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10 IOC’s opt for direct negotiations of blocks 5&6

  • SOURCE: Goldstreet Business | Goldstreet Business
  • Ten International Oil Companies (IOC’s) that had been part of the initial competitive bidding process have expressed interest in direct negotiations instead, which are to be used to decide who are allocated blocks five and six.

    This was revealed by a member of the Bid and Licensing Round Committee, Mr. Callistus Nero, at the launch of the report on the Pre-Qualification Stage, in Accra, on Wednesday.

    Mr. Nero said, “10 companies that were in the initial competitive rounds have expressed interest in the direct bidding process, and we have written to them to submit proposals.”

    “However not all have submitted the proposals yet,” he added.

    As it stands now, the names of these 10 IOC’s that have expressed interest in the direct negotiations have not been made public.

    The original pool of companies that put in bids for the three oil blocks on the basis of competitive bidding includes China National Offshore Oil Corporation, Cairn Energy, Qatar Petroleum, Global Petroleum Group, First E&P, Sasol, Equinor and Harmony Oil and Gas Corporation. The rest include ExxonMobil, British Petroleum, Tullow Ghana Limited, Total, ENI Ghana, Vitol, Kosmos Energy and Aker Energy.

    Three (3) of the blocks (GH_WB_02, GH_WB_03 and GH_WB_04) will be awarded through an open and competitive bidding process which is the default process in line with Section 10(3) of Act 919.

    Two (2) blocks namely GH_WB_05 and GH_WB_06 will be awarded through direct negotiations in line with Section 10(9) of the same law while GH_WB_01 has been allocated to GNPC in accordance with Section 7(9) of the E&P law to explore on a sole risk basis or in partnership with a strategic partner “with a view to developing its technical capacity and becoming an operator.

    Earlier this week, the Energy Ministry cited the lack comprehensive data and small size of oil blocks as reasons for the low interest expressed by investors in the maiden licensing bid for the six oil blocks.

    Deputy Minister for Energy (Petroleum) Dr. Mohammed Amin Adam explained that the government has done its assessment on the responses it received from the companies and has taken steps to address them.

    One of the issues that emerged was that, the current data on those blocks was not comprehensive enough and therefore they didn’t have enough data to enable them to make commercial decisions.

    The second issue that came up was the size of the acreage, which they indicated was too small compared to the offers they get from other oil-rich countries.

    With these issues, government is expected to take key decisions after discussions with stakeholders and consultants to decide whether to revise the size of the blocks for future bidding rounds to make Ghana’s upstream sector more competitive. It will also strive to improve the data being made available to bidders.

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