Accra, March 15, GNA - Professor Michael Oquaye, Energy Minister, on Wednesday told parliament that the main objective of the government for undertaking oil and gas exploration "is the achievement of rapid and effective exploration of Ghana's geological potential by reputable oil companies."

"Ghana is endowed with about 157,000 square kilometres of sedimentary basins. Approximately 25,000 square kilometres have been licensed to international oil and gas companies, leaving about 132,306 square kilometres out of which 103,600 sq/km is covered by the inland Voltarian basin," he said.

The Minister was responding to a question from Mr Joseph Labik, MP for Bunkpurugu-Yunyoo on the progress and prospects of oil exploration in the country.

The Energy Minister said prior to 2001, the Ghana National Petroleum Corporation (GNPC) did not focus on primary exploration activities. "They were involved in other non-exploration businesses such as communications, gold mining, salt mining, game reserve, marine and agriculture. As a result of this, they were heavily indebted." In 2001, they were re-organised to refocus on exploration," the Minister added.

He said following the restructuring of GNPC, it became clear that a more competitive and fiscal regime, involving the regulations governing profits and agreements between and Ghana and the oil companies, were needed.

He said there was a need to review existing fiscal regime and in furtherance of this objective, assistance was sought from the Economic and Legal section of the Special Advisory Services Division of the Commonwealth Secretariat Board in London to review the existing regulatory regime for promoting petroleum exploration in Ghana.

"In response to this request, a review was undertaken, which resulted in a proposal for changes in the fiscal and regulatory regime." He said the proposed changes have been sent to cabinet for their consideration and approval.

The Minister said, in order to guarantee drilling commitment, it has become necessary to require that contractors commit to drill at least one well during a stipulated period of time.