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Business News of Friday, 4 January 2019

Source: Graphic.com.gh

Oil blocks: Sixteen companies to know fate by January 21

Sixteen companies that expressed interest and submitted applications for oil blocks in the country will know their fate in the next round of the allocation process by January 21.

Among the companies whose pre-qualification documents are being perused are ExxonMobil, British Petroleum, Tullow Ghana Limited, Total, ENI Ghana, Vitol, Kosmos Energy, Aker Energy and the China National Offshore Oil Corporation (CNOOC).

The rest are Cairn Energy, Qata Petroleum, the Global Petroleum Group, First E&P, Sasol, Equinor and the Harmony Oil and Gas Corporation.

Explanation

The Minister of Energy, Mr John-Peter Amewu, who stated this at a news conference held in Accra yesterday, said the pre-qualified companies would have up to May 21, this year to submit their bids, while the final award of contract to successful bidders would be made on August 31.

He explained that following the invitation for expression of interest and pre-qualification that was sent out by the Licensing Round Bid Evaluation and Negotiation (LRBEN) Committee in October 2018, 60 applications had been received from 16 companies for the five oil blocks on offer.

Some of the 16 companies submitted multiple applications.

"We found that 58 of the applications were valid. Out of these, 43 were interested in competitive bidding and 15 were for direct negotiation, while two applications for Block One were invalidated because Block One has been reserved for the Ghana National Petroleum Corporation (GNPC)," he said.

Diligence

Mr Amewu said a team was currently evaluating the prequalification applications to ensure that the companies that would be announced for the next round of the allocation process had the requisite capacity to exploit the resource.

He said the modalities for direct negotiations for oil blocks would be made public at the right time.

“I want all of us to note that for every winning bid, there shall be a five per cent equity participation expected of indigenous Ghanaian companies in each of the petroleum agreements. I am, therefore, encouraging locals to prepare adequately to take advantage of this opportunity,” he said.

Mr Amewu said it was possible that some of the companies would start work on the oil blocks before the end of 2019, after the ratification of the contracts by Parliament.

He gave an assurance that the government would continue to adhere to high levels of accountability and transparency in the allocation of the oil blocks to ensure that petroleum resources were managed judiciously.

Milestones

The Ministry of Energy inaugurated the LRBEN Committee for the first ever oil and gas licensing round for six offshore oil blocks in the Cape Three Points enclave in the Western Region in August last year.

The move was in fulfilment of Section 10 of the new Petroleum Exploration and Production Act, 2016 (Act 919) that requires that a transparency regime be enforced to improve the management of the country’s petroleum resources.

To give real meaning to that provision, President Nana Addo Dankwa Akufo-Addo launched the first oil and gas licensing round on October 15, 2018, paving the way for a paradigm shift from the era when oil blocks were allocated on first come, first served basis.

Following the launch of the historic regime, a number of stakeholder engagements and workshops with civil society organisations (CSOs) were held by the Ministry of Energy to explore ways of effectively implementing the new regime.

The ministry also took advantage of the Africa Oil Week Conference held in South Africa from November 5 to 9, 2018, to launch the LRBEN Committee on the global stage, attracting interest from scores of stakeholders.