Petroleum (Exploration and Production) Act, 2016 Act 919

PETROLEUM (EXPLORATION AND PRODUCTION) ACT, 2016 (ACT 919)
ARRANGEMENT OF SECTIONS
Section
General Provisions
1. Scope of the Act,
2. Object of the Act
3. Title to petroleum
4. Management of petroleum resources
5. Conduct of petroleum activities
Area Management
6. Reference map
7. Opening of area
8. Closure and redefinition of area
Reconnaissance Licence
9. Reconnaissance licence
Petroleum Agreement
10. Petroleum agreement
11. Petroleum activities by the Corporation
12. Contract area
13. Operator
14. Duration
15. Change of ownership
16. Assignment
17. Sub-contracting
18. Pre-emption
19. Transfer of assets to the Corporation
20. Review of terms and conditions
Exploration
21. Exploration period and extension
22. Relinquishment of contract area
1

of assets to the Corporation
20. Review of terms and conditions
Exploration
21. Exploration period and extension
22. Relinquishment of contract area
1

23. Minimum work obligation
24. Exploration drilling,
25. Notification of petroleum discovery and appraisal
Development and Production
26. Prudent exploitation
27. Plan of development and operation
28. Restrictions on approval of plan of development and operation
29. Postponement of development
30. Commencement of petroleum production
31. Production programme and permits
32. Utilisation of associated natural gas
33. Restrictions on flaring
34. Co-ordination of petroleum activities and unitisation
35. Cross-border cooperation and unitisation
36. Third party use of production facilities
37. Measurement of petroleum obtained
Transportation, Treatment and Storage
38. Licence to install and operate facilities for transportation, treatment and storage of
petroleum
39. Application to install and operate facilities
40. Conditions for granting of a licence to install and operate facilities
41. Landing of petroleum
42. Third party use of transportation, treatment and storage facilities
Cessation, Decommissioning and Removal of Facilities
43. Decommissioning plan
44. Decision on the decommissioning plan
45. Decommissioning fund
46. Plugging and abandonment of well
47.

oval of Facilities
43. Decommissioning plan
44. Decision on the decommissioning plan
45. Decommissioning fund
46. Plugging and abandonment of well
47.

Restoration of affected areas
48. Liability for decommissioning
49. Compliance
2

General Requirements for Petroleum Activities
50. Petroleum operating standards
51. Supervision and inspection
52. Ownership of petroleum data
53. Samples, data and information
54. Reporting
55. Information concerning petroleum activities
56. Petroleum register
57. Mortgaging of participating interest
58. Security for fulfilment of obligations
59. Liabilities
60. Employment and training of Ghanaian citizens
61. Use of Ghanaian goods and services
62. Technology transfer
63. Local content plan
64. Establishment of the Local Content Fund
65. Object of the Fund
66. Sources of money for the Fund
67. Management of the Fund
68. Accounts and audit
69. Annual report and other reports
70. Incorporation of local company
71. Domestic supply requirement
72. Interference with lawful activities, compensation and access to land
Health and Safety, Security and Environment
73. Safety requirements and standards
74. Safety precautions
75. Emergency preparedness
76. Emergency preparedness against deliberate attacks
77. Safety zones
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requirements and standards
74. Safety precautions
75. Emergency preparedness
76. Emergency preparedness against deliberate attacks
77. Safety zones
3

78. Suspension of petroleum activities
79. Measures to ensure safety
80. Qualifications
The Environment and Liability for Pollution Damage
81. Environmental principles and protection
82. Impact assessment
83. Liability for pollution damage
84. Compensation for pollution damage
Fiscal Provisions
85. Payment of royalties
86. Annual fee in respect of acreage
87. Tax
88. Bonus payments
89. Additional oil entitlement
Miscellaneous Provisions
90. Natural resources other than petroleum resources
91. Transactions between contractor and affiliates
92. Insurance
93. Offences and penalties
94. Authority to issue Regulations, guidelines and stipulate conditions
95. Interpretation
96. Transitional provisions
97. Repeal and savings
4

alties
94. Authority to issue Regulations, guidelines and stipulate conditions
95. Interpretation
96. Transitional provisions
97. Repeal and savings
4

ACT 919
REPUBLIC OF GHANA
THE NINE HUNDRED AND NINETEENTH
ACT
OF THE PARLIAMENT OF THE REPUBLIC OF GHANA
ENTITLED
PETROLEUM (EXPLORATION AND PRODUCTION)
ACT, 2016
AN ACT to regulate petroleum activities and to provide for related matters. DATE OF ASSENT: 19th August, 2016. PASSED by Parliament and assented to by the President:
General Provisions
Section 1—Scope of the Act
This Act applies to petroleum activities within the jurisdiction of the Republic of Ghana,
including activities in, under and upon its territorial land, inland waters, territorial sea,
exclusive economic zone and its continental shelf. Section 2—Object of the Act
The object of the Act is to provide for and ensure "safe, secure, sustainable and efficient
petroleum activities in order to achieve optimal long-term petroleum resource exploitation and
utilisation for the benefit and welfare of the people of Ghana.

m activities in order to achieve optimal long-term petroleum resource exploitation and
utilisation for the benefit and welfare of the people of Ghana.

Section 3—Title to petroleum
Petroleum existing in its natural state in, under or upon any land in Ghana, rivers, streams,
water courses throughout Ghana, the exclusive economic zone and any area covered by the
territorial sea or continental shelf, is the property of the Republic of Ghana and is vested in the
President on behalf of and in trust for the people of Ghana. Section 4—Management of petroleum resources
5

the Republic of Ghana and is vested in the
President on behalf of and in trust for the people of Ghana. Section 4—Management of petroleum resources
5

The management of petroleum resources by the Republic of Ghana shall be conducted in
accordance with the principles of good governance, including transparency and accountability
and the object of this Act. Section 5—Conduct of petroleum activities
Subject to section 11, petroleum activities shall be conducted only in an open area under a
licence or petroleum agreement and in accordance with applicable enactments. Area Management
Section 6—Reference map
The Minister, shall in consultation with the Commission, prepare a reference map showing
areas of possible accumulation of petroleum within the jurisdiction of Ghana and those areas
shall in the map be divided into numbered areas, each of which shall be described as a block. Section 7—Opening of an area
(1) The decision to open an area for petroleum activities shall be made by the Minister. (2) The Minister shall, in collaboration with the Commission and other agencies, undertake an
evaluation of the various interests in the relevant area before the area is opened for petroleum
activities.

mmission and other agencies, undertake an
evaluation of the various interests in the relevant area before the area is opened for petroleum
activities.

(3) The Minister shall prepare a report on the evaluation which shall include a strategic
assessment of
(a) the impact of the petroleum activities on local communities,
(b) the impact of petroleum activities on the environment, trade, agriculture, fisheries, shipping,
maritime and other industries and risk of pollution, and
(c) the potential economic and social impact of the petroleum activities. (4) The Minister shall publish the evaluation report in the Gazette and in at least two state-
owned daily newspapers and may publish the report in any other medium of public
communication:
(5) The report shall specify the area proposed to be opened for petroleum activities, and the
nature and extent of the petroleum activities. (6) A person who has an interest in an area which is the subject of an evaluation report shall,
within sixty days after the publication of the report, present the views of that person to the
Minister. (7) The Minister, having taken due consideration of the report and the views of an interested
party, shall determine whether or not to open the area.

(7) The Minister, having taken due consideration of the report and the views of an interested
party, shall determine whether or not to open the area.

(8) The Minister shall publish the decision in the Gazette and in at least two state-owned daily
newspapers and may publish the report in any other medium of public communication. (9) The Minister may reserve a block, part of a block or a number of blocks in an open area for
the Corporation. 6

her medium of public communication. (9) The Minister may reserve a block, part of a block or a number of blocks in an open area for
the Corporation. 6

Section 8—Closure and redefinition of area
(1) The Minister may
(a) close an area; or
(b) redefine the boundaries of an area which has been declared open under section 7 but which
is not covered by an existing petroleum agreement or authorisation. (2) The Minister shall, before closing an area or redefining the boundary of an area, publish a
notice of the decision to close the area or redefine the boundary of the area in the Gazette and
in at least two state owned daily newspapers and may publish the report in any other medium
of public communication. (3) A person who has an interest in the affected area may make a representation to the Minister
on the closure or redefinition of the boundary within sixty days after the publication. (4) The Minister shall, after taking due consideration of any representation made under
subsection (3), determine whether or not to close an area or redefine the boundaries of the area.

g due consideration of any representation made under
subsection (3), determine whether or not to close an area or redefine the boundaries of the area.

(5) The Minister shall after the expiration of the sixty day period, publish the closure or
redefinition of the boundaries of the area in the Gazette and in at least two state-owned daily
newspapers and may publish the closure or redefinition of the boundaries in any other medium
of public communication. (6) The closure or redefinition of the boundaries of an open area shall not affect another area
covered by a petroleum agreement or authorisation existing at the time of the decision. Reconnaissance Licence
Section 9—Reconnaissance licence
(1) The Minister may, in consultation with the Commission, grant to a person, a petroleum
reconnaissance licence in respect of a defined area. (2) A reconnaissance licence grants to the licensed person a non- exclusive right to undertake
(a) data collection including seismic surveying and shallow drilling, and
(b) processing and interpretation or evaluation of petroleum data in the area specified in the
licence.

ng seismic surveying and shallow drilling, and
(b) processing and interpretation or evaluation of petroleum data in the area specified in the
licence.

(3) The Minister may in a special case grant to a person an exclusive right to undertake
reconnaissance activities in a defined area not covered by an existing reconnaissance licence,
but the grant of that right does not affect any proprietary rights of the Republic to data or
preclude the rights of the Commission or the Corporation to undertake reconnaissance or other
petroleum activities within that area. (4) The Republic may enter into a petroleum agreement with a person who has the requisite
technical competence and financial capacity to fulfil the obligations of the reconnaissance
activities and other requirements as prescribed. (5) A reconnaissance licence shall be for a period of not more than three years but the Minister
may, where necessary, extend the licence for period not exceeding two years. 7

nce shall be for a period of not more than three years but the Minister
may, where necessary, extend the licence for period not exceeding two years. 7

(6) A person shall not commence a reconnaissance activity in relation to petroleum unless that
person has complied with
(a) the relevant statutory requirements on environmental protection prescribed in the
Environmental Protection Agency Act, 1994 (Act 490); and
(b) any other applicable enactments. (7) Subject to subsection (8), a reconnaissance licence shall not grant to a person a right to
acquire data in an area covered by a petroleum agreement or an authorisation. (8) The Minister may, in consultation with the contractor, grant to a person other than the
contractor a reconnaissance licence for the acquisition of data in an area covered by a petroleum
agreement on condition that the reconnaissance activities of that person do not unreasonably
interfere with the activities of the contractor. (9) The Minister shall not be held liable by a third party for fees or for other losses that arise
as a result of the reconnaissance licence granted to that third party under subsection (8). (10) A petroleum agreement may be entered into with a third party in respect of an open area
covered by a reconnaissance licence.

nder subsection (8). (10) A petroleum agreement may be entered into with a third party in respect of an open area
covered by a reconnaissance licence.

(11) Unless the Minister otherwise determines, the right granted under a reconnaissance licence
to acquire new data in the open area referred to in subsection (10) shall terminate from the
effective date of a petroleum agreement and an obligation to refund fees or liability for other
losses shall not arise as a result of the termination. Petroleum Agreement
Section 10—Petroleum agreement
(1) A body corporate shall not, unless otherwise provided in this Act, engage in the exploration,
development and production of petroleum except in accordance with the terms of a petroleum
agreement entered into between that body corporate, the Republic of Ghana and the
Corporation. (2) A contractor shall, subject to the provisions of this Act, carry out petroleum activities in the
contract area as provided in the petroleum agreement. (3) A petroleum agreement shall only be entered into after an open, transparent and competitive
public tender process.

ded in the petroleum agreement. (3) A petroleum agreement shall only be entered into after an open, transparent and competitive
public tender process.

(4) Despite subsection (3), the Minister may on stated reasons decide not to enter into a
petroleum agreement after the tender process as prescribed,
(5) Where all or part of the area offered for tender in a public tender process has not become
the subject of a petroleum agreement, but the Minister determines that it is in the public interest
for that area to be subjected to a petroleum agreement, the Minister may initiate direct
negotiations with a qualified body corporate for a petroleum agreement. (6) The Minister shall publish an invitation to tender or an invitation for direct negotiations in
the Gazette and in at least two state-owned daily newspapers and may publish the invitation in
any other medium of public communication. 8

tiations in
the Gazette and in at least two state-owned daily newspapers and may publish the invitation in
any other medium of public communication. 8

(7) A body corporate who wishes to submit a bid or participate in negotiations shall submit an
expression of interest to the Minister, as prescribed. (8) Where the Minister receives more than one expression of interest, a tender process in
accordance with subsection (3) shall be undertaken. (9) Despite subsection (3), the Minister may, in consultation with the Commission, determine
that a petroleum agreement may be entered into by direct negotiations without public tender,
where direct negotiations represent the most efficient manner to achieve optimal exploration,
development and production of petroleum resources in a defined area. (10) The Republic may enter into a petroleum agreement with a body corporate that has the
requisite technical competence and financial capacity to fulfil the obligations of the petroleum
agreement and other requirements as prescribed. (11) The Minister may require a consortium as a condition for entering into a petroleum
agreement. (12) The Minister shall represent the Republic of Ghana in the negotiation of the terms of a
petroleum agreement and shall enter into a petroleum agreement on behalf of the Republic.

t the Republic of Ghana in the negotiation of the terms of a
petroleum agreement and shall enter into a petroleum agreement on behalf of the Republic.

(13) A petroleum agreement entered into by the Minister shall not be effective if it is not ratified
by Parliament in accordance with article 268 of the Constitution. (14) A petroleum agreement shall contain a term that the Corporation shall
(a) hold an initial participating carried interest of at least fifteen per cent for exploration and
development, and
(b) have the option to acquire an additional participating interest as determined in the petroleum
agreement which
(i) may be exercised within a specified period of time following the declaration of commercial
discovery, and
(ii ) shall be a paying interest in respect of costs incurred in the conduct of petroleum activities
other than exploration costs. (15) Any borrowing exceeding the cedi equivalent of thirty million United States Dollars for
the purpose of exploration, development and production shall be approved by Parliament and
shall be in consonance with the Petroleum Revenue Management Act, 2011 (Act 815).

tion, development and production shall be approved by Parliament and
shall be in consonance with the Petroleum Revenue Management Act, 2011 (Act 815).

Section 11—Petroleum activities by the Corporation
(1) Subject to the authorisation of the Minister and any terms stipulated by the Minister, the
Corporation may undertake petroleum activities in an area opened under section 7 but which
is not covered by a petroleum agreement. (2) An authorisation by the Minister is not effective unless it is ratified by Parliament in
accordance with article 268 of the Constitution. (3) Where the Corporation undertakes petroleum activities, the operations of the Corporation
shall
9

accordance with article 268 of the Constitution. (3) Where the Corporation undertakes petroleum activities, the operations of the Corporation
shall
9

(a) be carried out in accordance with approvals or permits granted under this Act and applicable
enactments, and
(b) be in accordance with a long-term exploration and production programme and annual
programme drawn up by the Corporation and approved by the Minister, in consultation with
the Commission, in respect of each area. (4) The Corporation may employ sub-contractors to perform the functions of the Corporation
but these sub-contractors are not entitled to any share of petroleum produced as a result of their
operations. (5) Where the Corporation conducts petroleum activities not in association with a contractor, a
contractor may subsequently be included as a party under a petroleum agreement in accordance
with section 10. Section 12—Contract area
The area subject to a petroleum agreement shall be specified in the petroleum agreement and
may cover one or more blocks or parts of one or more blocks. Section 13—Operator
(1) The Minister shall approve the operator before the execution of a petroleum agreement
under section 10. (2) The Minister shall appoint an operator where the parties cannot agree on the choice of an
operator.

ion of a petroleum agreement
under section 10. (2) The Minister shall appoint an operator where the parties cannot agree on the choice of an
operator.

(3) An operator shall be a contractor, the Corporation, a body corporate owned by the
Corporation or a body corporate owned by the contractor and the Corporation. (4) The Minister may approve a change of an operator upon the request of a contractor or the
Corporation. (5) The Minister shall, in consultation with the Commission and the Corporation, change an
operator in circumstances where that operator ceases to meet material requirements of this Act,
other applicable enactments and a petroleum agreement. Section 14—Duration
(1) A petroleum agreement shall, subject to subsection (2), be for a period of not more than
twenty-five years. (2) Where production from a field is projected to extend beyond the original term of the
petroleum agreement, the Minister may
(a) approve an extension of the petroleum agreement on the terms agreed by the parties; or
(b) execute a new petroleum agreement by direct negotiations in accordance with section 10,
to ensure optimal production from the field. (3) The extension of a petroleum agreement or the execution of a new petroleum agreement is
subject to ratification by Parliament. Section 15—Change of ownership
10

ion of a petroleum agreement or the execution of a new petroleum agreement is
subject to ratification by Parliament. Section 15—Change of ownership
10

A contractor or sub-contractor shall not transfer a share of that contractor's or sub-contractor's
incorporated company in the Republic to a third party or affiliate without the written approval
of
(a) the Minister, in the case of a contractor, or
(b) the Commission, in the case of a sub-contractor, if the effect of the transfer would be to
(c) give the third party or affiliate control of the company, or
(d) enable the third party , or affiliate to take over the interest of a shareholder who owns five
per cent or more of the shares of the company. Section 16—Assignment
A contractor or a licensee shall not without the written approval of the Minister, directly or
indirectly assign the interest of the contractor under a petroleum agreement, whether in whole
or in part, to a third party or an affiliate. Section 17—Sub-contracting
(1) A contractor or sub-contractor shall not enter into a petroleum sub-contract without the
written approval of the Commission. (2) The Commission shall approve the threshold for the value of petroleum sub-contracts as
prescribed. (3) A sub-contractor shall register with the Commission as prescribed.

l approve the threshold for the value of petroleum sub-contracts as
prescribed. (3) A sub-contractor shall register with the Commission as prescribed.

(4) A contractor shall not award a petroleum sub-contract to a company that is not registered
with the Commission. (5) A contractor shall not enter into an agreement with an affiliate for the lease of a petroleum
facility to be used for petroleum activities without the written approval of the Commission. (6) A person shall not without the written approval of the Commission directly or indirectly
assign, whether in whole or in part, a right or obligation under a sub-contract to a third person
or an affiliate. Section 18—Pre-emption
(1) Where a contractor enters into an agreement to dispose of all or part of the interest of that
contractor directly or indirectly under a petroleum agreement, the Corporation shall have a pre
emption right to acquire the interest on the same terms as agreed with the potential buyer. (2) Where the consideration agreed is not in monetary terms, the Corporation may pay the
corresponding monetary value of that consideration.

al buyer. (2) Where the consideration agreed is not in monetary terms, the Corporation may pay the
corresponding monetary value of that consideration.

(3) Where a contractor has entered into an agreement to dispose of all or part of the interest of
that contractor under a petroleum agreement, the contractor shall notify the Minister, the
Commission and the Corporation immediately of the consideration and other terms agreed. (4) The Corporation shall notify the contractor of the election of the Corporation to exercise
the pre-emption right within ninety days of the receipt of the notification. 11

l notify the contractor of the election of the Corporation to exercise
the pre-emption right within ninety days of the receipt of the notification. 11

Section 19—Transfer of assets to the Corporation
(1) Ownership of physical assets purchased, installed or constructed by a contractor for
petroleum activities shall be transferred to the Corporation at the option of the Corporation
either when the full cost has been recovered in accordance with the terms of the petroleum
agreement or when the petroleum agreement terminates. (2) The contractor is entitled to further use of the assets for purposes of operations under the
petroleum agreement and remains liable for maintenance, insurance and other costs associated
with the use of the assets. (3) The contractor is in any of the events specified under subsection (1) responsible for the
decommissioning of the assets. (4) A physical asset that is used by a contractor in a petroleum activity as a capital or financial
lease shall be treated as a purchased asset. (5) Where at least fifty percent of the cost of a physical asset has been recovered in accordance
with the terms of an existing petroleum agreement, the Corporation may have the title to the
asset transferred to the Corporation by the contractor on the payment by the Corporation of the
unrecovered portion of the cost of the asset.

e to the
asset transferred to the Corporation by the contractor on the payment by the Corporation of the
unrecovered portion of the cost of the asset.

(6) A contractor is not required under this section to transfer to the Corporation, equipment or
any other assets rented or leased by the contractor for use in petroleum activities and which are
of the type customarily leased for use in accordance with petroleum industry practice. (7) A lien, charge or an encumbrance on an asset shall lapse upon the transfer of that asset
under this section, however, the rights of use established with the prior approval of the Minister
shall remain in force. Section 20—Review of terms and conditions
(1) The terms of a petroleum agreement may be reviewed by the parties to the agreement where
there is a material change in the circumstances that prevailed at
(a) the time the agreement was executed, or
(b) the last review of the agreement. (2) A petroleum agreement that is reviewed under subsection (1) is subject to ratification by
Parliament in accordance with article 268 of the Constitution, if the review results in material
change.

subsection (1) is subject to ratification by
Parliament in accordance with article 268 of the Constitution, if the review results in material
change.

Exploration
Section 21—Exploration period and extension
(1) A petroleum agreement shall contain as a term of the agreement, a provision that specifies
that the exploration period is, subject to subsection (5), not more than seven years from the
effective date of the agreement. (2) The exploration period shall consist of working periods, comprising an initial exploration
period and up to three extension periods as provided for in the petroleum agreement, within the
total exploration period. 12

ng an initial exploration
period and up to three extension periods as provided for in the petroleum agreement, within the
total exploration period. 12

(3) On the fulfilment of the work and expenditure obligations stipulated in a petroleum
agreement for a relevant working period under subsection (2), the contractor may enter into the
subsequent working period and shall exercise that option by written notification to the
Commission before the expiration of the relevant working period. (4) The Commission may extend each working period on application by the contractor and the
extension shall be granted on the condition that the contractor has carried out substantial parts
of the work programme stipulated in the petroleum agreement in a prudent manner and to the
satisfaction of the Commission. (5) The Minister in consultation with the Commission may extend the exploration period
beyond seven years from the effective date of the petroleum agreement,
(a) where a discovery of petroleum is made in the last year of the exploration period, and an
extension is necessary to enable a determination to be made of whether the discovery is a
commercial discovery; or
(b) in exceptional situations as prescribed.

is necessary to enable a determination to be made of whether the discovery is a
commercial discovery; or
(b) in exceptional situations as prescribed.

(6) An extension in subsection 5 (a) shall
(a) only apply to the reduced area encompassing the geological structure in which the discovery
is located; and
(b) be limited to the time period necessary for the determination of whether the discovery is a
commercial discovery. (7) Where a contractor before the expiration of the exploration period has not submitted to the
Minister, a declaration that the petroleum discovered in a contract area is a commercial
discovery, the petroleum agreement shall terminate. Section 22—Relinquishment of contract area
(1) A contractor may submit to the Commission a proposal to relinquish a contract area or part
of a contract area. (2) The Commission may approve the proposal in accordance with prescribed conditions. (3) Where the contractor elects to enter into the first extension period, the contract area as of
the effective date of the petroleum agreement shall be reduced by at least fifty percent. (4) Where the contractor elects to enter into the second or third extension period, the retained
contract area shall not exceed twenty-five per cent of the contract area as of the effective date
of the petroleum agreement.

ion period, the retained
contract area shall not exceed twenty-five per cent of the contract area as of the effective date
of the petroleum agreement.

(5) Relinquishment under subsections (3) and (4) shall occur at the end of each relevant
working period despite any extension granted under section 21 (4). (6) The Minister may, in exceptional cases and in consultation with the Commission, determine
that the area to be relinquished should be smaller than the requirements set out in subsections
(3) and (4). (7) The determination under subsection (6) shall take into account the size, location or nature
of the contract area. 13

t in subsections
(3) and (4). (7) The determination under subsection (6) shall take into account the size, location or nature
of the contract area. 13

(8) The area relinquished shall, unless otherwise determined by the Minister in consultation
with the Commission, be contiguous and compact and of a size and shape that will permit the
effective conduct of petroleum activities in the relinquished area. (9) The area to be retained at the end of the exploration period to the extent possible shall
include geological structures containing discoveries in the contract area and shall be of the size
and shape approved by the Minister in consultation with the Commission. Section 23—Minimum work obligation
(1) A petroleum agreement shall include a term on the minimum work obligations, with a
corresponding minimum expenditure amount, to be fulfilled by a contractor during each
working period of the exploration phase
(2) Where a contractor fails to fulfil the minimum work obligations within the time period
stipulated in a petroleum agreement, and the Commission has not extended the duration of that
working period as provided under section 21 (4), the contractor shall pay the Corporation the
amount required to complete the unfulfilled portion of the work program for that working
period.

21 (4), the contractor shall pay the Corporation the
amount required to complete the unfulfilled portion of the work program for that working
period.

(3) The Minister may in the circumstance specified under subsection (2) terminate the
petroleum agreement. Section 24—Exploration drilling
(1) A contractor shall submit an application to the Commission for a permit to undertake
exploration drilling. (2) The contractor shall commence drilling operations after the contractor has received a
drilling permit from the Commission. (3) The contractor shall commence the exploration drilling after complying with the relevant
statutory environmental requirements as prescribed in the Environmental Protection Agency
Act, 1994 (Act 490) and other applicable enactments. (4) Each well or field shall be identified by a unique designation assigned by the Commission. (5) The contractor shall not change the designation, status or classification of a well or field
without the written approval of the Commission. (6) This section applies to the Corporation where it undertakes petroleum activities under
section 11 (1).

out the written approval of the Commission. (6) This section applies to the Corporation where it undertakes petroleum activities under
section 11 (1).

Section 25—Notification of petroleum discovery and appraisal
(1) A contractor shall furnish information requested by the Minister or the Commission and
submit periodic reports on any exploration carried out under a petroleum agreement as
prescribed. (2) Where exploration activities result in a petroleum discovery, the contractor shall
(a) within forty-eight hours after the discovery submit written notification of the discovery to
the Minister before notification to a third party; and
14

within forty-eight hours after the discovery submit written notification of the discovery to
the Minister before notification to a third party; and
14

(b) provide the full particulars of the discovery in writing to the Minister and the Commission
as soon as practicable and in any event within one hundred days after the discovery, stating
whether the discovery merits appraisal or not. (3) The date of the written notification to the Minister shall be the discovery date. (4) Where the contractor has stated in the particulars required by subsection (2) (b) that the
discovery does not merit appraisal, the contractor shall with effect from the date of notification
relinquish the contract area encompassing the geological structure in which the discovery is
located. (5) A contract area relinquished under subsection (4) shall not reduce the contract area to be
retained in accordance with section 22. (6) The delineation of the contract area to be relinquished is subject to the approval of the
Commission. (7) Where a contractor has indicated in the notification submitted to the Minister and the
Commission under subsection (2)(b) that the discovery merits appraisal, the contractor shall
prepare and submit to the Commission, with a copy to the Minister, a programme and schedule
to carry out an adequate and effective appraisal of the discovery.

and submit to the Commission, with a copy to the Minister, a programme and schedule
to carry out an adequate and effective appraisal of the discovery.

(8) The programme and schedule shall contain information that will enable the contractor to
delineate the extent of the accumulation of petroleum and to determine whether the discovery
constitutes a commercial discovery. (9) The appraisal period shall be specified in the petroleum agreement and shall not exceed two
years from the date of discovery. (10) The Commission may in special cases recommend to the Minister to grant an extension of
the appraisal period beyond two years and may stipulate conditions for the extension as
prescribed. (11) An appraisal programme is subject to the approval of the Commission and the Commission
may stipulate conditions for approval as prescribed. (12) Unless otherwise permitted by the Commission, a contractor shall not commence an
appraisal programme or enter into binding obligations relating to an appraisal programme until
the appraisal programme has been approved by the Commission. (13) The contractor shall prepare and submit to the Commission not later than ninety days after
completion of the appraisal programme the results of the appraisal programme stating whether
the discovery is commercial or not, and the basis for the decision.

of the appraisal programme the results of the appraisal programme stating whether
the discovery is commercial or not, and the basis for the decision.

(14) Where a contractor declares a discovery not to be commercial, the contract area
encompassing the geological structure in which the discovery is located shall be relinquished
by the contractor by notification in writing to the Commission within five days from the date
of the declaration that the discovery is not commercial. (15) The contract area to be retained in accordance with section 22 shall not reduce on account
of the relinquishment. 15

discovery is not commercial. (15) The contract area to be retained in accordance with section 22 shall not reduce on account
of the relinquishment. 15

(16) The Commission shall approve the delineation of the contract area and relinquishment
takes effect from the date of notification by the contractor as approved by the Commission. (17) This section applies to the Corporation where it undertakes petroleum activities under
section 11 (1) and the Minister may determine the appraisal period, which may exceed the
limitation set out in subsections (9) and (10). Development and Production
Section 26—Prudent exploitation
(1) A contractor shall develop and produce petroleum in a manner that will ensure the
maximum long term recovery of the petroleum. (2) The contractor shall ensure that development and production of petroleum is conducted in
accordance with best international practice and sound economic principles, and in a manner
that will ensure that waste of petroleum or loss of reservoir energy is avoided. (3) The contractor shall conduct continuous evaluation of the depletion strategy and technical
solutions to problems arising from the exploitation and shall take the necessary measures to
optimise the petroleum resources.

strategy and technical
solutions to problems arising from the exploitation and shall take the necessary measures to
optimise the petroleum resources.

(4) This section applies to the Corporation where it undertakes petroleum activities in
accordance with section 11 (1). Section 27—Plan of development and operation
(1) A contractor shall, where a discovery is declared to be commercial, submit to the Minister
for approval a plan of development and operation in respect of any petroleum field to be
developed. (2) The Minister shall set a deadline for the submission of the plan. (3) The plan of development and operation shall contain a description of the development
programme and production programme together with an environmental report approved by the
appropriate institutions in accordance with applicable enactments.

amme and production programme together with an environmental report approved by the
appropriate institutions in accordance with applicable enactments.

(4) The description of the development and production programme shall provide detailed
information on the economic, reserves, technical, operational, safety, commercial, local content
and environmental components of the proposed development, including
(a) a description of development strategy and concept;
(b) an economic assessment of the different development methods, estimated investments,
operational costs and selection criteria;
(c) a plan covering the total development, where the development is proposed in two or more
phases;
(d) an assessment of the potential for development of further petroleum resources within the
contract area to ensure the maximum long term recovery of the resources;
(e) tie-ins with other petroleum fields where applicable;
16

urces within the
contract area to ensure the maximum long term recovery of the resources;
(e) tie-ins with other petroleum fields where applicable;
16

(f) area studies for the possibility of co-ordination of petroleum activities including the
development of nearby petroleum fields;
(g) proposed drilling and well completion plans;
(h) geological parameters and reservoir engineering methodology;
(i) facilities for production, storage, transportation and delivery of petroleum;
(j) a development schedule;
(k) a long-term production schedule;
(I) a description of technical solutions including possible solutions for enhanced recovery;
(m) a description of capacities of facilities;
(n) solutions for the efficient use of energy, and the prevention and minimisation of
environmentally harmful discharges and emissions;
(0) the disposal and use of associated gas where applicable;
(p) management systems, including information on the planning, organisation and
implementation of the development;
(q) operation and maintenance;
(r) a description of fiscal metering systems;
(s) petroleum marketing plan;
(t) security plan;
(u) a financing plan for the development;
(v) a health and safety assessment report;
(w) an emergency preparedness plan;
(x) facilities for transportation, utilisation or treatment of petroleum;
(y) decommissioning and disposal of facilities;
(z) any applications for permits and licences required under applicable enactments in
connection with petroleum activities related to the plan;
(aa) a local content plan; and
(bb) an employment and recruitment programme and a technology transfer plan.

petroleum activities related to the plan;
(aa) a local content plan; and
(bb) an employment and recruitment programme and a technology transfer plan.

(5) The Minister may require the contractor to ensure that a marginal field delineated before
and after approval of the plan of development and operation, is optimally developed and
produced. (6) The plan of development and operation shall include details for the construction of facilities
to avoid gas venting or flaring under normal operating conditions. 17

velopment and operation shall include details for the construction of facilities
to avoid gas venting or flaring under normal operating conditions. 17

(7) In consultation with the Commission, the Minister may in the national interest limit the
approval to the development and production of individual reservoirs or phases and the
development and production may be subject to conditions determined by the Minister,
including requirements relating to additional capacities for additional resources or third party
access. (8) The Minister may revise the long term production schedule if the revision is warranted by
resource management considerations or significant socio-economic considerations. (9) Unless otherwise permitted by the Minister, a contractor shall not
(a) enter into contracts relating to the plan of development and operation, or
(b) commence construction works
until the plan of development and operation has been approved by the Minister. (10) A plan of development and operation becomes effective upon the prior written approval
of the Minister. (11) The contractor shall promptly notify the Minister in writing of any deviation from the
assumptions and preconditions on which a plan has been submitted or approved.

shall promptly notify the Minister in writing of any deviation from the
assumptions and preconditions on which a plan has been submitted or approved.

(12) Any deviation or alteration to the plan of development and operation or material alteration
to the facility requires the written approval of the Minister. (13) The Minister may require a new or amended plan of development and operation to be
submitted before the approval of any deviation or alteration. (14) Where a contractor does not submit a plan of development and operation within the time
limit set by the Minister in accordance with subsection (1), and the Minister has not extended
the time limit, the area encompassing the field to be developed shall be relinquished by the
contractor. (15) This section applies to the Corporation where it undertakes petroleum activities in
accordance with section 11 (1).

linquished by the
contractor. (15) This section applies to the Corporation where it undertakes petroleum activities in
accordance with section 11 (1).

Section 28—Restrictions on approval of plan of development and operation
(1) The Minister shall not approve a plan of development and operation unless
(a) the plan would ensure efficient, beneficial and timely exploitation of the petroleum
resources concerned;
(b) the plan takes into account good petroleum industry practice and safety factors;
(c) the contractor has adequate financial resources and technical and industrial competence and
experience to undertake effective development and production operations;
(d) the descriptions and proposals of the contractor under section 27 (4) are satisfactory to the
Minister;
(e) the contractor is able and willing to comply with the conditions on which a plan of
development and operation is approved;
18

ory to the
Minister;
(e) the contractor is able and willing to comply with the conditions on which a plan of
development and operation is approved;
18

(f) the local content plan, the proposed employment, recruitment and training of Ghanaian
citizens and the technology transfer plan have been approved by the Commission; and
(g) the contractor has adequate insurance cover; and
(h) the Minister has received recommendation from the Commission and relevant agencies. (2) A plan of development and operation shall not be approved if a contractor is in default
under a petroleum agreement. (3) Where a plan of development and operation is not approved, the Minister shall by written
notice to the contractor state the reasons for non-approval. (4) Where a plan of development and operation is not approved by the Minister, the area
covered by the plan of development and operation shall be relinquished by the contractor. (5) This section applies to the Corporation where it undertakes c petroleum activities under
section 11 (1). Section 29—Postponement of development
(1) Where public interest or national interest requires, the Minister may, after consultation with
the contractor, postpone the development of a field.

1) Where public interest or national interest requires, the Minister may, after consultation with
the contractor, postpone the development of a field.

(2) In the event of a postponement under subsection (1), the term of the petroleum agreement
shall be extended for the period of postponement, and the obligation to pay acreage fees during
that period shall be suspended. (3) This section applies to the Corporation where it undertakes petroleum activities under
section 11 (1). Section 30—Commencement of petroleum production
(1) Production of petroleum shall not commence without the written approval of the
Commission. (2) The Commission shall, before granting approval for the commencement of petroleum
production, consider whether the contractor has developed the field in accordance with the plan
of development and operation and with any conditions specified in the approved plan of
development and operation. (3) This section applies to the Corporation where it undertakes petroleum activities under
section 11 (1). Section 31—Production programme and permits
(1) A contractor shall not produce or inject petroleum if the contractor does not have an annual
permit granted for that purpose by
(2) The annual permit shall be obtained by application in writing to the Commission.

ractor does not have an annual
permit granted for that purpose by
(2) The annual permit shall be obtained by application in writing to the Commission.

(3) The form and content of the application for an annual production permit to produce and
inject petroleum shall be as prescribed and shall include a long-term production forecast
updated from the plan of development and operation. 19

e and
inject petroleum shall be as prescribed and shall include a long-term production forecast
updated from the plan of development and operation. 19

(4) The Commission shall, upon receipt of the application from the contractor, issue an annual
production permit stipulating the quantity of petroleum which may be produced or injected. (5) The stipulation of the quantity specified in subsection (4) shall be based on the long-term
production schedule in the plan of development and operation, unless new information on the
reservoir or other new relevant circumstances warrant otherwise. (6) The Commission may include in the production permit the permission to flare or vent
petroleum as provided in section 33. (7) The Commission may upon receipt of the application made by a contractor approve test
production of a petroleum field and the duration, quantity and other conditions for the test
production shall be determined by the Commission. (8) The Commission may require a contractor to submit a report on field related matters,
including alternative schemes for production and where applicable, the injection and the total
recovery factor for the various schemes.

lated matters,
including alternative schemes for production and where applicable, the injection and the total
recovery factor for the various schemes.

(9) The Commission may direct a contractor to take appropriate steps to increase or reduce the
rate of petroleum production to a rate that will enhance optimum recovery of petroleum from
the field and that will not exceed the capacity of existing production facilities. (10) The Commission in consultation with the Minister may direct the modification of the long
term production schedule approved in accordance with this section when the national interest
so requires. (11) The Minister shall, where the decision is related to several fields and requires a reduction
in production, endeavour to apportion the reduction proportionately among those fields to the
extent possible. (12) This section applies to the Corporation where it undertakes petroleum activities under
section 11 (1). Section 32—Utilisation of associated natural gas
(1) Any natural gas produced in association with crude oil may be used in petroleum activities
as agreed between a contractor and the Corporation, in consultation with the Commission and
in accordance with applicable enactments, good petroleum industry practice and approved
production plans.

ion, in consultation with the Commission and
in accordance with applicable enactments, good petroleum industry practice and approved
production plans.

(2) This section applies to the Corporation where it undertakes petroleum activities under
section 11(1). Section 33—Restrictions on flaring
(1) A person shall not flare or vent petroleum, unless that person is authorised under subsection
(2) or (3). (2) The Commission shall after consultation with the Environmental Protection Agency
authorise a person to flare or vent petroleum where
(a) it is necessary in the interests of normal operational safety of the petroleum activities;
(b) it is necessary in order to comply with a requirement imposed under an Act; or
20

erests of normal operational safety of the petroleum activities;
(b) it is necessary in order to comply with a requirement imposed under an Act; or
20

(c) it is warranted by exceptional circumstances. (3) In case of an emergency, and where there is insufficient time to request an authorisation
from the Commission, a contractor may flare or vent petroleum without the approval of the
Commission under subsection (2), but shall ensure that the flaring or venting is done in
accordance with prescribed procedure and kept at the lowest level possible. (4) Where petroleum has been flared or vented in an emergency, the contractor shall
immediately inform the Minister, Environmental Protection Agency and the Commission of
the event. (5) This section applies to the Corporation where it undertakes petroleum activities under
section 11 (1). Section 34—Co-ordination of petroleum activities and unitisation
(1) Where an accumulation of petroleum extends beyond the boundaries of one contract area
into one or more other contract areas, the Minister in consultation with the Commission may,
for the purpose of ensuring optimum recovery of petroleum from the accumulation of
petroleum, direct the relevant contractors, to enter into an agreement to develop and produce
the accumulation of petroleum as a single unit.

ation of
petroleum, direct the relevant contractors, to enter into an agreement to develop and produce
the accumulation of petroleum as a single unit.

(2) The agreement shall be entered into within a period specified by the Minister and shall be
submitted to the Minister for approval. (3) Where two or more accumulations of petroleum are in proximity to one another but are
(a) in different contract areas, or
(b) in one contract area and an area not covered by a petroleum agreement,
the Minister may require the accumulations of petroleum to be developed and produced in a
coordinated manner in order to ensure efficient petroleum activities. (4) Where an accumulation of petroleum extends beyond the boundaries of a contract area into
an area not covered by a petroleum agreement or an authorisation under section 11 (1), the
Minister may authorise the Corporation to enter into a contract for the development and
production of the accumulation of petroleum, and require the accumulation of petroleum to be
developed as a single unit. (5) The Minister may stipulate conditions and make appropriate directions to the Corporation
and the contractor as prescribed for the unitised development and such conditions, if
significantly different from the conditions of the adjoining contract area, shall be ratified by
Parliament.

tised development and such conditions, if
significantly different from the conditions of the adjoining contract area, shall be ratified by
Parliament.

Section 35—Cross-border cooperation and unitisation
The Republic may, where an accumulation of petroleum extends onto the land or the
continental shelf of another country, seek to reach agreement with that other country on the
most efficient co-ordination of petroleum activities in connection with accumulation of
petroleum as well as the apportionment of the accumulation of petroleum. Section 36—Third party use of production facilities
21

n with accumulation of
petroleum as well as the apportionment of the accumulation of petroleum. Section 36—Third party use of production facilities
21

(1) The Commission may direct that facilities which are owned by a contractor or the
Corporation may be used
(a) by others if warranted by considerations for efficient operation and resource management,
or
(b) for the benefit of society where the use would not unreasonably interfere with the usage
requirements of the contractor or the Corporation or of any person who has already been
granted the right of use. (2) An agreement on the use of facilities shall be submitted to the Commission for approval
and the Commission may, as a condition for approval, modify the tariffs and other conditions
agreed between the parties, having due regard to resource management considerations and a
reasonable return on investments for the owner. (3) The Commission may, where an agreement for use is not reached within a reasonable period
of time, stipulate the tariffs and other conditions for use, having due regard to resource
management considerations and a reasonable return on investments for the owner.

he tariffs and other conditions for use, having due regard to resource
management considerations and a reasonable return on investments for the owner.

(4) Where required for resource management considerations, the Commission may alter the
conditions of a previously approved agreement for third party use to ensure the implementation
or continuation of projects. (5) In stipulating new conditions, the Commission shall have due regard to resource
management considerations and a reasonable return on investments for the owner. (6) The rights and obligations of the contractor under this section apply to the Corporation
where it undertakes petroleum activities under section 11 (1). Section 37—Measurement of petroleum obtained
(1) A contractor shall measure and analyse the petroleum produced, transported and sold from
a field by a method customarily used in good international petroleum industry practice and in
applicable enactments. (2) The Commission shall after consultation with the Standards Authority approve the
measurement system which may be verified as prescribed. (3) A contractor shall not alter the
(a) method of measurement, or
(b) calibration of any equipment used for measurement without the written approval of the
Commission.

hall not alter the
(a) method of measurement, or
(b) calibration of any equipment used for measurement without the written approval of the
Commission.

(4) The Commission may require an alteration to be made only in the presence of a person
authorised by the Commission
(5) The Commission may direct that the method of measurement or the calibrated equipment
be tested or examined by the relevant agency occasionally, or at the intervals and by the means
prescribed. (6) A test or examination under subsection (5) may be done in the presence of a person
authorised by the Commission. 22

s and by the means
prescribed. (6) A test or examination under subsection (5) may be done in the presence of a person
authorised by the Commission. 22

(7) Where a• measuring method or calibrated equipment is found to be incorrect, that method
or calibrated equipment is considered to have existed in that condition during a" period that is
represented by half of the period from the last occasion when the method or equipment was
tested or examined to the date when the method or equipment was found to be incorrect. (8) Royalty and any other payments due to the Government, the Commission or the Corporation
under the petroleum agreement for that period shall be adjusted accordingly. (9) A contractor who knowingly uses an inaccurate measuring method or an uncalibrated
equipment commits an offence and is subject to penalties under section 93. (10) The Commission shall install facilities to monitor production. (11) This section applies to the Corporation where it undertakes petroleum activities under
section 11 (1).

install facilities to monitor production. (11) This section applies to the Corporation where it undertakes petroleum activities under
section 11 (1).

Transportation, Treatment and Storage
Section 38—Licence to install and operate facilities for transportation, treatment and storage
of petroleum
(1) A person shall not install or operate a facility for transportation, treatment or storage of
petroleum without a licence granted by the Minister unless there is an existing right to install
and operate the facility derived from the approval of a plan of development and operation. (2) A person shall not commence installation and operation of a facility if that person does not
have a permit granted by the Commission. Section 39—Application to install and operate facilities
(1) Subject to subsection (4), an application for a licence to install and operate a facility for
transportation, treatment or storage of petroleum shall specify a description of the facilities and
be supported with a scoping report approved in accordance with applicable enactments.

e of petroleum shall specify a description of the facilities and
be supported with a scoping report approved in accordance with applicable enactments.

(2) The description shall contain detailed information on economic, resources, technical,
operational, safety related, commercial, local content and environmental components of the
proposed project and a scoping report approved in accordance with applicable enactments,
including
(a) information on the destination of pipeline, route, landing point, dimension and
transportation capacity of the facility, as well as the relevant assumptions and selection criteria;
(b) information on the ownership of the facility;
(c) a description of technical solutions, including solutions to prevent and minimize
environmentally harmful discharges and emissions;
(d) information on management systems, including information on the planning, organisation
and implementation of the development;
(e) area studies for the possibility of third party access and use of facilities;
(f) a development schedule;
(g) a description of the capacities of facilities;
23

ies for the possibility of third party access and use of facilities;
(f) a development schedule;
(g) a description of the capacities of facilities;
23

(h) information on operation and maintenance;
(i) information on management systems, including information on the planning, organisation
and implementation of the construction project;
(j) estimated investments and operational costs;
(k) a financing plan;
(l) information on project economics;
(m) information on any applications for approvals, permits and licences required under other
applicable enactments;
(n) information as to how the facilities may be decommissioned when the petroleum activities
have ceased;
(0) a description of emergency preparedness;
(p) information on other factors of importance to the resource management; and
(q) other information required under the safety regulations of the applicant in force at any time. (3) Where the information contained in the description provides a proposal for the
implementation of an activity, the Minister may require the applicant to provide alternative
proposals. (4) The Minister may, in consultation with the relevant agencies, grant an exemption from a
particular requirement under subsection (1) where the circumstances require.

ay, in consultation with the relevant agencies, grant an exemption from a
particular requirement under subsection (1) where the circumstances require.

(5) A material deviation or alteration of the terms and preconditions on which an application
has been submitted or approved and a significant alteration of facilities shall require the prior
written approval of the Minister and may require a new or amended application to be submitted
for that approval. (6) An applicant shall not enter into a contract of significant value or commence construction
works until the licence has been granted by the Minister. Section 40—Conditions for granting of a licence to install and operate facilities
(1) A licence to install and operate a facility for 'transportation, treatment or storage of
petroleum shall include
(a) ownership of the facility;
(b) the landing point, routing, dimension and capacity for other pipelines;
(c) the main technical description and location for other facilities; and;
(d) decommissioning plan. (2) The Minister may, when granting a licence to install and operate a facility, and at any
subsequent point in time
(a) stipulate tariffs set by the Commission for use of the facility; and
(b) direct
24

all and operate a facility, and at any
subsequent point in time
(a) stipulate tariffs set by the Commission for use of the facility; and
(b) direct
24

"(i) the tie-in of the facility to another facility;
(ii) an increase in capacity of the facility;
(iii) a modification of the facility to enable its use for different types of petroleum; and
(iv) the type of petroleum to be transported, treated or stored. (3) Directives in subsection (2) (b) shall not have the effect of unreasonably raising the costs
or impeding the use of the facility as requested in the application or as granted by the Minister
in an existing licence. (4) The cost of implementation of the directives mentioned may be borne by the party in whose
favour the directive was made or shall be taken into account when the tariff is stipulated. (5) The Minister shall appoint one of the licensees as operator and may approve a change of
operator upon the request of the licensees or when there are significant reasons to do so. (6) The Minister shall grant the licence for a fixed period of time.

upon the request of the licensees or when there are significant reasons to do so. (6) The Minister shall grant the licence for a fixed period of time.

(7) The licence may be extended on similar or new terms on application to the Minister
Section 41—Landing of petroleum
For the purpose of this Act, the Minister may in consultation with the Commission and
contractor, determine the manner and place in which petroleum is delivered by the contractor
and the Corporation. Section 42—Third party use of transportation, treatment and storage facilities
(1) An owner and operator of a facility for the transportation, treatment or storage of petroleum
shall grant third party access to the facility on fair, transparent and non-discriminatory terms. (2) The access shall not be to the detriment of the needs of the owner, operator or other users
who have already been granted a right of use. (3) If the throughput capacity of the facility is insufficient to handle and transport the total
production entitlements of all users, the owners of the facility shall have a preferential right to
the available capacity in proportion to the ownership share. (4) The remaining available capacity shall be shared between the users in proportion to the total
production entitlement of each user which would otherwise be available for transportation.

hall be shared between the users in proportion to the total
production entitlement of each user which would otherwise be available for transportation.

(5) The owner or operator of a petroleum pipeline may charge a transportation tariff for the use
of the pipeline by other persons. (6) Unless otherwise determined by the Commission,
(a) the transportation tariffs shall cover the cost incurred by the owner of the pipeline in
constructing, financing, operating and maintaining the pipeline and related facilities, including
a reasonable rate of return on the investment, taking into account the risks assumed by the
owner; and
(b) each user including the owner of the pipeline, shall pay a transportation tariff calculated in
relation to the share of the petroleum transported. 25

each user including the owner of the pipeline, shall pay a transportation tariff calculated in
relation to the share of the petroleum transported. 25

(7) A person is not entitled to the use of a transportation, treatment or storage facility unless
that person has entered into an agreement with the owner or operator of the facility. (8) The parties shall submit an agreement on the use of transportation, treatment and storage
facilities to the Commission for approval. (9) The Commission in consultation with the Minister may, as a condition for approval, change
the tariffs and other conditions agreed between the parties, having due regard to resource
management considerations while allowing the owner reasonable returns, taking inton[sic]
account, investment and risks. (10) Where an agreement for use is not reached within a reasonable period of time, the
Commission in consultation with the Minister may determine the tariffs or other conditions for
the use, having regard to resource management considerations while allowing the owner
reasonable returns taking into account investments and risks. (11) Where required for resource management considerations, the Commission in consultation
with the Minister may alter the conditions of an approved agreement in order to ensure
implementation or extension of projects.

ission in consultation
with the Minister may alter the conditions of an approved agreement in order to ensure
implementation or extension of projects.

(12) The Commission shall, in altering the conditions of an approved agreement have due
regard to resource management consideration, investments and risks. Cessation, Decommissioning and Removal of Facilities
Section 43—Decommissioning plan
(1) A licensee or contractor who operates a petroleum facility shall submit a decommissioning
plan to the Minister and the Minister shall seek the advice of the Commission. (2) Except where the Minister determines otherwise, the decommissioning plan shall be
submitted not more than five years and not later than two years before the date on which
(a) the use of the petroleum facility to which the decommissioning plan relates is expected to
permanently cease operation, or
(b) the licence or the petroleum agreement to which the decommissioning plan relates will
expire. (3) Where the licence or the petroleum agreement is terminated earlier than its expiration date,
the decommissioning plan shall be submitted by the licensee or contractor concerned in
accordance with this section as soon as is practicable and in any event not later than ninety
days after the termination.

e or contractor concerned in
accordance with this section as soon as is practicable and in any event not later than ninety
days after the termination.

(4) The licensee or contractor shall immediately give notice to the Minister if the use of the
petroleum facility is expected to cease before the expiry of the licence or the petroleum
agreement. (5) The decommissioning plan shall contain a detailed proposal for
(a) a shutdown of operations and disposal of petroleum facilities; or
(b) further use in petroleum activities of the facilities in place. 26

posal for
(a) a shutdown of operations and disposal of petroleum facilities; or
(b) further use in petroleum activities of the facilities in place. 26

(6) A disposal under subsection 5 (a) may include
(a) removal of petroleum facilities for use elsewhere;
(b) uses other than for petroleum activities; or
(c) complete or partial removal or abandonment of the facilities. (7) The plan shall contain information and evaluations necessary for the Minister to make a
decision relating to disposal as provided in subsections (5) and (6) and an assessment of the
environmental a[sic] social impact of the disposal. (8) This section applies to the Corporation where it undertakes petroleum activities under
section 11 (1). Section 44—Decision on the decommissioning plan
(1) The Minister may approve the decommissioning plan and shall set out a schedule for
implementation of the plan. (2) Where the Minister disapproves of the decommissioning plan, the Minister shall notify the
licensee or contractor in writing stating the reasons for the disapproval and request that
(a) certain conditions be satisfied by the contractor or licensee; or
(b) a new or amended decommissioning plan be resubmitted to the Minister.

t that
(a) certain conditions be satisfied by the contractor or licensee; or
(b) a new or amended decommissioning plan be resubmitted to the Minister.

(3) In making the decision on the approval or disapproval of the decommissioning plan, the
Minister shall consider the various interests involved, including the impact of the decision on
local communities, agriculture, fisheries and other affected interests and the environmental
safety, technical and economic consequences of the disposal alternatives. (4) A licensee or contractor who operates a petroleum facility that is the subject of an approved
decommissioning plan shall ensure that the decommissioning plan is implemented in
accordance with its terms and conditions as specified. (5) A licensee or contractor who has implemented a decommissioning plan shall submit a report
on the work carried out to the Minister. (6) The obligations imposed under subsections (4) and (5) are binding on the licensee or
contractor after the expiration of the applicable licence or the petroleum agreement. (7) An assignor with a participating interest in a petroleum agreement or a holder of a licence
assigned in whole or in part, shall have secondary liability for the financial obligations for the
cost of implementing the decommissioning plan.

ence
assigned in whole or in part, shall have secondary liability for the financial obligations for the
cost of implementing the decommissioning plan.

(8) The financial obligation is limited to costs related to petroleum facilities, including wells,
which existed at the time of the assignment, and is limited to a share of the costs calculated on
the basis of the size of the participating interest assigned. (9) If a decommissioning plan is not implemented within the stipulated time limit and in
accordance with the terms and conditions of the approval, the Minister, in consultation with
the Commission may, take necessary measures for implementing the decommissioning plan
for and on behalf of the licensee or contractor responsible for the disposal and on the account
27

measures for implementing the decommissioning plan
for and on behalf of the licensee or contractor responsible for the disposal and on the account
27

and risk of the licensee or contractor including the engagement of sub-contractors for carrying
out of the plan. Section 45—Decommissioning fund
A licensee or contractor shall establish a decommissioning fund as prescribed. Section 46—Plugging and abandonment of well
(1) A contractor shall submit to the Commission an immediate notice of the decision of the
contractor to abandon a well. (2) A contractor who submits a notice under subsection (1) shall treat and plug the abandoned
well. (3) The closure or plugging of a well shall be carried out only with the prior written approval
of the Commission and in the manner consistent with international best practice and approved
by the Commission. (4) A contractor shall conduct a survey of wells plugged and abandoned as prescribed. (5) This section applies to the Corporation where it undertakes petroleum activities under
section 11 (1).

wells plugged and abandoned as prescribed. (5) This section applies to the Corporation where it undertakes petroleum activities under
section 11 (1).

Section 47—Restoration of affected areas
(1) A contractor or a licensee who operates a petroleum facility that affects an area shall after
the termination of the petroleum activities restore the affected area and remove the causes of
damage or danger to the environment in accordance with the applicable enactments. (2) This section applies to the Corporation where it undertakes petroleum activities under
section 11 (1). Section 48—Liability for decommissioning
(1) A contractor or a licensee who is under an obligation to implement an approved
decommissioning plan under section 44 is subject to strict liability towards the Republic for
any loss or damage caused, in connection with the decommissioning of the facility or other
implementation of the decommissioning plan. (2) This section applies to the Corporation where it undertakes petroleum activities under
section 11 (1).

implementation of the decommissioning plan. (2) This section applies to the Corporation where it undertakes petroleum activities under
section 11 (1).

Section 49—Compliance
(1) A licensee, contractor, sub-contractor, the Corporation and other persons engaged in
petroleum activities under this Act shall comply with the Act, the Regulations, directives and
requirements issued under this Act through the establishment, implementation and continuous
development of an appropriate management system. (2) A licensee, contractor, sub-contractor, the Corporation and any other person engaged in
petroleum activities under this Act shall ensure compliance with the Regulations, directives
and requirements issued pursuant to this Act and any other applicable enactment. 28

this Act shall ensure compliance with the Regulations, directives
and requirements issued pursuant to this Act and any other applicable enactment. 28

(3) A licensee, contractor, sub-contractor, the Corporation and any other person engaged in
petroleum activities under this Act shall ensure that persons performing work directly or
indirectly for them comply with the Regulations, directives and requirements issued under this
Act. General Requirements for Petroleum Activities
Section 50—Petroleum operating standards
(1) A person conducting petroleum activities under this Act shall conduct petroleum activities
in a prudent manner and in accordance with applicable enactments, standards, best international
practice and sound economic principles. (2) Prudent petroleum activities as prescribed in subsection (1) include reasonable steps to
(a) optimise the ultimate recovery of petroleum from a petroleum field;
(b) prevent waste of petroleum;
(c) secure the health, safety and welfare of persons and communities; and
(d) protect the environment and ensure its sustainability. (3) Petroleum activities shall be conducted in accordance with directives given, restrictions
imposed or requirements made by the Minister, the Commission and other relevant agencies.

conducted in accordance with directives given, restrictions
imposed or requirements made by the Minister, the Commission and other relevant agencies.

Section 51—Supervision and inspection
(1) The Commission may, in the performance of its functions, authorise a person to supervise
or inspect petroleum activities to ensure that the activities are carried out in accordance with
this Act.

functions, authorise a person to supervise
or inspect petroleum activities to ensure that the activities are carried out in accordance with
this Act.

(2) The Commission or the person authorised by the Commission under subsection (1) may
(a) enter any area, structure, platform, vehicle, installation, vessel, aircraft, facility, office or
building used for petroleum activities;
(b) inspect, test or audit the works, equipment, operations, records, registers and financial
accounts of a licensee, contractor, sub-contractor or the Corporation that is related to or used
in petroleum activities;
(c) in collaboration with relevant authorities, take or remove samples of petroleum, water or
other substance for the purposes of analysis or testing;
(d) inspect, take extracts from, or make copies of any document relating to the petroleum
activities;
(e) direct a vessel or a mobile facility to be brought to a port in Ghana when considered
necessary for the purpose of supervision or inspection under this Act; or
(f) conduct examinations, inquiries and relevant activities that are necessary to ensure that the
provisions of this Act, the Regulations, the petroleum agreement and any licence are being
complied with. 29

ies that are necessary to ensure that the
provisions of this Act, the Regulations, the petroleum agreement and any licence are being
complied with. 29

(3) A person subject to supervision or inspection under this Act shall, when so demanded by
the Commission or a person authorised by the Commission and in spite of any requirement for
confidentiality, provide information that is considered necessary for the performance of the
supervision or inspection. (4) A licensee, contractor, sub-contractor or the Corporation shall provide the Commission or
the person authorised by the Commission under subsection (1) with reasonable facilities and
assistance to enable the effective and timely performance of the supervisory or inspection
functions under this section. (5) The Commission may issue directives as are necessary for the implementation of this
section. (6) The Commission may require the licensee, contractor, sub-contractor or the Corporation
being supervised or inspected under this section to bear the expenses related to the supervision
or inspection.

tor, sub-contractor or the Corporation
being supervised or inspected under this section to bear the expenses related to the supervision
or inspection.

Section 52—Ownership of petroleum data
(1) Data and information obtained by a licensee, contractor, sub-contractor or the Corporation
as a result of petroleum activities and the geological, geophysical, technical, financial and
economic reports, studies, interpretations and analyses prepared by or on behalf of a licensee,
a contractor, sub-contractor or the Corporation in connection with petroleum activities shall be
the property of the Republic. (2) Subject to section 53 (5), a licensee, contractor or sub-contractor may, for the duration of a
licence or petroleum agreement, use the data and information under subsection (1). (3) The licensee, contractor, sub-contractor or Corporation shall provide to the Commission
data and information as well as the reports, studies, interpretations and analyses under
subsection (1). (4) The Commission may permit a licensee, contractor, subcontractor or the Corporation to
market the right of use to geological, geophysical and technical data, reports, studies and
interpretations on terms to be agreed. (5) The Commission may provide any data or information to the Corporation for its use.

ta, reports, studies and
interpretations on terms to be agreed. (5) The Commission may provide any data or information to the Corporation for its use.

Section 53—Samples, data and information
(1) A licensee, contractor, sub-contractor and the Corporation shall maintain complete and
accurate records in Ghana of the petroleum activities carried out by the licensee, contractor,
sub-contractor or the Corporation shall also complete and keep accurate books of account,
records and registers relating to these activities. (2) A licensee, contractor, sub-contractor or the Corporation shall not export or permit the
retention or exportation of data, documents or geological and reservoir samples including
cuttings, cores, liquid and gas samples without the written approval of the Commission. (3) At the expiry of a licence or petroleum agreement, the data and information under section
52 (1) shall be returned to the Commission. 30

mmission. (3) At the expiry of a licence or petroleum agreement, the data and information under section
52 (1) shall be returned to the Commission. 30

(4) Where the data, documents or samples are exported, the contractor, sub-contractor or
licensee shall return the data, documents or samples to this country forthwith at the written
request of the Commission. (5) A licensee, contractor, sub-contractor or the Corporation shall, where any interpretation or
analysis is done outside the country, forward to the Commission not later than thirty days after
the interpretation or analysis, copies of the reports on the interpretation or analysis. (6) A licensee, contractor, sub-contractor or the Corporation shall keep confidential the data
acquired and any existing data released by the Commission to the licensee, contractor, sub
contractor or the Corporation and shall not disclose the data to a third party without permission
from the Commission except as may otherwise be provided in accordance with the terms of a
petroleum agreement or petroleum sub-contract. Section 54—Reporting
(1) A contractor and a licensee shall, at the intervals determined by the Commission, submit to
the Commission information as prescribed. (2) This section applies to the Corporation where the Corporation undertakes petroleum
activities under section 11 (1).

ion information as prescribed. (2) This section applies to the Corporation where the Corporation undertakes petroleum
activities under section 11 (1).

Section 55—Information concerning petroleum activities
(1) The Minister or the Commission may request a person conducting petroleum activities to
provide information relevant to the activities. (2) The information shall be submitted to the Minister, the Commission or other relevant
agency as designated by the Minister or the Commission, within the specified period. (3) Information received under this section may be used only for the purposes prescribed. Section 56—Petroleum register
(1) The Commission shall establish and maintain a register of petroleum agreements, licences,
permits and authorisations as prescribed. (2) The register shall be open to the public. Section 57—Mortgaging of participating interest
(1) A contractor or licensee shall not mortgage a participating interest under
(a) a petroleum agreement; or
(b) a licence under section 38 without the written approval of the Minister. (2) A contractor or licensee shall not mortgage the participating interest under subsection (1)
for the benefit of petroleum activities outside this country.

ontractor or licensee shall not mortgage the participating interest under subsection (1)
for the benefit of petroleum activities outside this country.

(3) The Minister may, in special circumstances, permit mortgaging of the participating interest
for the benefit of petroleum activities in this country which is not related to the petroleum
agreement or licence. 31

g of the participating interest
for the benefit of petroleum activities in this country which is not related to the petroleum
agreement or licence. 31

(4) The participating interest under subsection (1) comprises those rights which at any time
arise from the petroleum agreement or licence as well as other rights in connection with
activities carried out in accordance with the petroleum agreement or licence. (5) A mortgage under this section shall be registered in the petroleum register. (6) A mortgage registered under this section shall lapse if the facility mortgaged is
decommissioned. Section 58—Security for fulfilment of obligations
A licensee, contractor or sub-contractor shall provide the Minister with the performance bonds
or guarantees as the Minister may require for the fulfilment of the obligations undertaken by
the licensee, contractor or sub-contractor and for possible liabilities arising out of the petroleum
activities undertaken under the licence, petroleum agreement or petroleum sub-contract. Section 59—Liabilities
(1) Subject to subsection (2), licensee parties or contractor parties, who jointly hold a petroleum
agreement or a licence are jointly and severally responsible to the Republic for the financial
and other obligations and liabilities arising out of the petroleum activities.

are jointly and severally responsible to the Republic for the financial
and other obligations and liabilities arising out of the petroleum activities.

(2) A contractor and a licensee are not jointly and severally responsible for payment of taxes,
royalties in cash and additional oil entitlement. (3) A licensee, contractor or sub-contractor shall keep the Republic and the Corporation
indemnified against claims arising from the operations of the licensee, contractor or sub
contractor brought by a third party. (4) Where third party liability is incurred by a person who under-takes a task for a licensee,
contractor, sub-contractor or the Corporation, the licensee, contractor, sub-contractor or the
Corporation is liable for damages to the same extent as, and jointly and severally with the
person undertaking the task and if applicable, the employer of the person. Section 60—Employment and training of Ghanaian citizens
(1) A licensee, contractor, sub-contractor or the Corporation shall ensure that Ghanaian citizens
who have the requisite expertise or qualifications in various levels of activities are employed
in accordance with applicable enactments, the terms and conditions of the licence, petroleum
agreement or petroleum sub-contract.

ivities are employed
in accordance with applicable enactments, the terms and conditions of the licence, petroleum
agreement or petroleum sub-contract.

(2) A person carrying out petroleum activities shall be required to employ Ghanaian citizens in
categories and functions as prescribed. (3) Subject to subsection (2), a person carrying out petroleum activities shall not engage in
discriminatory practices on grounds of race, tribe, nationality or gender in the conditions of
service provided for personnel. (4) A person carrying out petroleum activities shall in consultation with the Commission
prepare and implement plans and programmes to train citizens in all aspects of petroleum
activities in accordance with the Regulations and the terms of the licence, petroleum agreement
or petroleum sub-contract. 32

all aspects of petroleum
activities in accordance with the Regulations and the terms of the licence, petroleum agreement
or petroleum sub-contract. 32

Section 61—Use of Ghanaian goods and services
(1) A licensee, contractor, sub-contractor or any other allied entity shall
(a) acquire materials, equipment, machinery and consumer goods which are produced or
provided for in the country by an indigenous Ghanaian company and which
(i) are of the same or similar quality as foreign materials, equipment, machinery and consumer
goods, and
(ii) are available for sale and delivery in due time at prices which are not more than ten per cent
higher than the imported items including transportation and insurance costs and customs
charges due;
(b) contract local service providers to the extent to which the services they provide are similar
to those available on the international market and their prices, when subject to the same tax
charges, are no more than ten per cent higher than the prices charged by foreign contractors for
similar services. (2) This section applies to the Corporation where it undertakes petroleum activities under
section 11 (1).

y foreign contractors for
similar services. (2) This section applies to the Corporation where it undertakes petroleum activities under
section 11 (1).

Section 62—Technology transfer
(1) For the purposes of technology transfer, the Commission shall encourage and facilitate the
formation of joint ventures, partnership and the development of licensing agreements amongst
indigenous Ghanaian companies, foreign contractors and service or supply companies
interested in the petroleum industry where applicable. (2) This section shall not be interpreted to disable the licensee, contractor, sub-contractor or
the Corporation from protecting its competitive position in the petroleum industry. Section 63—Local content plan
(1) A licensee, contractor or sub-contractor shall prepare and implement a local content plan
as prescribed. (2) The local content plan shall be submitted to the Commission for approval. (3) The local content plan includes
(a) a plan for fulfilling the applicable Ghanaian content requirements with respect to the
provision of goods and services;
(b) a plan for the transfer to the Corporation of technological know-how and skills related to
petroleum activities; and
(c) a detailed annual recruitment and training programme.

to the Corporation of technological know-how and skills related to
petroleum activities; and
(c) a detailed annual recruitment and training programme.

(4) The licensee, contractor or sub-contractor shall submit an annual report on the local content
plan, describing the initiatives taken in the preceding year and their results. Section 64—Establishment of the Local Content Fund
There is established by this Act a Local Content Fund. 33

in the preceding year and their results. Section 64—Establishment of the Local Content Fund
There is established by this Act a Local Content Fund. 33

Section 65—Object of the Fund
(1) The object of the Fund is to provide financial resources for citizens and indigenous
Ghanaian companies engaged in petroleum activities. (2) For the purposes of achieving the object of the Fund, moneys from the Fund shall be applied
to
(a) education, training, research and development in petroleum activities for Ghanaian citizens,
indigenous Ghanaian companies and Ghanaian institutions of learning; and
(b) loans on a competitive basis to small and medium scale enterprises to support their
participation in petroleum activities. Section 66—Sources of money for the Fund
(1) The sources of money for the Fund include
(a) contributions from a contractor as agreed in a petroleum agreement;
(b) contributions from a sub-contractor of the sum of one per cent of the total consideration
payable by the contractor or licensee for every contract;
(c) moneys approved by Parliament; and
(d) grants. (2) The moneys of the Fund shall be paid into a bank account opened by the Board of the
Commission with the approval of the Controller and Accountant-General.

moneys of the Fund shall be paid into a bank account opened by the Board of the
Commission with the approval of the Controller and Accountant-General.

(3) Payments from the Fund shall be signed by
(a) the chairperson of the Board and the Chief Executive of the Commission; or
(b) the chairperson of the Board and one other member of the Local Content Committee. Section 67—Management of the Fund
(1) The Fund shall be administered by the Minister and the Local Content Committee set up
under section 8 of the Petroleum Commission Act, 2011 (Act 821). (2) The Minister and the Local Content Committee shall for the purpose of administering the
Fund
(a) formulate policies to generate money for the Fund;
(b) determine the allocations to be made towards the objectives of the Fund; and
(c) determine the annual targets of the Fund. (3) The Minister shall approve the annual budget of the Fund. (4) The Local Content Committee may invest a part of the moneys of the Fund that it considers
appropriate in the manner approved by the Minister in consultation with the Minister
responsible for Finance. (5) The Fund is exempt from the payment of tax. 34

e in the manner approved by the Minister in consultation with the Minister
responsible for Finance. (5) The Fund is exempt from the payment of tax. 34

Section 68—Accounts and audit
(1) The Local Content Committee shall keep books of account and proper records in relation
to them in the form approved by the Auditor-General. (2) The Commission shall submit the accounts of the Fund to the Auditor-General for audit
within three months after the end of the financial year. (3) The Auditor-General shall not later than three months after the receipt of the accounts, audit
the accounts and forward a copy of the audit report to the Minister. (4) The financial year of the Fund is the same as the financial year of the Government. Section 69—Annual report and other reports
(1) The Commission shall, within one month after the receipt of the audit report, submit an
annual report covering the operations of the Fund for the year to which the report relates to the
Minister. (2) The annual report shall include the report of the Auditor-General. (3) The Minister shall, within one month after the receipt of the annual report, submit the report
to Parliament with a statement that the Minister considers necessary.

hall, within one month after the receipt of the annual report, submit the report
to Parliament with a statement that the Minister considers necessary.

Section 70—Incorporation of local company
(1) Except for licensees and sub-contractors that may by applicable enactments be exempted
from the requirements of this subsection, a contractor, sub-contractor or licensee shall
(a) incorporate in this country under the provisions of the Companies Act, 1963 (Act 179), a
company to carry out solely petroleum activities in respect of licences, petroleum agreements
or petroleum sub-contracts and that company shall be
(i) the legal entity granted a licence, or
(ii) the signatory to the petroleum agreement or the petroleum sub-contract;
(b) maintain an office in this country from which the petroleum activitie shall be managed;
(c) have in charge of the office a representative with full authority to act and to enter into
binding commitments on behalf of the licensee, contractor or sub-contractor; and
(d) in respect of the petroleum activities, open and maintain an account with a bank in this
country. (2) The Minister may stipulate specific requirements in respect of the structure and the capital
of the company incorporated in this country.

country. (2) The Minister may stipulate specific requirements in respect of the structure and the capital
of the company incorporated in this country.

Section 71—Domestic supply requirement
(1) Subject to subsection (5), a contractor may export from the Republic, petroleum which the
contractor is entitled to export under the terms of a petroleum agreement. (2) A contractor shall sell to the Republic at the prevailing market price as prescribed, for the
same period a percentage of the petroleum to which the contractor is entitled, to meet domestic
supply requirements as determined by the Minister. 35

same period a percentage of the petroleum to which the contractor is entitled, to meet domestic
supply requirements as determined by the Minister. 35

(3) Domestic supply requirement is the difference between the total petroleum entitlements of
the Republic and the Corporation and the total volume of petroleum in barrels of oil or mmscfd
of gas equivalent of petroleum products required to meet the demand in the country. (4) The volume of petroleum to be supplied by the contractor shall be calculated on the basis
of the pro rata share of the petroleum to which the contractor is entitled, but each party's
obligation to supply petroleum for domestic supply requirement shall not exceed 'the total of
the entitlement of that party under the petroleum agreement,
(5) In the event of war or other emergency affecting energy supplies, the Minister may require
a contractor or the Corporation to supply all or part of the quantity of petroleum produced at
the prevailing market price to the Republic or any agency of the Republic.

Corporation to supply all or part of the quantity of petroleum produced at
the prevailing market price to the Republic or any agency of the Republic.

Section 72—Interference with lawful activities, compensation and access to land
(1) Where the conduct of petroleum activities is likely to affect any lawful economic or social
interest or activity of the inhabitants of an area, the Corporation or in the case of a licensee, the
Commission shall negotiate the appropriate permission required from the relevant authorities
and interested persons and the licensee, the contractor or the Corporation shall pay the agreed
compensation to the interested persons,
(2) Where there is hindrance to the acquisition of property, the property may be acquired for
the Corporation under the State Lands Act, 1962 (Act 125) and the Corporation shall bear the
cost.

ition of property, the property may be acquired for
the Corporation under the State Lands Act, 1962 (Act 125) and the Corporation shall bear the
cost.

Health and Safety, Security and Environment
Section 73—Safety requirements and standards
(1) Petroleum activities shall be conducted in a manner that ensures that a high level of safety
is achieved, maintained and further developed in accordance with technological developments,
best international practice and applicable enactments relating to health, safety and labour,
(2) A plan and related documents for implementation of safety measures of petroleum activities
shall be submitted to the Commission before the commencement of the relevant petroleum
activities,
(3) The plans and documents shall be updated as and when required.

ted to the Commission before the commencement of the relevant petroleum
activities,
(3) The plans and documents shall be updated as and when required.

Section 74—Safety precautions
A licensee, contractor, sub-contractor and the Corporation shall
(a) identify the hazards and evaluate the risks associated with any work performed in the course
of petroleum activities which constitute a hazard to the health and safety
(i) of persons employed for purposes of that work, an
(ii) of persons otherwise present at or in the vicinity of the facility, and the steps that need to
be taken comply with the provisions of this Act and Regulations;
(b) ensure the safety of the persons referred to in paragraph (a) and prevent their exposure to
the hazards or where prevention is not reasonably practicable, minimize their exposure; and
36

erred to in paragraph (a) and prevent their exposure to
the hazards or where prevention is not reasonably practicable, minimize their exposure; and
36

(c) ensure that the persons referred to in paragraph (a) are duly informed of the safety
precautions. Section 75—Emergency preparedness
A person conducting petroleum activities shall at all times
(a) maintain efficient emergency preparedness to prevent control, handle and minimize
accidents and emergencies which may lead to loss of life or personal injury, pollution or major
damage to property including fire, oil spills, gas leakages, blow-outs, accidents or other
emergency situation: and
(b) ensure that necessary measures are taken to prevent a reduce harmful effects, including the
measures required to return the environment to the condition it was before the accident
occurred. Section 76—Emergency preparedness against deliberate attacks
A licensee, contractor, sub-contractor or the Corporation shall implement and maintain
preventive security measures, including control of personnel and goods, to protect their
petroleum facilities and well from deliberate attacks and shall have contingency plans to deal
with those attacks. Section 77—Safety zones
(1) Every petroleum facility and well shall be surrounded by a safety zone, unless otherwise
determined by the Commission.

ks. Section 77—Safety zones
(1) Every petroleum facility and well shall be surrounded by a safety zone, unless otherwise
determined by the Commission.

(2) The Commission shall, in consultation with relevant authorities, determine the delimitation
of the safety zone. (3) Unauthorised vessels, vehicles, fishing gear or other objects or crafts shall not enter a safety
zone established under this section. (4) The Commission may permit lawful activities to take place in the zone or in parts of the
zone if the activities can be conducted without threatening safety or interfering with the
exercise of the petroleum activities. (5) The Commission may determine and establish the boundaries of the safety zone as
prescribed before the placement of petroleum facilities. (6) In the event of accidents and emergencies, the Commission may establish or extend a safety
zone under subsection (5). (7) The Commission may decide that a safety zone shall be established for abandoned wells,
abandoned or decommissioned facilities or parts of those facilities. (8) The Minister may, with the advice of the Commission and any other relevant agency,
determine that a safety zone should extend across the international boundary with another State
and may initiate the appropriate processes for implementation.

e that a safety zone should extend across the international boundary with another State
and may initiate the appropriate processes for implementation.

(9) The Minister and the Commission shall consult the other relevant authorities and agencies
for the purpose of establishing and managing a safety zone under this section. 37

Commission shall consult the other relevant authorities and agencies
for the purpose of establishing and managing a safety zone under this section. 37

Section 78—Suspension of petroleum activities
(1) Where an accident or emergency may lead to or has resulted in loss of life or personal
injury, pollution or major damage to property, the licensee, contractor, sub-contractor or the
Corporation shall,
(a) to the extent necessary, suspend the petroleum activities for as long as required by the
petroleum operating standards under section 50; and
(b) immediately but not later than forty eight hours, inform the Minister and the Commission
of the suspension. (2) In the event of emergencies or accidents under subsection (1), the Minister may, acting on
the advice of the Commission,
(a) direct that petroleum activities be suspended to the extent necessary if required in the public
or national interest; or
(b) impose particular conditions to allow continuation of the activities.

d to the extent necessary if required in the public
or national interest; or
(b) impose particular conditions to allow continuation of the activities.

Section 79—Measures to ensure safety
(1) Where a licensee, contractor, sub-contractor or the Corporation fails to conduct the
activities in a safe manner in accordance with applicable enactments and best international
practice, the Commission may take necessary measures to ensure safety and may recover the
costs and expenses of doing so from the licensee, contractor, sub-contractor or the Corporation. (2) The Commission may take measures under subsection (1) only after giving the contractor,
sub-contractor, licensee or the Corporation reasonable notice. Section 80—Qualifications
The licensee, contractor, sub-contractor and the Corporation shall ensure that a person engaged
in petroleum activities possesses the requisite qualifications and competence to perform the
functions in a prudent manner. The Environment and Liability for Pollution Damage
Section 81—Environmental principles and protection
(1) A person who undertakes petroleum activities shall take into account and give effect to the
environmental principles prescribed in the Environmental Protection Agency Act, 1994 (Act
490), subsidiary legislation made under that Act and any other applicable enactments.

prescribed in the Environmental Protection Agency Act, 1994 (Act
490), subsidiary legislation made under that Act and any other applicable enactments.

(2) A licensee, contractor, sub-contractor or the Corporation undertaking petroleum activities
shall
(a) take necessary measures to ensure that petroleum activities are conducted in a safe and
secure manner, free from accidents, waste dumping and pollution;
(b) establish and implement effective and safe systems for
(i) the disposal and treatment of waste, and
38

rom accidents, waste dumping and pollution;
(b) establish and implement effective and safe systems for
(i) the disposal and treatment of waste, and
38

(ii) the prevention of pollution resulting from petroleum activities, in accordance with
applicable enactments and best petroleum industry practice; and
(c) establish a system to track the source, transport and destination of potential hazardous waste
from petroleum activities. Section 82—Impact assessment
(1) A person shall not conduct petroleum activities in an area unless the required environmental
impact assessment has been conducted or any other relevant environmental statutory
requirement as prescribed in the Environmental Protection Agency Act, 1994 (Act 490) and
other applicable enactments have been complied with including
(a) reconnaissance activities under section 9;
(b) exploration drilling under section 24;
(c) development and operation under section 27;
(d) construction of transportation, treatment and storage facilities under section 38;
(e) decommissioning under section 43; and
(f) plugging and abandonment of a well under section 46. (2) A strategic impact assessment shall be undertaken before the opening of a new area under
section 7.

ng and abandonment of a well under section 46. (2) A strategic impact assessment shall be undertaken before the opening of a new area under
section 7.

Section 83—Liability for pollution damage
(1) A licensee, contractor or the Corporation carrying out petroleum activities under section
11(1) is strictly liable for any pollution damage caused by or resulting from the petroleum
activities. (2) Where several licensees or contractor parties are involved in the petroleum activities, the
parties are jointly and severally liable for any pollution damage caused by or resulting from the
petroleum activities. (3) Where pollution damage occurs as a result of petroleum activities conducted without proper
authorisation
(a) the person who conducted the petroleum activity; and
(b) any other person who took part in the petroleum activity and who knew or should have
known that the activity was conducted without proper authorisation
are strictly liable for the damage. (4) The licensee, contractor, sub-contractor or the Corporation shall institute the necessary
measures to remedy any pollution caused.

for the damage. (4) The licensee, contractor, sub-contractor or the Corporation shall institute the necessary
measures to remedy any pollution caused.

(5) Where the remedial measures are not taken within the time limit set by the Commission or
the Minister, a third party may be engaged for the performance of the measures, and the
licensee, contractor, sub-contractor or the Corporation shall be liable for any related costs. Section 84—Compensation for pollution damage
39

and the
licensee, contractor, sub-contractor or the Corporation shall be liable for any related costs. Section 84—Compensation for pollution damage
39

(1) Where there are several contractor parties under a petroleum agreement or several licensees
under one licence, a claim for compensation for pollution damage shall initially be made
against the operator. (2) Where there are several licensees or contractor parties and one of them fails to pay the share
of the compensation, the unpaid amount shall be paid by the other licensees or contractor parties
in proportion to their participating interest. (3) Where an event of force majeure results in pollution damage, the Minister shall, on the
advice of the Commission, assess the damage taking into account
(a) the scope of the activity,
(b) the measures taken to avoid or mitigate the effects of the force majeure event,
(c) the situation of the party that has sustained the damage as a result of the force majeure event,
and
(d) the insurance opportunities for each party. (4) On the basis of the assessment, the Minister shall require the person liable for the pollution
damage to pay compensation. Fiscal Provisions
Section 85—Payment of royalties
(1) The contractor shall pay to the Republic royalty in respect of gross volume of petroleum
produced and saved.

sions
Section 85—Payment of royalties
(1) The contractor shall pay to the Republic royalty in respect of gross volume of petroleum
produced and saved.

(2) The royalty to be paid is as prescribed, except that where the rates of royalty payable are
not prescribed, royalty shall be paid as otherwise provided in accordance with the terms of a
petroleum agreement in respect of the area to which the agreement relates. (3) Royalty at the rate specified shall be delivered to the Republic in kind unless the Minister
directs in writing that the royalty shall be paid in cash to the Republic. (4) The Minister may instruct the contractor to undertake transportation, processing and storage
of royalty petroleum in kind on terms and priority which are no less favourable than the
contractor's own petroleum from the relevant contract area. (5) The Corporation in carrying out petroleum activities under section (11) (1) is subject to the
payment of royalty at the rates that may be prescribed. (6) The Minister may determine that payment of royalty in kind shall be made to the
Corporation on behalf of the Republic and the proceeds from the sale of the royalty shall be
paid by the Corporation to the Republic as prescribed. Section 86—Annual fee in respect of acreage
(1) A contractor shall pay the Republic annual acreage fees.

he Corporation to the Republic as prescribed. Section 86—Annual fee in respect of acreage
(1) A contractor shall pay the Republic annual acreage fees.

(2) The Minister shall prescribe the amount to be paid, except that where the amount is not
prescribed, the annual acreage fees shall be as provided in accordance with the terms of a
petroleum agreement in respect of the area to which the agreement relates. 40

nual acreage fees shall be as provided in accordance with the terms of a
petroleum agreement in respect of the area to which the agreement relates. 40

(3) This section applies to the Corporation where it undertakes petroleum activities under
section 11 (1). Section 87—Tax
A licensee, contractor, sub-contractor and the Corporation shall
pay taxes, including petroleum income tax and capital gains tax in accordance with applicable
enactments. Section 88—Bonus payments
A contractor shall pay bonus to the Republic as may be prescribed, except that where the type
and quantum of the bonus payable is not prescribed, the bonus shall be paid as otherwise
provided in accordance with the terms of a petroleum agreement in respect of the area to which
the agreement relates. Section 89—Additional oil entitlement
The Republic is entitled to a portion of a contractor's share of petroleum produced from each
field on the basis of the after-tax inflation-adjusted rate of return that the contractor achieved
with respect to each field.

leum produced from each
field on the basis of the after-tax inflation-adjusted rate of return that the contractor achieved
with respect to each field.

Miscellaneous Provisions
Section 90—Natural resources other than petroleum resources
(1) A petroleum agreement shall not affect the right of a person other than the contractor to
undertake exploration for and production of natural resources other than petroleum, provided
the grant does not unreasonably interfere with the petroleum activities. (2) The right to undertake exploration for and production of natural resources other than
petroleum includes the right to conduct scientific research. (3) Where natural resources other than petroleum have been discovered in a contract area and
the continued activities in respect of other natural resources cannot take place without
unreasonably interfering with the conduct of petroleum activities, the Minister shall in
consultation with the relevant authorities and the affected persons determine the extent to which
any of the activities shall be postponed. (4) In making the determination in respect of a postponement, the Minister shall take into
account
(a) the nature of the discovery made,
(b) investments made,
(c) the stage of the activities, and
(d) the duration and extent of the activities and their economic and social impact.

y made,
(b) investments made,
(c) the stage of the activities, and
(d) the duration and extent of the activities and their economic and social impact.

(5) A contractor whose petroleum activities have been postponed may apply for extension of
the petroleum agreement for a period of time corresponding to the period of postponement. 41

activities have been postponed may apply for extension of
the petroleum agreement for a period of time corresponding to the period of postponement. 41

(6) Where the postponement only applies to a limited part of the petroleum activities the
Minister may
(a) stipulate a shorter period for the extension;
(b) refuse the extension; or
(c) grant the extension only for part of the contract area. (7) Where the postponement delays the fulfilment of a work obligation within the stipulated
time limit, under a petroleum agreement, the time limit for fulfilment of the work obligation
shall be extended accordingly. (8) Where petroleum activities under a petroleum agreement are postponed, the annual acreage
fee for the extended period shall be waived or reduced at the discretion of the Minister but fees
paid in advance shall not be refunded. (9) The Minister may direct that the person authorised to maintain activities shall wholly or in
part refund the costs incurred and other reasonable costs to the person that has to postpone or
curtail activities. (10) Where the exploration for and production of natural resources other than petroleum,
affects the activities of a licensee the provisions of this section shall apply to the extent relevant.

ion of natural resources other than petroleum,
affects the activities of a licensee the provisions of this section shall apply to the extent relevant.

Section 91—Transactions between contractor and affiliates
Subject to this Act, a transaction between a contractor or sub-contractor and an affiliate in
relation to petroleum activities to be carried out under this Act shall be on the basis of prevailing
international competitive prices and other terms and conditions that would be fair and
reasonable if the transaction had taken place between the contractor or sub-contractor and a
non-affiliate. Section 92—Insurance
(1) Petroleum activities conducted under a petroleum agreement or under a transportation,
treatment or storage licence shall be covered by insurance at all times and in accordance with
the Insurance Act, 2006 (Act 724) and other applicable enactments. (2) The insurance shall include cover for
(a) damage to petroleum facilities,
(b) pollution damage and other liability towards third parties,
(c) wreckage removal and cleanup resulting from accidents, and
(d) employees of the contractor or of the licensee engaged in the activities.

parties,
(c) wreckage removal and cleanup resulting from accidents, and
(d) employees of the contractor or of the licensee engaged in the activities.

(3) A contractor, licensee or the Corporation shall ensure that a sub-contractor insures the
employees of the sub-contractor to the same extent as the contractor or licensee insures their
own employees. (4) A contractor, sub-contractor and the Corporation or a licensee shall procure reasonable
insurance cover under subsection (2) (a) to (c). 42

oyees. (4) A contractor, sub-contractor and the Corporation or a licensee shall procure reasonable
insurance cover under subsection (2) (a) to (c). 42

(5) The Commission in consultation with the National Insurance Commission may give
approval to the contractor or the licensee to arrange another form of security other than
insurance cover. (6) A contractor or licensee shall at the beginning of each year submit to the Commission copies
of existing insurance policies. (7) The Commission may require additional insurance to be procured. Section 93—Offences and penalties
(1) A person who
(a) interferes with or obstructs the
(i) Corporation,
(ii) a contractor, or
(iii) sub-contractor, or their agents or employees in the exercise of a right under this
(b) wilfully obstructs, hinders or assaults any other person in the exercise of a right, power or
in the performance of a function under this Act, commits an offence and is liable on summary
conviction to a fine of not less than one thousand penalty units and not more than ten thousand
penalty units and, where the offence continues, to a fine of not more than one thousand penalty
units for each day during which the offence continues or to a term of imprisonment of not less
than one year and not more than three years or to both.

units for each day during which the offence continues or to a term of imprisonment of not less
than one year and not more than three years or to both.

(2) Except as otherwise provided under this section, a person who undertakes petroleum
activities in contravention of this Act, commits an offence and is liable on summary conviction
to a fine of not less than ten thousand penalty units and not more than fifty thousand penalty
units and, where the offence continues, to a fine of not more than one thousand penalty units
for each day during which the offence continues or to a term of imprisonment of not less than
one year and not more than three years or to both. (3) Where an offence under subsection (1) or (2) is committed by a body corporate or a
partnership or other firm a director or officer of that body corporate or partnership or any person
concerned with the management of the firm shall be deemed to have committed the offence. (4) A person shall not be convicted of an offence under subsection (3), if it is proved that
(a) due diligence was exercised to prevent the commission of the offence; and
(b) the offence was committed without the knowledge, consent or connivance of that person.

was exercised to prevent the commission of the offence; and
(b) the offence was committed without the knowledge, consent or connivance of that person.

(5) A person
(a) other than the Corporation who engages in the exploration, development or production of
petroleum without a petroleum agreement commits an offence and is liable on summary
conviction to a fine of not less than four hundred thousand penalty units and not more than five
hundred thousand penalty units;
(b) who assigns a petroleum agreement directly or indirectly either in whole or in part, without
the approval of the Minister commits an offence and is liable on summary conviction to a fine
43

tly or indirectly either in whole or in part, without
the approval of the Minister commits an offence and is liable on summary conviction to a fine
43

of not less than one hundred thousand penalty units and not more than two hundred thousand
penalty units;
(c) who commences to implement a plan of development and operation without the approval
of the Minister
(i) is, in the first instance liable to pay to the Commission an administrative penalty of the
Ghana Cedi equivalent of one million United States Dollars for each day of the first ninety days
that the operation is carried on without approval; and
(ii) after the ninety day period referred to in subparagraph (i), is liable to pay an additional
administrative penalty of not more than eight hundred thousand penalty units and the petroleum
agreement may be terminated; and
where that person fails to pay the penalty under paragraphs (i) and (ii), that person commits an
offence and is liable on summary conviction to a term of imprisonment of not less than two
years and not more than five years;
(d) who fails to submit a decommissioning plan as specified in section 43
(i) is, liable to pay to the Commission an administrative penalty of the Ghana Cedi equivalent
of one hundred and twenty thousand United State Dollars for each day of the first thirty days
that the decommissioning plan is not submitted after the expiration of the period for the
submission of the decommissioning plan or the implementation of the decommissioning plan;
and
(ii) is, after the thirty days, liable on summary conviction to an additional fine of not less than
two hundred thousand penalty units and not more than five hundred thousand penalty units or
to a term of imprisonment of not less than one year and not more than three years or to both;
(e) who contravenes subsection (2) of section 23
(i) shall pay to the Commission an administrative penalty of the Ghana Cedi equivalent of one
hundred thousand United States Dollars for each of the first thirty days that the amount
becomes due to the Corporation in addition to the amount owed under subsection (2) of section
23; or
(ii) is, after the thirty day period, liable on summary conviction to a fine of not less than one
thousand penalty units and not more than two hundred thousand penalty units in addition to the
amount owed under subsection (2) of section 23;
(f) who fails to pay the annual fees in respect of the acreage to which the petroleum agreement
relates for the relevant period shall
(i) pay to the Commission an administrative penalty of five percent of the annual fee for each
day of the first thirty days after the annual fee becomes due in addition to the outstanding
annual fee; and
(ii) after the thirty day period referred to in subparagraph (i), pay to the Commission an
administrative penalty of one hundred thousand penalty units in addition to the outstanding
annual fee;
44

subparagraph (i), pay to the Commission an
administrative penalty of one hundred thousand penalty units in addition to the outstanding
annual fee;
44

(g) who fails to comply with a request to provide information under this Act within the period
specified in the request, shall pay to the Commission an administrative penalty of ten thousand
penalty units in the first instance and a further penalty of ten per cent of the penalty for each
day that the information is not provided. Section 94—Authority to issue Regulations, guidelines and stipulate conditions
(1) The Minister may, by legislative instrument, make Regulations to prescribe for the matters
that are necessary for carrying out or giving effect to this Act.

nister may, by legislative instrument, make Regulations to prescribe for the matters
that are necessary for carrying out or giving effect to this Act.

(2) Without limiting subsection (1), the Minister may make Regulations to provide for
(a) matters to ensure the safe construction, maintenance and operation of installations, facilities
and equipment used in connection with petroleum activities;
(b) the health, safety and welfare of persons employed in or affected by petroleum activities;
(c) environmental protection, including the prevention of pollution and pollution damage and
the taking of remedial action to prevent pollution damage as a result of petroleum activities;
(d) the inspection of areas in which petroleum activities are being carried out and of the plant,
machinery and equipment within those areas;
(e) reporting of and inquiries into accidents arising out of petroleum activities for record
purposes;
(j) keeping and inspection of records, accounts, statistics and plans with respect to petroleum
activities;
(g) submission of information;
(h) the protection of fishing, navigation, and any other activities carried out within or in the
vicinity of areas in which petroleum activities are being carried out;
(i) the standards for petroleum and petroleum products and their transportation;
(j) fiscal requirements, including terms and conditions for taxes, royalties, bonuses, fees, oil
entitlement and, where applicable, ring-fencing;
(k) area management, including the establishment of a reference map, the opening of new areas,
and the closure and redefinition of areas;
(l) procedures and conditions for the granting of petroleum agreements, including qualification
requirements, terms and conditions for open and competitive tendering procedures and direct
negotiations;
(m) the determination of the value of crude oil and natural gas;
(n) the determination of the domestic supply requirement;
(o) the conservation of natural resources and the avoidance of waste, whether petroleum or
otherwise, of the land to which this Act applies;
(p) accounting procedures and reporting;
(q) the minimum conditions of service for workers engaged in-petroleum activities;
45

which this Act applies;
(p) accounting procedures and reporting;
(q) the minimum conditions of service for workers engaged in-petroleum activities;
45

(r) the terms and conditions of petroleum agreements;
(5) the rates or methods of setting the rates at which petroleum and water may be recovered
from a well or a petroleum reservoir;
(t) the methods to be used for the measurement of petroleum, water and other substances from
a well;
(u) the pressure maintenance in, or re-pressuring of, a petroleum reservoir and the recycling of
petroleum;
(v) the terms and conditions under which the Corporation shall undertake the exploration,
development and production of petroleum in association with a contractor under section 11 (2);
(w) the specified areas in which the exercise of rights of a contractor under this Act to carry
out petroleum activities shall be restricted;
(x) the penalties for offences against the Regulations;
(y) local content and local participation;
(z) matters of health, safety, environment and welfare of communities;
(aa) contents of plan of development and operation, requirements and conditions for the plan
and any other matter concerning the application and approval of the plan;
(bb) decommissioning and decommissioning fund;
(cc) the procedure to determine the payment of compensation to owners or occupiers of land
where petroleum activities are carried out;
(dd) the contents of an application for reconnaissance licence, licensee qualification
requirements, the scope of the licence, the further conditions of the licence and the fee to be
paid;
(ee) exploration activities, including exploration period and extension, relinquishment, work
obligations and exploration drilling;
(ff) identification, designation and name of installations, facilities, wells and fields;
(gg) measures and requirements for emergency preparedness;
(hh) requirements relating to boundaries;
(ii ) conditions and terms for safety zones;
(jj) conditions for reporting and licensing of data;
(kk) conditions for the arrangement, contents of and keeping of the, petroleum registry;
(ll) the contribution of contractors to the provision of security of the State;
(mm) the requirements relating to management systems;
(nn) conditions for third party access and stipulation of tariffs;
(oo) compensation for affected lawful activities including fisheries; and
46

stems;
(nn) conditions for third party access and stipulation of tariffs;
(oo) compensation for affected lawful activities including fisheries; and
46

(pp) classifying companies as small or medium to achieve the object of this Act. (3) The Minister may issue guidelines for the implementation of the provisions of this Act and
the guidelines shall be published in the Gazette. (4) In connection with individual administrative directives, other conditions, than those
mentioned in this Act, may be stipulated when they are naturally linked with the measures or
the activities to which the individual administrative directive relates.

is Act, may be stipulated when they are naturally linked with the measures or
the activities to which the individual administrative directive relates.

Section 95—Interpretation
In this Act, unless the context otherwise requires,
"additional oil entitlement" has the meaning given to it in section 89;
"affiliate" means a shareholder of a contractor or sub-contractor who owns fifty per cent or
more of the shares in the business of the contractor or sub-contractor or an entity which
controls, is controlled by or is under common control with the contractor or sub-contractor;
"appraisal" means operations or activities carried out following a discovery of petroleum for
the purpose of delineating the accumulations of petroleum to which that discovery relates in
terms of thickness and lateral extent and estimating the quantity of recoverable petroleum and
all operations or activities to resolve all uncertainties required for determination of
commerciality of a discovery;
"associated gas" means natural gas produced from a well in association with crude oil;
"authorisation" means the approval granted by the Minister to the Corporation to undertake
petroleum activities not in association with a contractor;
"block" means an area that is approximately six hundred and eighty-five square kilometres as
depicted on the reference map prepared by the Minister in accordance with the provisions of
this Act;
"capital or financing lease" means a lease that meets one or more of the following criteria
(a) the lease term is greater than seventy-five per cent of the economic life of the asset,
(b) the lease contains an option to purchase the asset for less than the fair market value,
(c) the ownership of the subject of the lease is transferred to the lessee at the end of the lease
term,
(d) the present value of the lease payments exceeds ninety percent of the fair market value;
"commercial discovery" means the requirement on the part of the contractor to demonstrate to
the government that a discovery would be sufficiently profitable for both the contractor and the
Republic to merit development;
"Commission" means the Petroleum Commission established by the Petroleum Commission
Act, 2011, (Act 821);
"communities" includes people living within the area where petroleum activities are being
conducted and who are likely to be affected by the petroleum activities;
47

ncludes people living within the area where petroleum activities are being
conducted and who are likely to be affected by the petroleum activities;
47

"contract area" means the area covered by the petroleum agreement in which a contractor is
authorised to explore for, develop and produce petroleum but excludes portions of the area in
respect of which a contractor's rights are from time to time relinquished or surrendered;
"contractor" means a body corporate which has entered into a petroleum agreement with the
Republic and the Corporation under this Act;
"Corporation means" the Ghana National Petroleum Corporation;
"crude oil" means a mixture of hydrocarbons which are liquid under normal atmospheric
conditions and includes condensates and distillates obtained from natural gas;
"decommissioning fund" means a fund established under section 45 of this Act for the purposes
of funding decommissioning activities upon termination of petroleum activities in an area
under a relevant petroleum agreement;
"development" means the following activities carried out in connection with a development
plan in the nature of the building and installation of facilities for production, drilling of
development wells, construction and installation of equipment, pipelines, facilities, plants and
systems, in and outside the contract area, which are required for achieving production,
treatment, transport, storage and lifting of petroleum and preliminary production activities
carried out prior to the date of commencement of commercial production and all related
planning and administrative work and the construction and installation of approved secondary
and tertiary recovery systems ;
"development period" means in respect of each development and production area, the period
from the dates of commercial discovery until the date of commencement of commercial
production;
"discovery" means finding within a well at the end of drilling during exploration operations,
one or more accumulations of petroleum the existence of which, until that finding, was
unproved by drilling, and which can be or is recovered at the surface in a flow measurable by
conventional international petroleum industry testing methods;
"exploration" includes the search for petroleum by geological, geophysical and other methods
and the drilling of exploration wells and any activity in connection with or in preparation of
and any relevant processing and appraisal work in the nature of technical and economic
feasibility studies, that may be carried out to determine whether a discovery of petroleum
constitutes a commercial discovery;
"exploration costs" means the costs incurred in the search for petroleum by geological,
geophysical and other methods, drilling of exploration wells and associated activities and
appraisal;
"exploration period" means the period commencing on the effective date and continuing during
the time within which the contractor is authorized to carry out exploration operations;
"force majeure" means any event beyond reasonable control of the party claiming to be affected
by the event which has not been brought about at the instance of the party including,
earthquake, storm, flood, lightning or other adverse weather conditions, war, acts of terrorism,
embargo, blockade, riot or civil disorder;
48

luding,
earthquake, storm, flood, lightning or other adverse weather conditions, war, acts of terrorism,
embargo, blockade, riot or civil disorder;
48

"Fund" means the Local Content Fund established under section 64;
"gross production" means the total amount of petroleum produced and saved from a
development and production area during production or testing operations which is not used by
the contractor in petroleum activities and is available for distribution to the parties according
to the petroleum agreement and the relevant enactments;
"indigenous Ghanaian company" means a company incorporated under the Companies Act,
1963 (Act 179) which
(i) has at least fifty-one per cent of its equity owned by a citizen of Ghana; and
(ii) has Ghanaian citizens holding at least eighty percent of executive and senior
management positions and one hundred per cent of the non-managerial positions and other
positions;
"land" includes land beneath water, seabed and the subsoil;
"licensee" means any person, firm, body corporate or other entity which has been granted a
reconnaissance licence or a licence for transportation, treatment or storage of petroleum under
this Act;
"Minister" means the Minister responsible for Petroleum;
"mmscfd" means million standard cubic feet a day;
"natural gas" includes hydrocarbons which are gaseous under normal atmospheric conditions,
and wet and dry gas;
"non-associated gas" means natural gas produced from a well other than in association with
crude oil;
"operator" means the company or the Corporation carrying out the petroleum activities on
behalf of the contractors or the Corporation under a petroleum agreement or of the licensees
under a licence, or the Corporation where it undertakes petroleum activities under section
11(1);
"petroleum" means crude oil or natural gas or a combination of both;
"petroleum activity" means any activity, engaged in within and outside the country related to
the exploration for, development and production of petroleum in the nature of the acquisition
of data, drilling, plugging and abandonment of wells, treatment, storage, pipeline transportation
decommissioning and the planning, design, construction, installation, operation and use of any
facility for the purpose of these activities;
"petroleum agreement" means an agreement entered into between the Republic, the
Corporation and a contractor under this Act for the exploration, development and production
of petroleum;
"petroleum facility" means an installation, a plant, or other equipment for petroleum activities,
but does not include supply or support vessels or ships that transport petroleum in bulk but
comprises among others a pipeline and a cable unless otherwise provided;
49

de supply or support vessels or ships that transport petroleum in bulk but
comprises among others a pipeline and a cable unless otherwise provided;
49

"petroleum product" means a product derived from petroleum by a refining or treatment
process;
"petroleum resources" include
(a) existing petroleum;
(b) discovered petroleum reserves;
(c) undiscovered petroleum reserves;
(d) petroleum produced; and
(e) petroleum under production;
"petroleum sub-contract" means a contract between the Corporation and a third party or
between a contractor and a third party for the provision of goods and services for petroleum
activities but does not include a petroleum agreement;
"pollution damage" means damage or loss caused by alteration of the physical, thermal,
chemical, biological or radioactive properties of any part of the environment by discharging
emitting or depositing substances or wastes so as to affect any beneficial use adversely, cause
a condition which hazardous or potentially hazardous to public health, safe or welfare, or to
animals, birds, wildlife, fish or aquatic life or to plants or to cause a contravention of any
condition limitation or restriction which is subject to a licence under this Act;
"production" means the recovery and disposal of petroleum including any works and services
connected with the discovery or disposal;
"production costs" means costs incurred in the production petroleum;
"relevant agencies" means a government entity of the Republic under whose area of
competence petroleum activities a conducted;
"royalty" means the entitlement of the Republic to a portion of petroleum produced and saved
and not utilized in petroleum activities from each field and which is calculated as percentage
of gross daily production rates without regard to any prior deductions;
"small and medium enterprises" means an industry, project undertaking or economic activity
that employs not more than one hundred persons with an asset base that is not more than the
Ghana Cedi equivalent of two million United States Dollars excluding land or buildings;
"Standards Authority" means the Authority established under the Standards Authority Act,
1973 (NRCD 173);
"sub-contractor" means a third party with whom the corporation or a contractor has entered
into a petroleum contra for the provision of goods and services for petroleum activities; and
"third party" includes an entity other than the owner of the shares of the incorporated company
at the time of the execution of a relevant petroleum agreement, affiliate sister and parent
companies.

owner of the shares of the incorporated company
at the time of the execution of a relevant petroleum agreement, affiliate sister and parent
companies.

Section 96—Transitional provisions
(1) Petroleum agreements entered into before the commencement of this Act remain valid. 50

(2) A licensee, contractor, sub-contractor, the Corporation and any other person engaged in a
petroleum activity shall comply with the relevant provisions of this Act.
Section 97—Repeal and savings
(1) The Petroleum (Exploration and Production) Act, 1984 (PNDCL 84) is hereby repealed.
(2) Despite the repeal of PNDCL 84, the Regulations, rules by-laws, notices, orders, directions,
appointments or any act lawfully made or done under the repealed enactment and in force
immediately before the commencement of this Act shall continue to have effect until revoked,
cancelled or terminated.
Date of Gazette Notification: 19th August, 2016.
51