Oil Exploration: Government to complete first licensing round this year
Government is expected to complete the first round of the bidding and licensing of oil blocks for exploration by international oil companies (IOCs) by the end of this year.
This is according to Director of Petroleum Upstream at the Ministry of Energy, Benjamin Asante.
Ghana launched its first oil and gas licensing round in October 2018. This was in line with the country’s new Petroleum Act, [Act 919].
The objective of the licensing round was to ensure transparency and fairness in the prudent and efficient management of petroleum resources and to enable the Government of Ghana accelerate upstream activities so as to increase reserves and production of petroleum resources.
Six blocks were identified to be awarded, three of the blocks were to be awarded through an open and competitive bidding process, two through direct negotiations and one to be solely operated by the Ghana National Petroleum Corporation (GNPC).
Quizzed as to when government will commence a second licensing round for allocation of oil blocks, Mr Asante noted the first licensing round would have to be fully completed before another period can be set for a second licensing round.
Adding that he cannot for now give a definite time for which government will commence a second licensing round.
“For now I can’t confirm which date government will set for a second licensing round, and this is because we are not yet done with the first licensing round.
“The first licensing round will be done by the end of this year, and until we are done with that, we can’t commence a second one.
“Because there are still some oil companies whose contract period have expired and those who didn’t develop the oil blocks allocated to them and goverment has written to them and taken back the blocks.
“So there are a number things we need to look at and know the number of blocks that will be available for the second licensing round before we begin it, so like I said for now I can’t give a definite date for now,” he stated.
Meanwhile, the Civil Society Bid and Licensing Round Monitoring Group – an alliance CSOs working on extractives, anti-corruption and good governance – is advocating for the disclosure of beneficial owners of oil companies involved in the country’s competitive oil bidding and licensing process.
According to the Group, the disclosure of beneficial ownership in the licensing period particularly during the pre-qualification stage will allow for citizens to monitor the bidding process and to identify politically exposed persons in the contract process.
The call by the Group forms part of its recommendations to government contained in a report on the country’s first-ever oil bidding and licensing round which took place in 2018 and through 2019 to 2020, leading to the award of blocks and commencement of negotiations for the grant of petroleum agreements to successful bidders in 2019/2020
The recommendations made by the group in the report include;
- Government must start issuing reconnaissance licences to gather quality data to aid future bidding rounds. The cost for such an activity will be recovered from data fees during competitive tendering. Liberia used this approach to acquire data which enabled them to carry out competitive tendering.
- Government must publish disaggregated information on bidders and the respective blocks they are prequalified for.
- Government must ensure that direct negotiations are done only where peculiarities that point to a special company to optimise their sources are established.
- Government must make deliberate efforts to engage the public beyond the requirement of the law. It is recommended that such engagements must have feedback systems to encourage citizens to share information that might be relevant for the licensing round and by extension,the national interest.
