Govt to open bidding for new oil blocks

The government will soon announce the opening of a competitive bidding for the allocation of new oil blocks in October this year.

The new approach, according to the Deputy Minister of Energy in-charge of Power, Mr William Aidoo, is in line with the new Oil Exploration and Production Law, Act 919, which mandates government to only engage in negotiations for oil blocks through competitive bidding.

Before the introduction of the law, successive governments held discussions with the international oil companies that showed interest in the oil sector and the Ghana National Petroleum Corporation (GNPC) providing further information to the companies on existing oil blocks.

Following their own assessments and analysis, the companies return to the government for formal negotiations if a particular block meets their interests.

Speaking at the opening ceremony of a Regional Energy Co-operation Summit in Accra yesterday, Mr Aidoo said the introduction of the open and competitive bidding approach would pave way for companies to express interest leading to bidding and award of new oil and gas blocks.

To ensure an effective and efficient process, he noted that workshops have been held for members of the Licensing Round, Bid Evaluation and Negotiations (LRBEN) Committee, which was inaugurated recently.

With the potential to supply about 450 million standard cubic feet of gas, he said government was focused on gas-to-power investments with the development of low pressure distribution networks to provide gas to more industrial customers and export the surplus, the Deputy Minister added.

As part of the investments in the sector, Mr Aidoo said gas infrastructure and processing plant was in place for the Jubilee and TEN gas fields whilst gas from the Sankofa fields was set for production with over one trillion cubic feet of non-associated gas.

Further to this, he stated that exploration activities were ongoing to secure more gas finds especially onshore in the Volta Basin which could unlock the development of a petrochemical industry and other power and gas processing facilities.

He said government would ensure that the entire value chain was robust to be able to monetise domestic gas to meet the energy needs of the country and the sub-region adding that prospective Independent Power Producers (IPPs) were being engaged to off take the Offshore Cape Three Point (OCTP) gas and sign the gas sales agreements with the IPPs based on take or pay obligation.

The Deputy Minister said government had taken steps to issue a bond to deal with the legacy debt of about US$2.4 billion in the energy sector to put sector agencies on sustainable path to support economic growth.

As part of efforts to address challenges confronting the power sector, he stated that government reduced some levies and taxes, reviewed power purchase agreements entered into by the previous government; intensified enforcement of procurement laws in power capacity procurement to ensure a reduction in the cost of power projects, amongst others.

Mr Samuel Boakye-Appiah, Managing Director of the Electricity Company of Ghana (ECG), allayed the fears of the public regarding the status of ECG following the private sector participation in the company to invest, operate and manage it for 20 years as a concessionaire.

As defined in the transaction agreements, he said the ECG would become a bulk energy trader, asset owner and provide training services through its Training Centre to equip distribution utilities in the country.

With the period of the concession, Mr Boakye-Appiah said no ECG staff would be laid-off as agreed in the transaction and that 51 per cent of local Ghanaian equity participation in line with government’s local content policy.

By Claude Nyarko Adams

Print Friendly

Leave a Comment