor approves of the government's proposed local partner. It is imperative that the contractor freely selects its indigenous Ghanaian partner, using its own evaluation criteria, because it will be entering into a relationship with the indigenous Ghanaian company for the purpose of collaborating on petroleum operations. Another sticking point is compliance with the Petroleum (Local Content and Local Participation) Regulations in the procurement of goods and services. The Petroleum Commission strictly imposes these requirements and will impose penalties for non-compliance.

Co-Authored by Abena Amoatemaa Sarpong and Akua Afriyie Badu



The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.