“TOGETHER WE BUILD”

NO GOVERNMENT GUARANTEES

NAVAL FORWARD OPERATING BASE FOR GHANA NAVY

WITHIN THE FACILITY

STRATEGICALLY LOCATED IN THE GULF OF GUINEA TO SUPPORT OIL

AND GAS REGIONAL ACTIVITY

BRINGS EFFICIENCY TO THE INDUSTRY

TO BE THE CENTER OF

EXCELLENCE FOR THE WEST

AFRICAN OIL AND GAS INDUSTRY

President Kuffour and Ghanaian

delegation visiting Lonrho’s Luba Free

Port in 2005

BACKGROUND EXTENSIVE ENGAGEMENT WITH GOVERNMENT PRIOR TO MOU BEING SIGNED• Engagement with Government of Ghana started mid 2009

with Ministry of Energy, Energy Commission and GPHA, proposal reviewed with others tabled to GoG for the development of a dedicated oil and gas port.

• June 2010 President Mills confirms his support and directs task force to visit Lonrho facility in Luba, Equatorial Guinea

• July 2010 GoG team visited Luba lead by GPHA, Ministry of Energy and Energy Commission

• Visit report in July 2010 recommended the appointment of Lonrho to undertake the development.

Site Selection Advised to GoG December 2011

FEASIBILITY PROCESS • Ministry of Transport SMTDP in June 2011 for 2012 - 2014

calls for new deepwater Oil & Gas port• MOU signed with Government of Ghana August 2011• Extensive Technical studies and surveys undertaken• Master plan developed based on industry requirements• Environmental and Social Impact Assessment undertaken

to EPA standards and approved• Extensive Community and Stakeholder Engagement &

Agreements in place• Support from International Development Agencies for

Social Development Programs• Policy Directive was that no government guarantees will be

available to support finance of the project

The Project

OWNERSHIP STRUCTUREClear Ownership Structure

45% owned by Ghanaian shareholders(*10% free carry for Government of Ghana 35% purchased on commercial terms by Ghanaian institutions)

35% owned by Lonrho20% owned by other institutional investors

* Ghanaian Investor group co-ordinated by Ministry of Finance

Atuabo Freeport Ghana Ltd

Lonrho

35%

Other Institutional Investors

20%

Government of Ghana

10%

Ghanaian Equity Investor Group

35%

PROVIDE PORT FACILITIES SOLEY TO

SUPPORT THE OIL AND GAS

INDUSTRY

Commercial Agreement

GENERAL PRINCIPLES

• Governed by the laws of the Republic of Ghana

• Chair person nominated and appointed by Government of Ghana

• Scope of Atuabo Free Port activities limited only to support the Oil and Gas Industry not competing with commercial maritime traffic served by GPHA

PRIVATE SECTOR FINANCED

Commercial Agreement

FINANCIAL OBLIGATIONS

• No Government Guarantees

• No requirement to underwrite revenue flows from Government

• Project funded by private sector

TRANSPARENT & AUDITABLE

REVENUES TO GOVT

Commercial Agreement

FINANCIAL BENEFITS TO THE GOVERNMENT OF GHANA

• Dividend payment from shareholding• Royalty payments from shipping traffic, inward tonnage to

Ghana and areas leased to tenants of the facility• Broadens the tax revenue base• Attracts new FDI as a result of the creation of a competitive

platform & center of excellence for international companies to support regional oil and gas operations

• Increased tax revenues from increased employment• Efficiency of operations resulting in lower operating costs

and ability to achieve production targets

FOCUS ON COMMUNITY

SUPPORT

Commercial Agreement

OTHER PAYMENTS

• Land lease payments to Community via Administrator of the Stool Lands

• Obligation to allocate funds to a Development Assistance Trust that focuses on social infrastructure developments required by the community

• Revenues generated for an Environmental Trust. Funds to support environmental programs in the Western Region.

• Compensation payments to members of the community in line with the agreed compensation rates

TRANSFER OF PORT FREE OF

CHARGE AT END OF

AGREEMENT TERM

Commercial Agreement

RIGHTS & OBLIGATIONS OF ATUABO FREE PORT

• Finance, Develop, construct, manage and operate Free Port dedicated to support the Hydrocarbon industry for the term of the agreement.

• Provide sufficient economic infrastructure to support the activities for the oil and gas industry.

DELIVERS ADDED VALUE TO LOCAL CONTENT POLICY

Commercial Agreement

LOCAL CONTENT AND LOCAL PARTICIPATION

• Government to own 10% as free carry interest

• Ghanaian Institutions to be able to purchase 35% of the equity on commercial terms

• Project provides the infrastructure platform for the oil and gas industry to execute more value added work in Ghana and provide the competitive platform for Ghana to compete in the West African region and deliver “regional content”

DELIVERING NEW INFRASTRUCTURE

FOR GHANA

Commercial Agreement

OBLIGATIONS ON GOVERNMENT OF GHANA

• Grant Atuabo Freeport Ghana Ltd the sole rights to develop, manage and operate a free port for the oil and gas industry in the Western Region for a duration of 10 years from commercial operation date of the port. After that date no restriction.

• Issue licenses and permits for the duration of the commercial agreement

Scope of market the port serves is limited

and does not compete with GPHA commercial clients

Commercial Agreement Clause 7• Sole rights is only for an Oil and Gas Free Port for the

duration of 10 years from commercial operation date. This is much shorter period than is typical for such infrastructure projects and a requirement from the debt financiers.

• Recognizes the existing dedicated berth that Takoradi currently supports the industry with plus the ability to expand that support by a further berth for the oil and gas industry. There are no restrictions on Takoradi to expand the port operations to cope with the growing commercial maritime traffic.

• GoG has the ability to develop additional facilities should Atuabo Free Port not expand to meet industry needs that are commercially viable.

NO RISK TO NATIONAL SECURITY

Commercial Agreement

• National Security & Defense Forces have full access in accordance with Constitutional and legal rights.

• Port security will be in line with Ghana Maritime Security Act and fully compliant with ISPS standards.

• Entities that have regulatory authority are fully recognized and able to exercise their mandated authorities

• Suitable Infrastructure provided to Ghana Immigration Services, Ghana Revenue Authority and Police

CONSTRUCTION PROGRAMME

CONSTRUCTION TIME

Substansive+Works+Commence+

Procurement+of+Major+Materials+

Commence+Construc8on+of+Industrial+Buildings+

Comple8on+of+Main+Breakwater+upto+CH+1.6+

SoC+Opening+of+MOSB+/+Fabrica8on+Area+&+airstrip+

Comple8on+Rig+Repair+and+remaining+areas+

M1+ M2+ M3+ M4+ M4+ M5+ M6+ M7+ M8+ M9+ M10+ M11+ M12+ M13+ M14+ M15+ M16+ M17+ M18+ M19+ M20+ M21+ M22+ M23+ M24+ M25+

Atuabo'Free'Port'Timeline'

KEY MILESTONES - operational 25 months

1.6km of breakwater completed - Month 17

Onshore Supply Base and Fabrication Areas ready for tenant works - Month 11

Aerodrome & SupplyBase Quay Completed - Month 21Partial Port Operations Commence

Rig Repair and remaining Breakwater areas completed - Month 25

WIDE ENGAGEMENT

STAKEHOLDER ENGAGEMENT

The engagement plan includes

• Consultation with stakeholders• Engagement exercises with focus groups• Disclosure of consultation

FOCUS GROUP DISCUSSIONS

STAKEHOLDER ENGAGEMENT

•Extensive Community and Stakeholder Engagement •Engaged all the various groups of people in the community for example fisher-folks, farmers, women, local gin distillers, coconut oil producers, school children etc•Key messages in both English and Nzema ( local dialect)•Engaged government agencies and CSOs.•Environmental and Social Impact Assessment undertaken to EPA standards and approved.

CONSULTATIVE PROCESSES

LIVELIHOOD RESTORATION PLAN

•Extensive Livelihood Restoration Planning with a committee formed from:

•Two people representing each community on the committee•Representatives from government agencies, Departments and Civil Society •Valuers, social scientists, surveyors, Atuabo Freeport and specialist social consultant SRC Consulting

MITIGATIONS FOR IMPACTS

DESIGNED

ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT

Full Environmental Impact Assessment Available on website but the study looked at impacts such as •Loss of access to fishing area•Loss of farm lands•Increased in dust pollution generated by traffic movements.•Noise levels•Coastal erosion

CATAYLST FOR DELIVERING VALUE

ON LOCAL CONTENT POLICY

SKILLS DEVELOPMENT AND PROCUREMENT PORTAL

•Sominu Manpower Agency - community based skills development programme that is commercially sustainable•Skills survey undertaken to understand skills gap and inform skills development programme•Transparent tendering of opportunities via the procurement portal on company website

LOCAL CONTENT TO BE

DELIVERED AND ALLOWS GHANA

TO COMPETE REGIONALLY

NO IMPACT ON GOVERNMENT FINANCES OR GUARANTEES

REQUIRED

MODEL FOR PRIVATE

PARTICIPATION IN DELIVERY OF STRATEGIC

ASSETS

DOES NOT COMPETE WITH

GPHA TRADITIONAL

MARKET

BRINGS EFFICIENCY TO THE INDUSTRY

AND MEET PRODUCTION

TARGETS

STRONG STAKEHOLDER

SUPPORT

JOB CREATION

“TOGETHER WE BUILD”