Despite winning the bid to explore oil in block 3, of the Deep Tano Basin, petroleum companies ENI and Vitol would still have to meet other regulatory requirements before they can sign a contract with the government to begin operations.
The Energy Ministry which revealed this to Citi Business News said it is currently in negotiations with the companies over some regulatory requirements that were not captured in the bidding process.
The two companies have been awarded the rights to explore oil on one of the blocks put up for the first bidding round by the Energy Ministry while the winners of the two remaining blocks, also up for bidding, are yet to be announced.
While explaining why ENI and Vitol were selected winners of block 3, Deputy Energy Minister, Mohammed Amin Adam said the companies would have to meet other regulatory requirements before a petroleum agreement would be signed.
The Deputy Minister stated that the biddable items included a good programme.
“By well programme, we mean how many wells do they want to drill within what time, what amount of seismic data do they want to acquire. We also have physicals such as royalties they have to pay, corporate taxes, free carried interest — the law puts it at 15%, but if a bidder will give more we will consider that in the evaluations.
Then the third factor is local content — to train more Ghanaians and to add value. So, these are the items that we consider in selecting the winner. Of course, ENI is considered the more responsive bid and the government is going to negotiate with them on those areas that are negotiable.
You know, you bid certain areas and there are other areas to be negotiated. When we negotiate with them and we are all satisfied with the outcome, we go ahead and sign the petroleum agreement,” he added.