1. 1 ` GHANA’S PETROLEUM SECTOR AND INVESTMENT OPPORTUNITIES Presentation at the 2 nd India-Africa Hydrocarbons Conf: Dec. 7-8, 2009 BY HON. BUAH

2. All Rights Reserved 2 PRESENTATION OUTLINE Introduction Upstream Petroleum Sector Fiscal, Legal & Contractual Regimes Gas Policy Gas Master Plan Key Local Content Requirements Investment Opportunities Conclusion

3. All Rights Reserved 3 INTRODUCTION

4. 8/10/20154 Energy Sector Institutions Ministry of Energy Power Volta River Authority ECG Northern Electricity Dept. Energy Foundation Petroleum Ghana National Petroleum Company Tema Oil Refinery BOST Oil Marketing Companies Renewable Min of Energy Regulation Energy Commission Public Utility Regulatory Commission National Petroleum Authority

5. THE UPSTREAM SECTOR 5

6. All Rights Reserved 6 1. Western Basin Tano-Cape Three points Basin 2. Central Basin Saltpond 3. Eastern Basin Accra-Keta Basin 4. Voltaian Basin Inland basin, covering about 40% of the Land area of the country

7. K NOV. 2008 Atuabo.... ACTIVITIES OFFSHORE

8. All Rights Reserved 8 JUBILEE FIELD Jubilee Field was Discovered in the Deepwater West Cape Three Points (WCTP)/Tano Block in June & August 2007 by a Consortium of Companies –Kosmos Energy Ghana (HC) –Anadarko Corporation –Tullow Oil –EO Group –Sabre Oil Together with Ghana National Petroleum corporation,

9. All Rights Reserved 9 JUBILEE FIELD Tweneboa Discovery

10. All Rights Reserved 10 Reserve –800 Million Barrel Recoverable –Upside of 1.5 Billion barrels –Hydrocarbon Characteristics Density of 36.5º API Sweet Crude 1,000 to 1,200 Gas-to-Oil Ratio Seventeen (17) wells to be drilled (Phase 1 Devlp) –9 Producers –3 Gas injection –5 Water injection

11. All Rights Reserved 11 Phase Production of Field –Phase 1 starts in 2010 120,000 Barrel/Day Oil Production 120 MMSCF/Day Gas Production –Phase 2 Starts in 2013 240,000 Barrel/Day Oil Production 240 MMSCF/Day Gas Production Some percentage of Produced Gas will be re-injected if technically prudent. Part of the gas would also be used on the FPSO for normal operation and the rest would be piped to shore for the proposed gas project.

12. All Rights Reserved12 FISCAL, LEGAL & CONTRACTUAL FRAMEWORK

13. All Rights Reserved 13 LEGAL & CONTRACTUAL FRAMEWORK The legal framework for upstream petroleum activities in Ghana is embodied in the Constitution of the Republic of Ghana Ghana National Petroleum Corporation Law, 1983 Petroleum Exploration & Production Law, 1984 Petroleum Income Tax Law, 1987 Model Petroleum Agreement Internal Revenue Act, 2000 Environmental Protection Agency Act, 1994 Environmental Assessment Regulation, 1999

14. All Rights Reserved 14 FISCAL SYSTEM The Fiscal Regime includes the following:  Royalty: 4% - 15%  GNPC’s Initial Interest (Carried): 7½% - 15%  GNPC’s Additional Interest: 3% - 10%  Petroleum Income Tax: 35%  Additional Oil Entitlement  Surface Rental

15. All Rights Reserved 15 GAS POLICY

16. All Rights Reserved 16 KEY DRIVERS No flaring or Venting of Natural Gas All Gas will be processed onshore and Gas for Injection piped to FPSO Natural Gas will be a catalyst for national economic development

17. All Rights Reserved 17 Petrochemical Industry Gas Processing Plant No Gas Flaring Pipelines

18. All Rights Reserved 18 THE GAS MASTER PLAN

19. All Rights Reserved 19 STRATEGIC PLAN To Bring Associated Gas from the Jubilee Field to shore To process the transmitted wet gas into dry gas and liquids including –Liquefied Petroleum Gas (LPG) –Condensate –Propane

20. All Rights Reserved 20 To supply gas for electricity generation and other industrial applications To supply LPG to domestic Market To export the other liquids To facilitate the economic development of Ghana with the availability of reliable gas supplies as a catalyst for the dev of other natural resources ( Bauxite, Lime, etc)

21. All Rights Reserved 21 Onshore Pipeline LPG Buoy Gas Plant

22. All Rights Reserved 22 LOCAL CONTENT

23. All Rights Reserved 23 DEFINITION The quantum of composite value added or created in the Ghanaian economy Through the utilization of Ghanaian human and material resourcesThrough the utilization of Ghanaian human and material resources For the provision of goods and services to the petroleum industryFor the provision of goods and services to the petroleum industry Within acceptable quality, health, safety and environmental standardsWithin acceptable quality, health, safety and environmental standards So As to stimulate the development of indigenous capabilities

24. All Rights Reserved 24 CRITERIA Criteria for defining such local content include the following: Percentage of Ghanaian Management in Service Companies set up in Ghana;Percentage of Ghanaian Management in Service Companies set up in Ghana; Infrastructural investments in Ghana;Infrastructural investments in Ghana; Percentage of Ghanaian ownership in company;Percentage of Ghanaian ownership in company; Percentage of Ghanaian Employees (Skilled and Unskilled);Percentage of Ghanaian Employees (Skilled and Unskilled); Percentage value of Services provided by Ghanaians;Percentage value of Services provided by Ghanaians;

25. All Rights Reserved 25 Percentage Value of Ghanaian Raw Materials utilized;Percentage Value of Ghanaian Raw Materials utilized; Percentage Value of Ghanaian Finished Goods utilized;Percentage Value of Ghanaian Finished Goods utilized; Technology Transfer/Capacity Development Programmes;Technology Transfer/Capacity Development Programmes; New Employment Opportunities for Ghanaians; andNew Employment Opportunities for Ghanaians; and Ghanaian Participation in the procurement of imported goods.Ghanaian Participation in the procurement of imported goods.

26. All Rights Reserved 26 INVESTMENT OPPORTUNITIES

27. All Rights Reserved 27 Some of the ancillary business opportunities that might become available include the following: Dedicated shorebase with a dedicated mini harbour; Onshore support and logistics; Supply chain services; Expansion and rehabilitation of the Takoradi airport;

28. All Rights Reserved 28 Helicopter and fixed wing aircraft transportation; Supply boats, anchor handling boats, diving vessels, etc; Real Estate – housing of the numerous expatriate staff of oil companies and service companies; Telecommunications, weather forecasting, search and rescue facilities; Banking and Insurance Services.

29. All Rights Reserved 29  Construction Opportunities: –LNG pressure vessels –Construction, installation and commissioning of offshore structures –Pipeline manufacturing from steel –Electrical wiring of platforms and vessels

30. All Rights Reserved 30 –Installation and maintenance of instrumentation for production plants –Welding and Joinery –Assembling of knocked down structures in yards in Ghana –Dry Dock services.

31. All Rights Reserved 31 CONCLUSION

32. 8/10/201532 Why Invest in Ghana’s Petroleum Sector? Strong Macro-Economic Growth driving energy demand -GDP growth of 6% presently. -Inflation reduced from 41% in 2000 to 10.5% presently Strong growth in energy demand -Electricity consumption growing at about 10% per year -Petroleum products demand growing at about 6% per year

33. 8/10/201533 Transparent Regulatory Environment -PURC Act 538, 1997 -PURC to regulate/approve electricity tariffs -EC Act 541, 1997 -EC responsible for licensing and technical regulation of operators in power and natural gas business; Act defines the structure of electricity and natural gas markets -National Petroleum Authority (NPA) Act 691 – regulates the petroleum industry

34. 8/10/201534 Government believes in Private Sector to grow the economy The investment climate is good and incentives for investment in energy sector are attractive Stable political and democratic Government We are ready to discuss further incentives with the private sector

35. All Rights Reserved 35 THANK YOU