Government has allocated two oil blocks, after the evaluation of bids received on May 21, 2019 for Blocks GH_WB_02 and GH_WB_03.
This is according to an announcement made yesterday on Ghana’s first licensing round, pursuant to regulations 18 of the Petroleum (Exploration and Production) General Regulation, 2018, L.I. 2359.
In accordance with Ghana’s local content and participation regulations, which require that international oil companies partner local counterparts who must have at least five percent equity stakes in exploration and subsequent production blocks, First Exploration and Petroleum Development Company Limited in partnership with Elandel Energy (Ghana) Limited has been allocated the block GH_WB_02. Similarly, ENI Ghana Exploration and Production Limited in partnership with Vitol Upstream Tano Limited emerged winners of block GH_WB_03.
Government has invited the winners for a further negotiation on the detailed terms of the Petroleum Agreement pursuant to Regulation 18, for the two blocks, which have been awarded based on government’s assessment of the competence and proven track records of the bidders.
First Exploration is a Nigerian company which began operations in 2012. It has since won exploration bids for two blocks in that country, and subsequently has been granted operatorship. It has secured financing from Schlumberger and is now working on a development plan, having completed full seismic studies. Its joint venture with the Dangote Group, West African Exploration and Production Company is also developing a re-entry plan for two other blocks in Nigeria.
ENI Ghana is the operator of the Sankofa Gye Nyame oil and gas field off shore of western Ghana, which commenced production in July 2017 and possesses by far the largest natural gas resources available to the country.
Next year, government will engage in a second round of licensing, where the other three blocks are expected to be auctioned through competitive tendering.
The process for selecting and awarding companies to explore for oil within Ghana’s jurisdiction was designed to ensure transparency and fairness. However, some critics argue that the Minister of Energy still has too much discretionary powers in the award of blocks, a situation which has generated controversy as to the terms of an exploration license granted in the recent past.
Background
On October 15, 2018, government launched country’s maiden oil and gas licensing round, with six blocks, all in Tano /Cape Three Points (Western Basin) being placed on offer.
Three blocks are being offered through competitive tendering, and a block has been allocated to the National Oil Company (GNPC). The other two blocks, the winners of which have just been announced, were set aside for direct negotiation with competent companies with a proven track record of work in ultra-deep waters.
As at December 21, 2018, sixty applications had been submitted for pre-qualification. These companies include Tullow Oil, Total, ENI, Cairn, Harmony Oil and Gas Corporation, ExxonMobil, CNOOC , Qatar Petroleum, BP, Vitol , Global Petroleum Group, Aker Energy, First E&P, Kosmos, Sasol and Equinor
