Ghana has opened talks with ExxonMobil Corp. (NYSE: XOM) to allow the U.S. oil firm to undertake deepwater exploration off its coast, a deputy energy minister said on Nov. 13.
“The negotiations are ongoing according to our current laws ... so far so good,” Mohamed Amin Adam told Reuters on the sidelines of an Africa oil conference in Accra.
Adam said the government had opted for direct negotiation with ExxonMobil without open competitive tendering due to the peculiar nature of the field, and because Ghana has yet to pass regulations to back open competitive tendering.
A new petroleum law requires that oil contracts should be awarded through open and competitive tender. It also allows direct negotiation when necessary and justifiable.
ExxonMobil signed a memorandum of understanding with Ghana in 2015 to assess its Deepwater Cape Three Point (DCTP) region, 150 km (100 miles) off the coast with water depth ranging between 2,000 m and 4,000 m (6,500 ft and 13,000 ft).
The government said two firms had separately opted not to seek to explore the field because of its depth and high risk levels.
Adam said the government considered the ExxonMobil bid important, given the firm’s experience and capability in deepwater operations. “Ultradeepwater exploration is beyond the reach of current technology and we believe operators with strong research and development capability such as ExxonMobil are needed to unlock the potentials,” Adam said.
The DCTP interest is the second attempt by ExxonMobil to acquire oil assets in Ghana after the government blocked its 2009 bid to take over Kosmos Energy Ltd.’s (NYSE: KOS) stake in the flagship Jubilee Field.
Ghana, which also produces cocoa and gold, expects to ramp up oil production to around 250,000 barrels per day (bbl/d) by 2019 from four oil fields including Jubilee whose current combined average annual output is around 100,000 bbl/d.