KWAME NRUMAH UNIVERSITY OF SCIENCE AND TECHNOLOGY

DEPARTMENT OF PETROLEUM ENGINEERING

COLLEGE OF ENGINEERING

NAME: ADELI JOEL

MINISTRY OF ENERGY
UNIT: PETROLEUM UPSTREAM
INTERNSHIP REPORT
Contents
ACKNOWLEDGEMENTS .......................................................................................3
INTRODUCTION .....................................................................................................4
Preface ....................................................................................................................4
Nature Of Upstream and Associated Activities .....................................................5
Exploration .............................................................................................................5
Appraisal ................................................................................................................5
Development ..........................................................................................................5
Production ..............................................................................................................6
BACKGROUND .......................................................................................................6
PETROLEUM UPSTREAM UNIT...........................................................................7
ONGOING PLANS ...................................................................................................9
CONCLUSION ........................................................................................................10
RECOMMENDATION ...........................................................................................10
REFERENCES.........................................................................................................10

Figure 1: Ghana's Fiscal Upstream Regime . ........................................................8

ACKNOWLEDGEMENTS
My foremost gratitude is to the Almighty God for preservation , strength and
protection for the time being. I’m also highly indebted to my parents for the
numerous sacrifices and financial resources made available to my education and also
to the staff of the Petroleum Upstream Unit and Gas Unit of the Petroleum Upstream
Department of the Ministry Of Energy for their support , teachings and directions
during the period of internship.
INTRODUCTION
Preface
This report covers account of a 3 – weeks industrial attachment undertaken at
Ministry Of Energy, Petroleum Upstream Unit from the 10th of October,2022 to 28th
of October , 2022 as part of a requirement by the university.
The Petroleum Industry value chain is the linked series of distinct but inter – related
activities that transform crude oil and natural gas into valuable end user products.
These activities are broadly organized into three main sectors namely ; Upstream ,
Midstream and Downstream.

However, the core focus of this report is based on the upstream sector , since I
worked in the Petroleum Upstream Unit of the Ministry Of Energy.
The Ministry Of Energy is a multisector regulator of the Energy Industry in Ghana
and the sector ministry for the formulation , coordination and monitoring of the
implementation of energy policies through sector agencies.
Nature Of Upstream and Associated Activities.
In Ghana and many oil and gas producing economies, the upstream subsector of the
oil and gas value chain is erroneously perceived as synonymous with offshore
activities. The upstream subsector involves the following interlinked activities
 Exploration
 Appraisal
 Development
 Production
 Abandonment
Exploration
The exploration phase involves extensive geological and geophysical studies. It
comprises of gathering , processing and interpretation of seismic data. An
exploration well is a well drilled to establish the presence or otherwise of petroleum
in any given prospect.The activities prior to exploration and field appraisal include
pre – licensing and licensing of blocks ; management of extraction and associated
waste during exploration, development and production phase.
Appraisal
This is closely linked to the exploration activities. This phase ensues immediately
after successful exploratory activities have been undertaken , leading to hydrocarbon
discovery. The appraisal phase basically works to provide the necessary and
sufficient data that forms the basis for further related decisions on the development
of fields through the drilling of additional wells to obtain relevant seismic data and
samples with the objective of effectively delineating the reservoir. Key activities
undertaken during the appraisal phases are ;
 Planning and execution of a data acquisition program.
 Reprocessing existing seismic data.
 Drilling of appraisal wells and evaluation of the results obtained from the
seismic and drilling activities.
 Use of the data update reservoir models.
 Carrying out initial development planning and an environmental impact
assessment (EIA) study.
Development
This stage of the value chain kicks in when the appraisal activities has provided the
needed, necessary and sufficient conditions leading to the firm decision for field
development. Field development typically starts with the negotiation and execution
of the Plan Of Development , PoD which provides the framework for fiscal and
physical field optimisation plans.A typical field development plan considers the
following;
 Objectives of the development
 Petroleum engineering data
 Operating and maintenance objectives
 Description of the engineering facilities
 Cost and manpower estimates
 Project planning and budget proposal .
Production
The completion of the development stage of the value chain ushers in the production
stage, which is usually referred to as the commercial state. The activities in this stage
include recovering the oil and gas fluids for processing and export of the crude oil
and raw gas for refinery and processing. Hydrocarbon production goes through three
phases namely ; build – up period , plateau period and the decline period after which
abandonement sets in.

BACKGROUND
The Ministry Of Energy is the sector ministry responsible for the formulation ,
coordination and monitoring of the implementation of energy policies through it’s
sector agencies currently headed by Dr. Matthew Opoku Prempeh. The ministry
represents Government of Ghana in all energy sector related matters through various
regulators such as the Petroleum Commission , Energy Commission , National
Petroleum Authority,NPA and many others .

DAILY ACTIVITIES UNDERTAKEN AT PETROLEUM DEPARTMENT.

The Petroleum Department is a department establishment at the Ministry Of Energy
to enable the sector ministry live up to the mandate of coordination and monitoring
of Ghanaian Petroleum Industry through sector agencies. To undertake this mandate
the Petroleum Department is made up of the three units namely;
 Petroleum Upstream Unit
 Petroleum Downstream Unit
 Gas Unit
  Health Safety Security and Environment
During my industrial attachment , I was assigned at the Petroleum Upstream Unit
but had the chance to interact, participate at stakeholder meetings and in house
meetings of the Department.

PETROLEUM UPSTREAM UNIT

The unit deals with fiscal regime and contract negotiation and works closely with
other units and HSSE. The fiscal regime deals with various revenue streams realised
from petroleum resources by the Ghana Group ( Ghana Government and Ghana
National Petroleum Coorporation, GNPC ) which is derived from a number of
sources given in the table below.
Revenue Stream Definition Value
Royalty The State , as the owner of the resource, is 5% to 12.5%
entitled to part of the total production before of total gross
any deductions whatsoever are made. This production
can be paid in cash or kind (oil), though the
practice has been for the State to take it in
kind
Carried Interest The State is ‘carried’ by the International Oil A minimum
Companies (IOCs) in the sense that no cost is of 15%
paid by the State during Exploration and
Development activities , The State , however,
pays for it’s share of the cost when oil
production starts
Participating In the event of a commercial discovery, Additional
Interest Ghana has the option of increasing it’s stake interest has
in the field within a specific period of time been no more
following the declaration of the discovery. than 25%
Here, the State pays for all costs from that
stage onwards including Development and
Production cost if it decides to increase it’s
interest
Corporate Income This is the tax on the profits of oil and gas 35%
Tax companies
 Surface Rentals Annual rents paid by the IOCs to the State for Roughly
leasing the surface of the land or sea to between USD
explore for oil and gas resources. Surface 30 – USD 100
rentals are paid in dollars per square per sq. km )
kilometer of the operated area
Additional Oil The State becomes entitled to an additional Maximum of
Entitlements percentage of the IOCs share of crude oil on 30% of
each separate field once profitability passes government
certain agreed rate of return threshold take.
Other Receipts (1) Capital Gains Tax : This is applied when N/A
an IOC sells its petroleum assets and realises
a profit . Tax is charged on that profit .

(2) Dividends : Refers to monies paid

regularly usually annually by GNPC to the
State out of it’s profits

Figure 1: Ghana's Fiscal Upstream Regime .

Contract negotiation at the Upstream Unit is carried by the Government Negotiation

Team, a crop of seasoned professionals made up of lawyers , representatives from
the Auditor General Department , Petroleum Commission , GNPC and the Ministry
Of Energy schedule meetings to draft Petroleum Agreements with the interest of the
country at heart. Currently, three Petroleum Agreements are being drafted ENI , a
major in the upstream industry seeking to increase it’s blocks offshore , SINOC , a
Chinese upstream petroleum firm seeking to acquire a block off Ghana’s coast and
COCA , a company with similar interest as SINOC. The Government Negotiation
Team has the mandate to represent the Government of Ghana and ensure that all
agreements signed are in benefit of the people of Ghana strictly adhering to the
Petroleum (Exploration and Production ) Act , 2016 Act 919 , Petroleum (
Exploration and Production ) Regulations , 2018 and other laws and regulations
issued by the Parliament of Ghana.
Also, the Petroleum Upstream Unit as part of it’s monitoring role holds monthly
meetings with several industry players and stakeholders such as Tullow PLC to
ascertain the day to day happenings at the producing fields operated by the Irish
Company and means to optimize production of oil and gas and solve issues arising
and maintain gas supply to Ghana Gas for further processing for use in power
generation, industrial uses for combined heat and power processes and LPG for
domestic uses which various businesses thrive on.

ONGOING PLANS
During interactions I had the opportunity to have insights in the work done by the
the downstream unit and the gas unit of the department.
The downstream unit developed the LPG Cylinder Recirculation Model which is the
implementation model for the National LPG Policy aimed at providing direction for
marketing and distribution of LPG in a safe and efficient manner, so as to facilitate
an increase in access to LPG nationwide. The Ministry of Energy has mandated the
National Petroleum Authority ( NPA ) to constitute an implementation committee to
plan , oversee and ensure the smooth and successful implementation of the National
LPG Promotion Policy in order to increase access to LPG usage and reduce the
number of unfortunate accidents resulting from the misuse and inappropriate
handling of petroleum products especially LPG.
The core objectives of this policy are:
 Will help curb rapid deforestation arising from reliance on wood fuel or
firewood
 It will also ensure the availability of robust and standard health, safety and
environmental practices in the production, marketing and consumption of
LPG in the country
 Curb the regular explosions and to ensure stringent monitoring mechanisms
It is however expected that this bill will ensure that at least 50% of Ghanaians have
access to safe, clean and environmentally friendly Liquefied Petroleum Gas by 2030.
The Ministry of Energy in collaboration with other sector Ministries – Transport,
Environment, Science and Innovation, Finance, Lands and Forestry , Water and
Sanitation produced the National Energy Transition plan to provide a roadmap on
Ghana’s transition pathways to ensure sustainable development that maximizes the
welfare of the citizens. The plan is expected to span from 2022 to 2070.
The specific objectives of the Plan are to;
 Identify viable pathways for the country to transition towards carbon –
neutrality within a secure and efficient energy sector.
 Harness the opportunity for a fair and equitable energy transition as the
country relies on carbon intensive industries for economic growth
 Evaluate the impacts of energy transition on the economy ( infrastructure ,
government revenue , jobs and social development );
 Develop medium to long – term targets and policies for achieving a carbon –
neutral economy.
 Estimate the cost of implementing the plan and identify financing options for
the realization of the stated objectives.

CONCLUSION
Challenges are an inevitable part of all human endeavor. The internship experience
enabled me develop certain critical workplace skills as as teamwork , assertiveness
, cooperation , and communication. I have also improved my human relations which
is sacrosanct in working together with various people to achieve goals. Working
with the Ministry Of Energy enabled me put in practice some concepts learnt in the
classroom.

RECOMMENDATION
Even though I had only 3 weeks of internship , the experience gained was invaluable
and enabled me to a certain extent bridge industry with academia. I therefore
recommend that the department should help students in finding organizations to
intern.

REFERENCES
 Gas Challenge Study Guide,2022 Edition.
 https://www.energymin.gov.gh .