Oil giants Chevron and Shell have signed a preliminary, non-binding agreement with Ghana over potential production rights in the South Deepwater Tano Cape Three Points (SDT-CTP) oil and gas block.
The memorandum of understanding was signed with the Ghana National Petroleum Corporation (GNPC) as the government works to attract fresh investment and reverse declining oil production.
The agreement does not represent a final deal. Shell said it establishes a framework for negotiations on the terms of a potential licence, while the transaction will also require the necessary regulatory and government approvals.
The development comes as Ghana reviews its legal and fiscal framework for upstream petroleum activities. Energy Minister John Jinapor said proposed reforms include reducing GNPC’s initial carried interest in upstream projects from 15% to 10%.
Other proposed changes include simplifying the tax system and introducing different royalty rates based on the depth of offshore operations.
Ghana has been seeking to increase investment in its oil and gas industry after crude production declined significantly from its 2019 peak. According to figures cited in the report, production fell from 71.44 million barrels in 2019 to 48.25 million barrels in 2024.
The government is also counting on new investments in existing fields. Projects involving Kosmos Energy and partners including Tullow Oil could support the drilling of as many as 20 additional wells and help increase future production.
For Ghana, the Shell-Chevron agreement could bring additional international expertise and investment into the country’s offshore petroleum sector if negotiations ultimately lead to a final agreement.