COMMITTEE TO OVERSEE ALLOCATION OF OIL BLOCKS INAUGURATED
A Committee to oversee the allocation of oil blocks to local and international companies through proper evaluation and negotiation has been inaugurated by the Ministry of Energy.
The Committee known as the Licensing Bid Rounds and Negotiation (LBRN) Committee is made up of 23 members, drawn from the Ministry of Energy, Ghana National Petroleum Corporation (GNPC), Environmental Protection Agency (EPA), Ghana Revenue Authority (GRA), Ministry of Finance, Attorney-General’s Department, Petroleum Commission and the Ghana Maritime Authority.
The setting up of the Committee is in line with preparation for the allocation of oil blocks in accordance with the Petroleum Exploration and Production Act (Act 919).
Nine oil blocks had been mapped out in the Western Basin for allocation to companies interested in oil exploration. Out of the nine blocks, six would be allocated between 2018 and 2019 while the remaining three would form the basis for a second bidding round.
Three blocks would be allocated through open competitive tender; two would be given through direct negotiations, while one would be reserved for the national oil company, Ghana National Petroleum Corporation (GNPC). GNPC is expected to explore its block in partnership with a chosen strategic partner with the view to develop its technical capacity to become an operator.
This year’s Licensing Rounds will focus on the Western Basin because of the existence of infrastructure, including two gas pipelines to the shore, three production facilities (FPSOs) with a fourth FPSO in the offing by 2021. These assets could facilitate the development of any discovery made in the area and ensure a quick development of hydrocarbons, maximizing value and minimizing cost. The overall effect is increased revenue to the state and development benefits to the people of Ghana.
Terms of Reference for the Licensing Bid Rounds and Negotiation Committee
The Committee is to prepare all the necessary documentation for a successful bid round, access and package all data on the nominated acreages and set up an online data room where all the data could be accessed by prospective bidders.
It is also to run promotions and road shows in collaboration with the Petroleum Commission; invite bids from prospective applicants in line with the applicable Regulations, evaluate qualified bids and select winners in line with transparent criteria. It will also negotiate with the winners and provide recommendations to the Minister which may ultimately lead to the execution of a Petroleum Agreement.
The Committee has been tasked to complete all preparatory works by August 2018 and start invitation of prospective bidders between November and December 2018. It is expected that by the end of July 2019, oil blocks will be awarded to bidders.
The Terms of Reference for the Committee are as follows:
Prepare all the necessary documentation for a successful bid round;
Access and package all the data on nominated acreages;
Set up online data room where all the data can be accessed by prospective bidders;
Embark on promotions and roadshows in collaboration with the Petroleum Commission;
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 a transparent criteria;
Negotiate with the winners and provide recommendations to the Minister for the execution of Petroleum Agreements.