Chevron Shell Sign Preliminary Ghana Oil Agreement

Shell and Chevron have signed a non-binding agreement with Ghana for production rights over the South Deepwater Tano Cape Three Points oil and gas block. This comes as the West African country seeks to attract new investment and reverse declining petroleum output.

The memorandum of understanding was signed with the Ghana National Petroleum Corporation on Tuesday. Shell said the agreement provides a framework for negotiations over the final terms of the licence and remains subject to regulatory approvals. Chevron confirmed the agreement and noted that it continues to assess new exploration opportunities globally.

The South Deepwater Tano Cape Three Points block is located in Ghana’s Tano Basin and covers about 3,482 square kilometres in deep to ultra-deep waters. Its hydrocarbon potential has been estimated at more than 3 billion barrels. The companies and Ghana’s state oil entities are expected to appraise an existing discovery and assess the block’s wider exploration potential.

The agreement comes as Ghana reviews the legal and fiscal framework governing its upstream petroleum industry. The government is seeking to make the sector more attractive to international oil companies as production from existing fields declines.

Energy Minister John Jinapor said proposed reforms include reducing the Ghana National Petroleum Corporation’s initial carried interest in upstream projects from 15% to 10%. The government is also considering a simpler tax regime and differentiated royalty rates based on water depth.

The proposed changes are intended to reduce barriers to investment and encourage oil companies to commit capital to new exploration and production projects.

Ghana’s crude oil production has declined substantially from its peak. Production fell from 71.44 million barrels in 2019 to 48.25 million barrels in 2024, according to data cited by the US International Trade Administration.

The decline has increased pressure on the government to attract investment into new fields while maximising output from existing assets.

Ghana is also seeking to extend the productive life of its existing oil infrastructure. New investments in the Jubilee and TEN fields by Kosmos Energy, Tullow Oil and their partners are expected to support drilling of as many as 20 additional wells and help increase production.

The Shell and Chevron agreement therefore represents an important test of Ghana’s efforts to revive upstream investment.

However, the agreement remains preliminary. Final production rights, licence terms, ownership arrangements and work commitments will depend on further negotiations and the completion of the required regulatory approvals.

For Ghana, securing interest from two major international oil companies provides a signal that its deepwater resources remain commercially attractive as the government seeks to rebuild momentum in the petroleum sector.

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