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Ghana has signed a non-binding memorandum of understanding (MoU) with Shell and Chevron covering the South Deepwater Tano Cape Three Points block, while the government moves to reduce the free carried interest held by the state oil company in new upstream petroleum projects from 15% to 10%.

The MoU was signed in Accra on 1 September during Africa Oil Week by the Government of Ghana, the Ghana National Petroleum Corporation (GNPC), its exploration subsidiary GNPC Explorco, Shell Overseas Holdings and Chevron Sub-Saharan Africa Ventures.

No detailed work programme, expenditure commitment or drilling schedule has been made public. Shell described the agreement as a framework for negotiating final licence terms, subject to the necessary approvals.

Under Ghana’s model petroleum agreement, GNPC receives a carried interest in projects, with contractors funding the state’s share of exploration and development costs during the pre-production phase. GNPC begins contributing only after commercial production starts.

The proposed reduction in the carried interest from 15% to 10% would increase contractors’ share of future output from 85% to 90%, while reducing GNPC’s initial carried share by one-third.

Carried and participating interests have been a major source of petroleum revenue for Ghana. According to the Public Interest and Accountability Committee (PIAC), Ghana recorded petroleum receipts of $770.3 million in 2025, of which $339.3 million, or 44%, came from carried and participating interests. Corporate income tax generated $346.9 million during the same period.

PIAC said the higher corporate tax contribution reflected a delayed payment linked to a Sankofa lifting rather than a structural shift in revenue sources. In 2023, carried and participating interests accounted for 44% of petroleum receipts, compared with 34% from corporate income tax.

The proposed changes come as Ghana’s oil production continues to decline. National output fell from a peak of 71.44 million barrels in 2019 to 37.3 million barrels in 2025, representing an average annual decline of about 9%. Petroleum receipts dropped 43.3% last year from $1.36 billion.

Ghana has not signed a new petroleum agreement since 2018. Speaking in Accra, Energy Minister John Jinapor defended the proposed changes, saying: “I’m better off having 10% of 1 billion than 15% of 1,000.”

The South Deepwater Tano block was previously operated by AGM Petroleum, part of Norway’s Aker group, which relinquished the acreage in March 2023 after drilling two ultra-deepwater wells, including the Nyankom discovery. The company said substantial additional investment would be required because of the water depth.

No public estimate of recoverable resources has been released for the block. Industry references to 453 million barrels relate to the neighbouring Deepwater Tano/Cape Three Points licence area, whose development has remained stalled for several years.

The proposed reforms extend beyond the carried interest provision. The government is considering increasing the duration of petroleum agreements from 25 years to 30 years, extending tax loss carry-forward provisions from five years to 10 years, deferring signature bonus payments until a discovery is declared commercial, and introducing royalty rates linked to water depth.

Finance Ministry adviser Theophilus Acheampong has estimated that the combined measures would reduce the state’s share of project value from 65–67% to around 55%.

The proposed changes require legislative approval. Ghana’s Petroleum (Exploration and Production) Act, 2016 (Act 919), provides for a carried interest of at least 15% and limits petroleum agreements to a maximum term of 25 years. Jinapor said the reform package has been submitted to the cabinet, with passage targeted before the end of 2026.

Separately, GNPC Explorco remains in a dispute with PIAC over $561.6 million in proceeds from the subsidiary’s liftings between 2022 and 2024. PIAC argues the funds should have been transferred through the Petroleum Holding Fund, while GNPC maintains they constitute the subsidiary’s commercial income.

Act 919 also includes an additional oil entitlement mechanism designed to increase the state’s share of revenue when project returns exceed specified thresholds. The final petroleum agreement with Shell and Chevron, including its minimum work obligations and drilling commitments, will require parliamentary ratification.