Pacts to boost exploration off Ghana

Offshore Ghana Activity [31661 bytes] Exploration activity off Ghana will continue to accelerate under two more agreements disclosed by Ghana National Petroleum Corp. (GNPC). One agreement gives a unit of Houston-based Huevo Energy Co. and its partner, Yukong Ltd., a unit of South Korea's Sunkyong Group, exploration and production rights covering about 1.7 million acres in the East Cape Three Points prospect area.

April 7, 1997

2 min read

Offshore Ghana Activity [31661 bytes]

Exploration activity off Ghana will continue to accelerate under two more agreements disclosed by Ghana National Petroleum Corp. (GNPC).

One agreement gives a unit of Houston-based Huevo Energy Co. and its partner, Yukong Ltd., a unit of South Korea's Sunkyong Group, exploration and production rights covering about 1.7 million acres in the East Cape Three Points prospect area.

The second agreement is with units of two U.K. firms, Dana Petroleum plc and Seafield Resources plc. It covers exploration and production rights in an area of about 1,455 sq miles in the western Tano basin portion of the Gulf of Guinea immediately adjacent Cote d'Ivoire.

Nuevo/Yukong accord

"To put the enormous size of this contract area into perspective, it is equal to approximately 350 Gulf of Mexico offshore blocks," said Mike Watford, president and chief executive officer of Nuevo.

The contract area includes many large structures that appear analogous to nearby producing fields off Cote d'Ivoire, he added. Nuevo, operator and 75% interest holder, plans to shoot additional seismic in 1997 prior to drilling the first exploratory well next year.

Under the agreement, Nuevo and 25% interest holder Yukong will be responsible for all capital investment. GNPC will have a 10% carried interest and can increase participation to 20% in the event of a commercial discovery.

Dana/Seafield deal

Dana, operator, and Seafield each hold a 45% interest. As with the Nuevo/Yukong agreement, GNPC will hold a 10% carried interest.

Exploration/drilling plans were not available at presstime.

Dana says it expects to benefit from the development of infrastructure intended to support proposed development of South Tano oil and gas fields that will feed an expansion of electric power generating capacity in Ghana.

Following World Bank commitments for $300 million this past December, related development projects picked up pace (OGJ, Mar. 17, 1997, p.111).

The two newest agreements follow another disclosed last month between GNPC and Hunt Oil Co., Dallas, for exploration and production in the western Three Points area of Ghana's Tano and Saltpond basins (OGJ, Mar, 10, 1997, p.38).

The deals are subject to ratification by Ghana's parliament, which is expected within the next few months.