Parliament has approved an extension of the terms of the agreement between the government and some petroleum exploration companies to safeguard their continuity and sustain production in mature fields. 

The extension of the West Cape Three Points (WCTP) and Deepwater Tano (DWT) block agreements to December 31, 2040, is expected to unlock up to $2 billion in additional capital expenditure, including the drilling of new wells and the deployment of supporting subsea infrastructure to address declining production in oil and gas.

The first amended agreement is between WCTP, the government, the Ghana National Petroleum Corporation (GNPC), GNPC Exploration and Production Limited Company, Tullow Ghana Limited, Kosmos Energy Ghana HC, Kosmos Energy Ghana Investments and PetroSa Ghana Limited.

The second was an amendment for the extension of the terms of the DWT agreement between the government, GNPC, GNPC Exploration and Production Limited, Tullow Ghana Limited, Kosmos Energy Ghana HC, Kosmos Energy Ghana Investments and Petrosa Ghana Limited.

The House also approved the master gas agreement among the GoG and the GNPC and GNPC Exploration and Production Company Limited (Explorco), Tullow Ghana Limited, Kosmos Energy Ghana HIC, Kosmos Energy Ghana Investments and PetroSa Ghana Limited.

The agreements were presented to Parliament on December 19, last year and February 13 this year, and they were referred to the Committee on Energy and the leadership of the Finance Committee for consideration and report. 

Justification for extension

The agreements were okayed after the House had adopted the report of the Energy Committee.

Per the report, as presented by the chairman of the committee, Emmanuel Bedzrah, the proposed extension of the WCTP and DWT petroleum agreements to December 31, 2040, was justified on the grounds of safeguarding continuity of upstream petroleum operations and sustaining production in mature fields.

It said the existing contractor parties possessed extensive operational knowledge of the Jubilee and TEN Fields, and continuity under the current arrangements would minimise transition risks, preserve institutional memory and prevent disruptions in production that could arise from premature licence termination or operator replacement.

The extension, the report said, was further justified by the substantial investment commitments tied to the revised contractual framework.

Those investments, it said, were critical to arresting natural production decline, stabilising oil output and enhancing gas recovery, thereby maximising the economic life of the fields and improving long-term petroleum revenues to the state.

“The amendment for the extension of the terms will give the GNPC an additional 10 per cent interest effective July 20, 2036, resulting in a total interest of 22.5 per cent and 25 per cent for the WCTP and DWT agreements, respectively.

“The value to Ghana from the extended field life is projected to yield about $374 million to the state from increased production volumes and prolonged revenue flows, and about $255 million of that realised in gas savings,” it said.

The report added that the contractor's request for a corporate income tax (CIT) offset as a government-backed payment security guarantee for gas sales to GNPC stemmed from the need to find a lasting bankable solution to the debts that the state continues to owe the contractor for gas supplies.

The report said as of the end of November 2025, an amount of $165.15 million was owed under the Jubilee Gas Sale Agreement (GSA) covering a period of about 15 months.

The proposed corporate income tax offset provides a non-interest-bearing, fiscally efficient and legally structured payment security mechanism that directly underpins GNPC obligations under the gas sales agreements, it said.

“Unlike letters of credit or commercial borrowing, the offset mechanism does not attract financing costs and does not introduce additional debt exposure.

In compliance with the Petroleum Revenue Management Act 2011, Act 815, the report said the Ministry of Finance had undertaken to pay any corporate income tax amounts offset by contractor parties into the Petroleum Holding Fund within 60 calendar days at the end of the relevant fiscal quarter.