Ghana to undertake first bidding in oil industry

Boakye Agyarko, Minister of Energy

A Licensing Rounds Bid, Evaluation and Negotiation (LRBEN) committee that will undertake Ghana’s first bidding rounds has been established by the Ministry of Energy, MoE, in a bid to streamline the system

The licensing rounds will focus on the Western Offshore Basin where there is an existing infrastructure that could facilitate the development of any discovery made in the area.

“These assets will ensure the quick development of hydrocarbons, maximizing value and minimizing cost. The overall effect is increased revenue to the state and development benefits to the people,” according to the Minister of Energy, Boakye Agyarko.
“At the same time, exploration activity has slowed down since the dawn of the low-price era in 2014 to be compounded by the boundary dispute between Ghana and La Cote d’Ivoire. In fact, the last time an exploration well was drilled was in 2014,” he noted.
He further explained that a regulatory framework developed to govern the increasing process submitted to the Attorney General’s Department for drafting would soon be laid in Parliament to mature into a legislative instrument.
“The Ghana Model Petroleum Agreement is being reviewed to align it with the Petroleum Exploration and Production Act (Act 919) and new regulations,” he said.
“Government is also developing for the first time, a model joint operating agreement, to guide investors on the acceptable norms for joint ventures. A Geology and Geophysics Committee which I established recently has successfully mapped out prospects in the Western shore for demarcation into nine (9) blocks which will form the basis of our upcoming licensing rounds” he explained.
“Three of the blocks shall be allocated through open public competitive tender, whilst two of the blocks shall be allocated through direct negotiations, whereas one of the blocks will be reserved for GNPC to explore in partnership with its chosen strategic partner with the view to develop its technical capacity.
“The remaining three will not be allocated this year, but will form the basis of our second bidding rounds next year,” he said.
The terms of reference for the committee, according to Mr. Agyarko will be to “Prepare all the necessary documentation for a successful bid round, access and package all the data on these acreages, set up online data room where all the data can be accessed by prospective bidders and embark on promotions and roadshows in collaboration with the petroleum commission.

“The committee is expected to invite bids from prospective applicants, carry out pre-qualification of applicants in line with applicable regulations, evaluate qualified bids and select winners in line with transparent criteria and negotiate with the winners and provide recommendations to the minister for signing petroleum agreements.”

In order to discharge the task assigned to the committee, members would be grouped into three sub-committees – Technical, Commercial and Legal – with a coordinator for their activities.

By Adu Koranteng