- Expanded Shallow Water Tano Block (1,508sqkm)
Contract Parties
Base Energy (Operator, formerly Erin Energy), GNPC EXPLORCO, GNPC.
Effective Date/Initial Exploration Period
Effective Date: January 23, 2015
Initial Exploration Period (2 years+2 years): January 23, 2015 – January 22, 2019
Minimum Exploration Program (Initial Phase)
- Reprocess existing 2D and acquire 1500sqkm of 3D seismic;
- Drill one exploration well
Minimum Expenditure
$30,000,000
Observations as of 2022
Observation: Base Energy is seeking farm-in partners to finance its exploration campaign on the block after assuming operatorship.
The contractor did not fulfill the minimum work obligation even after extension to accommodate the ITLOS injunction. The Ministry has not provided update as to why the contractor still holds the block. No drilling has been undertaken.
The Contractor did not undertake any activity during 2019. The parent company of the Operator, Erin Energy, i.e., Erin Energy Inc. has filed for bankruptcy in the United States. The PC and Ministry of Energy are engaging the other partners in the block for operations to resume.
The operator of the block, Erin Energy, which controlled 60 percent in the block went bankrupt in 2018, effectively relinquishing its interests in the block. The 2021 Semi-Annual Report reveals that Base Energy has been assigned operatorship and granted a 3-year extension to the initial exploration period in August 2020 to enable the contractors to fulfil their minimum work obligation. Base Energy claims it has completed economic screening and appraisal options for three existing discoveries on the block and plans for extended well testing options.
It is worth noting that Base Energy reports an increase in their interests from 5 percent to 67.5 percent. It is unclear how Base Energy acquired the interests of the Erin Energy. Any relinquished blocks and interests in Ghana’s upstream petroleum reverts to the state. While the law adequately provides for relinquished blocks, there is a gap on how the state should deal with relinquished interests.
After assuming operatorship of the block, Base Energy is seeking farm-in partners to finance its exploration campaign. The block is part of the six selected blocks the Ministry of Energy marketed to investors as part of the 2022 Ghana Oil and Gas Roadshows in Houston, USA and London, Aberdeen in the UK.
To enable Base Energy to finish its minimum work commitment, the Minister for Energy extended its initial exploration period by three years in August 2020. The 3-year extension granted Base Energy to fulfil its minimum work obligations elapses in 2023.
With respect to payment obligations on the Expanded Shallow Water Tano block, Base Energy has an outstanding surface rental payment of US$800.00