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Ghana Contract Monitor
  1. 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 2017

This Block was affected by the Preliminary ruling of the International Tribunal for the Law of the Sea (ITLOS) which placed a moratorium on drilling new wells in the disputed area. The company got extension to continue working on the block.

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.