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Tue, Nov

AKUFO-ADDO CALLS FOR TRANSPARENCY…IN OIL BLOCK BIDDING PROCESS

Business & Economy

The Ministry of Energy, Petroleum Commission, Ghana National Petroleum Corporation (GNPC) and the Licensing Rounds Committee have been charged by President Nana Addo Dankwa Akufo-Addo to show transparency and efficiency in their activities under Ghana’s maiden oil and gas licensing round.

The Ministry of Energy, Petroleum Commission, Ghana National Petroleum Corporation (GNPC) and the Licensing Rounds Committee have been charged by President Nana Addo Dankwa Akufo-Addo to show transparency and efficiency in their activities under Ghana’s maiden oil and gas licensing round.

 

Speaking yesterday at the launch of the Ghana Oil and Gas Licensing Round 2018, which will allocate new petroleum exploration rights, the President noted that the government was walking the talk as promised in its 2016 manifesto, where the New Patriotic Party pledged to improve transparency in the management of Ghana’s oil and gas resources.

“It is thus an honour for me to be able, today, to implement this important commitment by launching this maiden bidding round,” the President declared.

Opportunities

President Akufo-Addo noted that after the last oil discovery, and the last exploration well drilled in 2014, the pace of oil exploration in Ghana had slowed considerably.
“Given that production is taking place at a faster rate than reserves are being added, we need to reverse this state of affairs immediately, especially in today’s oil-market environment, where crude oil prices are in the US$70 to $80 per barrel range,” he said.

The President added that with the resolution last year of the maritime boundary dispute with Côte d’Ivoire, and the prevailing transparent regime for allocating petroleum rights, many opportunities exist for Ghana to reverse the slow pace of oil exploration.

Voltaian Basin

GNPC is making great progress in its efforts to tap oil and gas deposits onshore in the Voltaian Basin.

The President said that, should these exploration efforts be successful, opportunities for partnership with the private sector will open up to develop any reserves accumulated in the basin.

“This will not only have a positive impact on our oil production profile and on the revenues to the state, but also provide an opportunity to develop a new economic growth pole in northern Ghana when production of oil commences,” he said.

The President has also directed the Ministries of Energy and Finance and the Ministry of Environment, Science, Technology and Innovation to draft and present to Parliament regulations on dealing with the adverse effects of oil exploration in the Voltaian Basin.

He further said that the regulations should study onshore oil and gas development and revenue distribution to proactively address any potential contestations which may arise in communities in the exploration area over the course of time. This will help minimise risks to future investments in the area, he said, and help improve Ghana’s investment climate.

Termination risk

To accelerate exploration activity, President Akufo-Addo tasked the Ministry of Energy with reviewing critically existing operations, with a view to determining which oilfields are suboptimal.

The review also covers petroleum agreements which are dormant.

“The Ministry of Energy will engage with the operators after the review on the adoption of best methods for increasing the oil recovery rate,” the President said.

“For petroleum agreements which are dormant, the Ministry will encourage the operators to consider inviting stronger partners to join them or risk the termination of these petroleum agreements, should they persist in failing to meet their minimum work obligations,” he said.

Increased revenue

In seeking to increase revenue from Ghana’s oil reserves and improve on oil and gas production, cabinet is expected soon to approve a “Blueprint and Roadmap for Accelerated Oil and Gas Exploration and Development”, which is based on a new strategy of aggressive exploration.

“The strategy seeks to build synergies with the domestic downstream petroleum sector; to increase Ghanaian participation in the oil industry; and to accelerate the pace of institutional capacity development to manage our oil and gas resources efficiently,” President Akufo-Addo said.

Emphasising again that the oil and gas industry, which is international in nature, requires enforcement of stringent international standards in all aspects of the value chain, the President demanded that any person or company aspiring to participate in the industry must be abreast of these requirements.

“The government will, on its part, continue to prioritise the development of skills of our youth and the Ghanaian entrepreneur through the AOGC [Accelerated Oil and Gas Capacity] programme, so they can meet international standards, and thereby become more competitive in the industry. My hope is that more Ghanaian companies will participate in the bidding process,” he said.

The President commended the Minister for Energy, John Peter Amewu, and his immediate predecessor, Boakye Agyarko, and their teams for working assiduously to make this important process operational, as set out in the Petroleum (Exploration and Production) Act 2016 (Act 919).

Transparent

With rising oil prices and increased deep-water activity globally, Ghana’s decision to open itself to a more rigorous and transparent award process once again means that the country is well positioned to attract petrodollars.

Ultimately, although the increased activity is welcome, in the risky business of oil and gas exploration only time and the drill bit will tell if the efforts and capital will lead to discoveries and increased oil production, along with a boost to the local economy.

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