Ugrc 140 (erath resoureces)

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Ugrc 140 (erath resoureces)

  1. 1. UGRC 140 : SCIENCE AND TECHNOLOGY IN OUR LIVESSECOND SEMESTER : 2011/2012 ACADEMIC YEAR EARTH RESOURCES 1
  2. 2. WHAT ARE FOSSILFUELS? Theseare energy sources formed from the remains of once living organisms OR they are fuels formed by natural resources such as anaerobic decomposition of dead organisms. 2
  3. 3. WHAT ARE FOSSILFUELS?They are non- renewable resourcesThey include the following:  Oil  Natural Gas  Coals  Fuels derived from oil shale and tar sand 3
  4. 4. Formation of Fossil Fuels –common conditionsHigh Organic ProductionBurial of organic materialReducing conditions – little or no free oxygenReducing conditions preserve organic matterCoal and Petroleum diverge from here 4
  5. 5. Formation of Petroleum andNatural Gas  Accumulation of organic material – typically marine mud  Burial and preservation of organic material – reducing conditions  Reducing conditions in deep sea or on continental shelves during times of unusual oceanic circulation 5
  6. 6. Formation of Petroleum andNatural GasBlack, organic-rich mud is buried deeper and converted to rock – shaleWith burial, the organic matter is heated 6
  7. 7. Formation of Petroleum and Natural GasWhen heat is sufficient (but not too great about100degrees C ) The organic matter is “cooked” and oil is formedProcess is called thermal maturation 7
  8. 8. Formation of Petroleum andNatural GasIf heat is greater than 300 degrees C, the liquid petroleum is further broken down to form natural gas 8
  9. 9. Formation of Petroleum and Natural GasIf heat is too great, even the natural gas is broken down to form carbon dioxide, which has no value as a fuel 9
  10. 10. Migration and ConcentrationPetroleum must leave source rockProcess is called migrationMigration is essential because most source rocks are too fine- grained to enable easy extraction of the oil 10
  11. 11. Migration and ConcentrationTo be economically concentrated, petroleum must migrate to a reservoir rock with a trap 11
  12. 12. Petroleum Resources-ConditionsConditions for source rock are rareConditions for maturation must be just rightMigration must not let petroleum escape to surfaceReservoir rock must be presentTrap must exist before migration occurs 12
  13. 13. Distribution of PetroleumEconomic accumulations of petroleum only occur when all of these conditions are metThese conditions and the sequence of occurrence do not occur everywhereConditions are most likely where there are thick accumulations of sedimentary rock – in sedimentary basins 13
  14. 14. Some of the world’s mostproductive sedimentary basins Saudi Arabia Kuwait Alaska – north slope Texas – Louisiana Gulf Coast Iraq and Iran Mexico Venezuela 14
  15. 15. What about Ghana? Ghana has four (4) sedimentary basins;  Three (3) offshore and  One (1) onshore
  16. 16. The offshore(below the sea bed)basins are; The Tano Basin Saltpond Basin Accra- Keta Basin
  17. 17. The onshore(land based) basin is the Voltaian Basin
  18. 18. The Origin of Oil and Gas:- Plankton cache.eb.com/eb/image?id=93510 Plant plankton Animal planktonwould fit on a pinhead! 10,000 of these bugs en.wikipedia.org/wiki/Image:Ceratium_hirundinella.jpg en.wikipedia.org/wiki/Image:Copepod. Most oil and gas start life as microscopic plants and animals that live in the ocean 18
  19. 19. The Origin of Oil and Gas:- Algal Blooms serc.carleton.edu/images/microbelife/topics/red_tide_genera.v3.jpg Today, most plankton can be found where deep ocean currents rise to the surface This upwelling water is rich in nutrients and causes the plankton to bloom Blooms of certain plankton called dinoflagellates may give © Miriam Godfrey the water a red tinge Dinoflagellate bloom 19
  20. 20. The Origin of Oil and GasOn the sea bed upload.wikimedia.org/wikipedia/en/0/04/Plankton.jpg When the plankton dies it rains down on sea bed to form an organic mush en.wikipedia.org/wiki/Image:Nerr0328.jpg If there are any animals on the Sea bed sea bed these will feed on the organic particles 20
  21. 21. The Origin of Oil and GasBlack Shale upload.wikimedia.org/wikipedia/en/0/04/Plankton.jpg However, if there is little or no oxygen in the water then animals can‟t survive and the organic mush accumulates Where sediment contains more than 5% organic matter, it eventually forms a rock known as a Black Shale © Earth Science World Image Bank 21
  22. 22. Oil is found in the sedimentary rockswhat are they? Sedimentary rocks are formed by the deposition and cementation of fragments derived from the breaking apart of ancient rocks. Frost, rain, wind and the heat of the sun detach rock fragments, or debris, from the mountain flanks . These fragments are carried toward the valleys by streams and rivers. On their way, the rock fragments knock together, and break. They are carried along and laid down as sands and pebbles. In time, the weight of new debris squeezes and hardens the older debris which become sedimentary rocks. 22
  23. 23. How has the Oil Been Generated? Oil is generated from the organic matter derived from the decomposition of plants and animals deposited in the sedimentary rocks. During millions of years the organic matter is transformed into oil by the action of bacteria, temperature and pressure. 23
  24. 24. Origin of Oil and GasCooking the Source Rock As Black Shale is buried, it is heated. Organic matter is first changed by the increase in temperature into kerogen, Kerogen which is a solid form of hydrocarbon Around 90°C, it is changed into a liquid state, which we call oil Oil Around 150°C, it is changed into a gas Gas A rock that has produced oil and gas in www.oilandgasgeology.com/oil_gas_window.jpg this way is known as a Source Rock 24
  25. 25. “Black” shale formation, a potential source rock found at Takoradi Source Rock – Takoradi Shale, Takoradi 25
  26. 26. Hydrocarbon Expulsion and Migration www.diveco.co.nz/img/gallery/2006/diver_bubbles.jpg Hot oil and gas is less dense than the source rock in which it occurs Oil and gas migrate upwards through the rock in much the same way that the air bubbles of an underwater diver rise to the surface Rising oil The rising oil and gas eventually gets trapped in pockets in the rock called reservoirs 26
  27. 27. Hydrocarbon Expulsion and Migration - Oil Seeps Pitch Lake, Trinidad Kalimantan Indonesia Iran, 1924 27
  28. 28. The Petroleum System Entrapment Migration Seal Expulsion Reservoir Generation P Carrier T Source Rock 28
  29. 29. The Petroleum SystemReservoir Rocks The permeable strata in an oil trap is known as the Reservoir Rock Reservoir rocks have lots of interconnected holes called pores. These absorb the oil and gas like a sponge This is a highly magnified picture of As oil migrates it fills up the pores a sandy reservoir rock (water-filled (oil-filled pores shown in black) pores are shown in blue) Earth Science World Image Bank Image #h5innl 29
  30. 30. The Physical Characteristics of Oil Bearing Rocks The POROSITY is the volume of the empty The PERMEABILITY is the spaces inside a rock ( it is the ratio between the empty spaces and phisical property that allows the the total volume of the rock. passage of some fluids through a The porosity higher values can be about 30 - rock 32% but it is possible to produce oil from (it is measured in millidarcy. Only rocks with a porosity of 3- 4% ) permeable rocks can produce oil) SOME EXAMPLES OF POROUS ROCKS THAT CAN BE OIL BEARING ( seen on thin sections) NUMMULITES INVOLUTINA (MIDDLE EOCENE) (LIAS) 50 Mil. years 190 Mil. years 30
  31. 31. Hydrocarbon Reservoir Rocks Compattazione >Compattazione Classazione < Classazione Cementazione 31
  32. 32. As the source rock undergoes further heating due to increasedtemperature and pressure the resulting oil and gas migrateupwards and eventually get trapped in pockets in the rock calledreservoirs Reservoir Rock – Takoradi Shale, Takoradi 32
  33. 33. The Petroleum SystemHydrocarbon Traps Impermeable  Some rocks are permeable and allow oil and gas to freely pass through them  Other rocks are impermeable and block the upward passage of oil and gas  Where oil and gas rise up into a dome (or anticline) capped by impermeable rocks it can‟t Dome Trap escape. This is one type of an Permeable Oil Trap. 33
  34. 34. Oil and Gas is Contained in the Sedimentary Rocks in “Traps” The sediment thickness increases because the sea bottom sinks. Some rocks contain a large amount of organic matter. They are named “SOURCE ROCKS”. The source rocks produce oil & gas. Movements inside the earth crust can fold and break the sedimentary rocks and accumulation zones can be generated. These zones are named TRAPS. The oil & gas produced by the source rocks is able to move through the rocks and becomes trapped. The movement is called “MIGRATION”. TRAPSA trap needs the presence of an impermeablerock SEAL ROCK(a “SEAL ROCK”) with a convex shape and aporous / permeable rock (a “RESERVOIRROCK”). GASWhen a trap is big enough to contain a OILsubstantial oil accumulation it is called a “FIELD “ RESERVOIR ROCK 34
  35. 35. Types of Oil and Gas Accumulations STRATIGRAPHIC TRAPS may occur where the reservoir rock thins laterally or is „pinched-out‟ into surrounding seal rocksSTRUCTURAL TRAPSare often found along theedges of salt domes, in thecrests of „anticlirial‟ folds oralong fault lines.Distances from the surfaceare greatly reduced forclarity in this cross-sectionof underground strata. Anticlinal folds exposed in sea cliffs south of Cardigan, West Wales 35
  36. 36. AccumulationTypes of petroleum traps (A)A simple fold trap (B) Petroleumaccumulated in fossilized ancient core reef (C) A fault trap (D)Petroleum trapped against an impermeable salt dome.
  37. 37. Where oil & gas can be found Oil and gas can be found in traps created by faults and folds Source rock Source rock 37
  38. 38. Geophysicists find these reservoirs by bouncing sound waves off them, and timing how long it takes for the sound to come back Computers process the data to construct pictures of what the earth looks like underground. Drill here! Earth Science World Image Bank Image #h5inor 38 Earth Science World Image Bank Image #h5inpj
  39. 39. The Search for Oil and Gas - Seismic Surveys (Offshore) Kashagan, Caspian, September 2007 39
  40. 40. The Search for Oil and Gas - Seismic Acquisition (Offshore)Seismic Air Guns Caspian Sea, September 2007 40
  41. 41. The Search for Oil and Gas - Seismic Acquisition (Onshore) Seismic Survey Crew, Po Plain, Italy, 1950‟s 41
  42. 42. The Search for Oil and Gas - Seismic Acquisition (Onshore)Vibroseis Trucks 42
  43. 43. The Search for Oil and Gas - Seismic Acquisition (Onshore)Seismic Recording Cables Nigeria, 2005 43
  44. 44. The Search for Oil and Gas - Seismic Acquisition (Onshore)Shooting and recording the seismic data 44
  45. 45. The Search for Oil and Gas - Seismic AcquisitionRecording Seismic Data Navigation Centre, Seismic Acquisition Vessel, Caspian Sea, 2007 45
  46. 46. • Once an oil or gas prospect has been identified, a hole is drilled to assess the potentialusing a DRILLING RIG en.wikipedia.org/wiki/Image:Oil_platform.jpg 46
  47. 47. Drilling Rigs OFF-SHORE RIG ON-SHORE RIG DIFFERENT OFF-SHORE RIGS Jack-Up Fixed Semisub rig Drilling ship platform 100 m 500 m 1000 m 2500 m 47
  48. 48. Oil FieldsOil is Trapped in Sedimentary Rocks 48
  49. 49. A Drilling Rig is an equipment used in drilling holes into the earth. Here’s a sequence showing how holes are drilled, Then, steel casing is run and cemented First, a large drill bit is used to on the outside to keep the hole from drill a short interval of hole. collapsing. 0m 100mTAS Oct. 1998 49
  50. 50. 0mNext,a smaller bit is Then, thisrun inside the new hole isfirst casing. also cased off and cemented.This bit drillsout the bottomof thecasing, anddrills new hole. 100m 180m TAS Oct. 199850
  51. 51. Again, a smallerhole is drilled and smallerout, casing is run to keep the hole from falling in. TAS Oct. 1998 51
  52. 52. In this way, the hole is drilled in stages, until the target reservoir rock is penetrated. TAS Oct. 1998 52
  53. 53. How do Geologists tell if the reservoir has oil or gas?They do this by running logs across the zone. Logs are tools run on electric cablewhich record the physical properties in the rock such asresistivity, porosity, density, radioactivity, and pore pressure. TAS Oct. 1998 53
  54. 54. Here’s an example of what a log looks like. Geologists look at logs to decidewhether or not to complete a well (if there is oil), or abandon it (if there’s no oil). Gamma Electrical Porosity Radiation Resistivity Sand good porosity Shale 200 m Siltstone poor resistivity, Shale probably poor water porosity Siltstone Dolomite 500 m Shale good good porosity resistivity, Looks may have like oil or gas poor good porosity sand quality poor 3000 m resistivity, good probably porosity water TAS Oct. 1998 54
  55. 55. If the well looks good on the logs, we run a final string of casing across the productionzone, and cement it in place. TAS Oct. 1998 55
  56. 56. Then, we run perforating guns in the hole and perforate (shoot holes ) in the casingacross the productive zone. 56 TAS Oct. 1998
  57. 57. Production tubing is run, with a packer to isolate the produced zone from the casingabove. tubing Packer 57 TAS Oct. 1998
  58. 58. Finally, the well is produced into apipeline, which takes it to productionfacilities on surface. TAS Oct. 1998 58
  59. 59. • To enhance recovery, in some situations, a hole is drilled adjacent to the well andsteam is pumped down. The hot water helps to push the oil out of the rock and up intothe well. © California Department of Conservation 59
  60. 60. Off-shore production facilities may include various pipelines on the sea floorchanneled to a Floating Production Storage and Offloading (FSPO) Vessel for further processing. 60
  61. 61. Oil and Gas Production At the Refinery DistillationOil refinery Plant Car fuel Jet fuel Road taren.wikipedia.org/wiki/Image:Anacortes_Refinery_31911.JPG en.wikipedia.org/wiki/Image:Crude_Oil_Distillation.png  Before it can be used crude oil must be refined.  Hydrocarbons can be separated using distillation, which produces different fractions (or types) of oil and gas 61
  62. 62. The production facilities on land (eg Tema Oil Refinery, TOR) separates out thegas, oil, and water into their separate phases. Produced Gas Oil Production Separator Produced Water TAS Oct. 1998 62
  63. 63. From there, the oil and gas may be refinedfurther before being ready to market. Produced Gas Storage Tanks Oil Production Separator Oil Refinery Produced Water Finally, the gas and oil can be sold to power cars and heat houses. TAS Oct. 1998 63
  64. 64. Exploration and ProductionToday’s Major Oil and Gas Producing Areas USGS Global oil and gas occurrences are now well understood (Main producing areas shown in green). Only the Antarctica and the Arctic remain unexplored. 64
  65. 65. How Much Oil is there in the World ?Where is it ? In 2000 the world total oil reserves In 2000 the world total gas reserves were were 143 Giga Tons, so distributed: 146,000 Giga cubic meters, so distributed: With the current yearly consumption, world With the current yearly consumption, world gas reserves will last about 63 years oil reserves will last about 41 years THE PRODUCTION (2007) IS ABOUT 86 MILLION BARRELS EVERY DAY. THIS IS EQUIVALENT TO A CUBE HAVING A FACE EQUAL TO SIX FOOTBALL FIELDS. 1 barrel = 159 litres of oil 65
  66. 66. With Oil We Produce Energy ! Car fuel Airplane fuel Truck fuel Oil to produce electricity Ship fuel Cooking gas Road asphalt Gas or oil healting 66
  67. 67. Oil in your Everyday Life 67
  68. 68. Oil in your Everyday LifeOther uses en.wikipedia.org/wiki/Image:CD-R.jpg en.wikipedia.org/wiki/Image:Konserveri ng.jpg en.wikipedia.org/wiki/Image:Lilit.jpg Food additives CDs and DVDs Plastic Fertilizers and Pesticides The remaining 16% of crude oil is used for a range of purposes shown above as well as synthetic fibres, dyes and detergents 68
  69. 69. Oil and GasFuel source http://en.wikipedia.org/wiki/Image:Shellgasstationlosthills.jpg 84% of crude oil is refined into fuel, principally for cars and planes Demand is ever increasing, especially due to growth of Chinese economy blogs.sun.com/richb/resource/NBC_at_the_Pump.jpg 69
  70. 70. Oil spills Natural oil seeps are not unknown It is estimated that oil rising up through permeable rocks escapes into the ocean at the rate of 600000 tons per year. Tankers that flush out their holds at sea continually add to the oil pollution of the oceans. Oil spillage
  71. 71. Oil spills The oil spills occurs in two principal ways:  From accidents during drilling offshore oil wells  From wrecks of oil tankers at sea Oil spills represent the largest negative impacts from the extraction and transportation of petroleum. However, as a source of water pollution, they are less significant volumetrically than petroleum pollution from careless disposal of used oil.
  72. 72. Oil and Gas Drilling accidents may also unexpectedly hit a high pressure pocket that causes a blowout . An example occurred in the Gulf of Mexico in 1979 and in 2010 that released millions of gallons of An animal in an ocean where oil. oil spillage has occurred.
  73. 73. Gulf of Mexico spillage You may have heard the news about the Deepwater Horizon drilling rig which caught fire, burned for two days, then sank in 5,000 ft of water in the Gulf of Mexico The rig belongs to Transocean, the world’s biggest offshore drilling contractor. The rig costs about $500,000 per day to contract. The rig cost about $350,000,000 to build in 2001 and would cost at least double that to replace today.
  74. 74.  The rig represents the cutting edge of drilling technology. It is a floating rig, capable of working in up to 10,000 ft water depth. It is thought that somehow formation fluids – oil /gas – got into the wellbore and were undetected until it was too late to take action.
  75. 75. Deepwater Horizon on locationin better days
  76. 76. Taken shortly after the rigcaught fire – the mast is stillthere
  77. 77. The drilling mast has toppled over here –they usually melt pretty fast when fire breaksout
  78. 78. Support vessels using their firefighting gear to cool the rig
  79. 79. About noon Day 1
  80. 80. Day 2, morning
  81. 81. COAL Coal is not formed from marine organisms, but from the remains of land plants. The process requires anaerobic conditions, in which oxygen is absent or nearly so, since reaction with oxygen Fig 6: Picture of Coal destroys the organic matter.
  82. 82. COAL The first combustible product formed under suitable conditions is peat. Further burial, with more heat, pressure and time gradually dehydrates the organic matter and transform spongy peat into soft brown coal and then harder coals.
  83. 83. Formation of Coal Accumulation of land plant material Reducing conditions – coastal and inland swamps
  84. 84. Formation of Coal Organic accumulation is greater than destruction (because of reducing conditions) Organic matter builds up to form peat
  85. 85. Formation of Coal  Peat is compressed to form lignite – brown coal  Lignite is compressed and volatile compounds are lost to form bituminous coal – soft coal  Bituminous coal is further compressed and heated to form anthracite – hard coal
  86. 86. COAL (continued)Fig 7: Change in character of coal with increasingapplication of heat and pressure.
  87. 87. COAL (continued) As the coals become harder , their carbon content increases, and so does the amount of heat released by burning a given weight of coal. The hardest, high carbon coals are the most desirable as fuels because of their potential energy yield. However, the heat to which coals can be subjected is limited when compared with oil. Overly high temperatures lead to metamorphism of coal into graphite.
  88. 88. Environmental impacts of coals use A major problem posed by coal is the pollution associated with its mining and use. Like all fossil fuels it produces carbon dioxide (CO2)when burned It produces significantly more carbon dioxide per unit energy released than oil or natural gas. Sulfur in coal  Sulfur content of coal can be more than 3 percent, some in the form of iron sulfide mineral pyrite (FeS2), some bound in the organic matter of the coal itself
  89. 89. Environmental impacts of coals use When sulfur is burned along with coal, sulfur gases are produced and these gases are poisonous and are extremely irritating to eyes and lungs. These gases also react with water in the atmosphere to produce sulfuric acid and then falls to earth as acid rainfall. Acid rain falling into streams and lakes can kill fish and other aquatic life. It can acidify soil , stunting plant growth. It can also dissolve rocks
  90. 90. Environmental impacts of coalsuse Ash  Coal use produces a great deal of waste.  The ash residue left after coal is burned ranges from 5 to 20 percent of the original volume.  It consists mostly of noncombustible silicate minerals and also contains toxic metals.
  91. 91. Environmental impacts of coalsuse If released with waste gases, the ash fouls the air. It must be disposed when confined within the combustion chamber. If exposed at the surface, fine ash, with its proportionately high surface area, may weather very rapidly, and the toxic metals can be leached from it, thus posing a water-pollution threat. Uncontrolled erosion of the ash can also cause sediment pollution. The magnitude of this waste disposal problem should not be underestimated.
  92. 92. Coal mining hazards and environmental impacts Coal mining poses further problems. It is notoriously dangerous, as well as expensive. Mines can collapse; miners may contract black lung disease from breathing the dust. There is also the danger of explosion from pockets of natural gas that occur in coal seams.
  93. 93. Coal mining hazards and environmental impacts
  94. 94. OIL SHALE The potential fuel in oil shale is a waxy solid called Kerogen, which is formed from the remains of plants, algae, and bacteria. The rock must be crushed and heated to distill out the shale oil which is then refined somewhat as crude oil is to produce various liquid petroleum products.
  95. 95. OIL SHALE
  96. 96. TAR SAND Tar sands are sedimentary rocks containing a very thick, semi-solid, tarlike petroleum. Tar sand deposits may represent immature petroleum deposits, in which the breakdown of large molecules has not progressed to the production of lighter and gaseous hydrocarbons. The lighter compounds may have migrated away, leaving this dense material behind.
  97. 97. TAR SAND The tar is too thick to flow out of the rock and must be mined, crushed, and heated to extract the petroleum, which can be refined into various fuels.
  98. 98. Sedimentary Basins of Ghana Ghana has four sedimentary basins; three offshore and one onshore. The offshore (below the sea bed) basins are the Tano Basin,Saltpond Basin, Accra- Keta Basinand the onshore (land based) basin is the Voltaian Basin
  99. 99. CHALLENGER SOPCL AFREN AFREN ORANTO CELTIQUE CELTIQUE KOSMOS VITOL YEPHESS
  100. 100. Offshore exploration activities Accra /Keta basin Saltpond Tano Cape Three Points
  101. 101. EXPRESSION OF INTEREST 1982-2004ACREAGES1982-2005 APPLICATIONS WITH STERLING ORANTO MONCRIEF OVERT MIDWAY BRITISH BORNEO YEP TAPOIL Kosmos 3D Vanco 3D Vanco 3D
  102. 102. COMPARATIVE SIZE OF VOLTA BASIN WITH RESTOF GHANA’S SEDIMENTARY COVER (%) AREA AREA AREA SIZE (km²) UNDER LICENSED UNLICENSED LIC. Voltaian Basin 103,600 0 0 103,600 (Inland)Coastal Onshore 3,500 0 0 3,500 Shelf Region 23,000 4,869 21.2 18,131 (0 – 200m) Deepwater 26,900 22,127 82.3 4,773 (200 – 3000m) Area Total 157,000 26,996 17.2 130,00410/19/2012 VoltaianProjectUnit 107
  103. 103. Potential of the Voltaian Basin• The Voltaian Sedimentary Basin has a very bright outlook for its hydrocarbon exploration. There really exists a thick sedimentary cover of at least 6km in its deepest sections.• There must certainly be oil + gas in the Voltaian Basin waiting to be tapped. On account of the thickness of its sedimentary cover and the bituminous and other hydrocarbon indications encountered in the Soviet wells of the 1960s, this Basin is deemed to possibly harbour favourable conditions for generation and accumulation of commercial quantities of hydrocarbon.• There are possible structural and stratigraphic leads that could provide favourable architecture for generation and accumulation of commercial quantities of hydrocarbon.• The occurrence of sandstones and limestones in the succession, may serve as suitable reservoir rocks.• Known oil and gas discoveries and production already exist in analogous basins in North Africa and elsewhere in the world.10/19/2012 VoltaianProjectUnit 108
  104. 104. Definitions The Upstream Petroleum Industry involves Exploration, Development and Production. On the other hand, the Downstream refers to the refining/processing and distribution of petroleum products.
  105. 105. The framework is established and given legal backing bytwo main statutes: • PNDC Law 64 • Petroleum Exploration and Production Law (PNDC Law 84) • These laws are supplemented by the Petroleum Income Tax Law (PNDC Law 188)
  106. 106. PNDC Law 64 PNDC Law 64 established the Ghana National Petroleum Corporation and made it responsible for managing the petroleum resources in Ghana. The Law, in the main, spells out the organizational structure, the objects and modus operandi of GNPC. The supervising Ministry of the activities of GNPC is the Ministry of Energy
  107. 107. PNDC Law 84 The Petroleum Exploration and Production Law (PNDC Law 84) provides the framework for the management of oil and gas exploration, development and production. The Law establishes the contractual relationship between the State, GNPC and the prospective investor in the upstream operations. It defines the basic terms and conditions of any Petroleum Agreement, spelling out the rights and obligations of each party with appropriate sanctions.
  108. 108. Model PetroleumAgreement The area that has been applied for and awarded; Exploration Period and the related Work Programme, Cost of the Work Programme, and Sanctions in case of default; Benefits: Clearly defined benefits to be derived by the State which in the case of Ghana is through the Royalty Tax System:  Rate of Royalty  Carried Interest  Additional Interest  Additional Oil Entitlement (AOE)  Income Tax  Annual Surface Rentals
  109. 109. Monitoring Of Operations A Joint Management Committee (JMC) which is established by the Petroleum Agreement, comprising equal number of representatives from GNPC and Investor and chaired by GNPC. GNPC is empowered to review the work programme of Investor and audit:  the cost of operations,  procurement processes of Investor,  employment contracts made by Investor and has the power to approve, reject or ask for modification The Law empowers GNPC to attach its officers to operations during all phases of operations
  110. 110.  The benefits accruing to the State from any petroleum exploration and production venture is predetermined in the Petroleum Agreement and approved by Cabinet and ratified by parliament before the commencement of the exploration activity.
  111. 111.  Because of the risky nature of the exploration and production business and the State’s desire to avoid high exposure in petroleum exploration and production activity, it has adopted the Royalty Tax System instead of the Joint Venture System. The main advantage of the Royalty Tax System, is that the resource owner, that is, the State, can get its resources exploited and receive benefits without making any financial contribution
  112. 112.  Under the system, the State derives its benefits from levies on production. The levies are:  Royalty;  Carried Interest;  Paying Interest;  Additional Oil Entitlement;  Petroleum Income Tax; and  Annual Surface Rental
  113. 113. Hypothetical benefits to thenation in the current discovery The benefits from any discovery is spelt out in the Petroleum Agreement before its execution. Let us assume a production of 100,000 barrels per day, which is the minimum expected from the Mahogany/Hyedua Field in full field development
  114. 114.  From the above computation, oil accruing to the State is calculated as 38,209 barrels per day out of 100,000 barrels per day production US $60 a barrel Χ 38,209 = US $2,292,540.00 per day 365 Χ $2,292,540.00 = US $836,777,100.00 per annum.
  115. 115. Concluding remarks All these fossil fuels are running out and burning them increases carbon dioxide in the atmosphere which increases the greenhouse effect, causing global warming. Some fossil fuels contain sulphur and when they burn this becomes sulphur dioxide, a poisonous gas which reacts with water in the atmosphere to form sulphuric acid or acid rain. To solve the problems of fossil fuels, we need to develop renewable forms of energy such as:  Hydropower  Wind Energy  Biomass 123

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