Press Release By Energy Minister On The Oil And Gas Licensing Round

"Introduction

Good morning Ladies and Gentlemen of the press and Happy New Year to you all. I wish all Ghanaians Great Health, Long Life and Prosperity in 2019.

We have gathered here this morning for this press conference to inform the good people of this country about the stage we have reached in Ghana’s maiden Oil and Gas Licensing Round. This gathering also signifies the delivery of yet another promise by the NPP government to enhance transparency in the Oil and Gas Sector.

Objective of the Licensing Round
Ladies and Gentlemen, in line with government’s policy to deepen transparency in the management of Ghana’s petroleum resources and also to give practical meaning to Section 10 of the new Petroleum (Exploration and Production) Act, 2016 Act 919, the Ministry of Energy inaugurated the Licensing Round Bid Evaluation and Negotiation (LRBEN) Committee for the first ever oil and gas licensing round for six Offshore Oil Blocks in Cape Three Points in the Western Region.

Subsequently, His Excellency, the President, Nana Addo Dankwa Akufo-Addo launched the 1st Oil and Gas Licensing Round on October 15, 2018. The competitive tender process is the first ever since the discovery of oil in Ghana. The new process aims at ensuring transparency, value for money and getting companies with the requisite financial and technical expertise to exploit the Oil and Gas resource. 

Current Status
The Licensing Round Bid Evaluation and Negotiation (LRBEN) Committee sent out invitations for expression of interest and pre-qualification in October 2018 for five blocks (Blocks 2, 3, 4, 5 and 6) - three blocks on tender and two for direct negotiation. The first block is reserved for GNPC (Block 1).

Ladies and Gentlemen, prospective bidders submitted their applications on the 20th of December, 2018. Announcement of pre-qualified applicants and publication of invitation of prequalified applicants to tender will be on the 21st January, 2019 and deadline for the submission of bids will be on 21st May, 2019. The blocks are expected to be awarded to successful bidders in August 2019.

Ladies and Gentlemen, one may ask “how did we get here”?

Processes Undertaken
Let me use this opportunity to enumerate the steps we undertook prior to this stage:

Various stakeholder engagements including workshops with Civil Society Organizations (CSOs) and Indigenous Ghanaian Companies (ICGs) took place prior to the launch to create the necessary awareness about this unique event in our oil and gas industry and to encourage local participation.

The National Resource Governance Institute (NRGI) workshop took place from 3rd to 5th July 2018 at Peduase Valley Resort, and in attendance were Civil Society Organizations amomgst others. The objective of this workshop was to inform the public about the licensing round processes and seek the input and feedback from the Civil Society Organizations on the draft upstream petroleum strategy.

Similarly, the Indigenous Ghanaian Companies workshop was held on 7th September 2018 at the Labadi Beach Hotel. The aim was to inform them about the 5% equity participation expected of Indigenous Ghanaian Companies in each Petroleum Agreement (PA) and to encourage them to participate in the licensing round.

On the global level, and as part of our efforts to have a successful licensing round, we took advantage of the Africa Oil Week Conference in South Africa from 5th – 9th November 2018 to launch the Licensing Round internationally for the first time in the country’s history. The Ghana session attracted scores of stakeholders in the oil and gas industry and our event was over-subscribed. 
Our participation in this conference also provided an opportunity for most of the oil companies, who had submitted pre-qualification applications, to view data and have their concerns regarding the Licensing Round addressed. I must say that the international launch was a huge success.

Evaluation of Expression of Interest
Ladies and Gentlemen, on the 21st of December 2018, the applications were opened by the Honourable Deputy Minister for Energy in charge of Petroleum in the presence of some staff of the Ministry, the Petroleum Commission and the Ghana Oil and Gas for Inclusive Growth (GOGIG).

In summary,
Sixty (60) applications were received from sixteen (16) companies.
58 applications were VALID. Out of this 74% (43) were interested in competitive bidding and 26% (15) were for Direct Negotiation
Two (2) other applications for Block 1 were invalidated. This is because this block has been reserved for the Ghana National Petroleum Corporation (GNPC). The two companies that have expressed interest in Block 1 may have to hold discussions with GNPC for possible partnership opportunities.

The companies that expressed interest and submitted pre-qualification applications are:


ExxonMobil
British Petroleum
Tullow Ghana Limited
Total
ENI Ghana
Vitol
Kosmos Energy
Aker Energy

China National Offshore Oil Corporation (CNOOC)
Cairn Energy
Qatar Petroleum
Global Petroleum Group
First E&P
Sasol
Equinor and
Harmony Oil and Gas Corporation

Confidence in Ghanaian Economy
Ladies and Gentlemen, the interest expressed by some of the major players in the oil and gas sector worldwide in this licensing round speaks volumes about the confidence the global community reposes in our economy.

This gives credence to His Excellency, President, Nana Addo Dankwa Akufo-Addo’s effort to uphold good governance and transparency in the administration of this great country and the management of our natural resources.

We wish to assure all of you that we shall remain diligent in this premier licensing round and even make the subsequent ones better.

Local Content Benefits
Ladies and Gentlemen, kindly note that for each winning bid, there shall be a 5% equity participation expected of Indigenous Ghanaian Companies in each Petroleum Agreement (PA).

Local Ghanaian Companies, I am therefore encouraging you to prepare yourselves adequately to take advantage of this opportunity.

Ladies and Gentlemen, this is consistent with His Excellency, President, Nana Addo Dankwa Akufo-Addo’s vision for increased local participation in the Oil and Gas Sector.

Next Steps
A team is currently evaluating the pre-qualification applications and by the end of this month, the list of pre-qualified companies will be published. Simultaneously, the pre-qualified companies will be invited to submit bids for the blocks for which they have been pre-qualified.

Ladies and gentlemen, kindly be informed that the modalities for direct negotiations will be communicated in due course.

Conclusion
At this juncture, I want to congratulate all the hardworking men and women in the oil and gas industry for their various contributions.

I take this opportunity to commend members of the Licensing Round Bid Evaluation and Negotiation Committee, led by my able Chief Director (Chairman), and my Deputy Ministers, for the leadership they have provided towards a successful management of the first stage of the licensing process. I wish to encourage them to continue working hard in order to completely fulfil the mandate entrusted to us.

Finally, I am confident that the Nana Addo Dankwa Akuffo-Addo – led administration will deliver a very successful licensing round for the GOOD PEOPLE OF THIS COUNTRY.
Thank you very much for your attention. Once again, I wish you all a happy and prosperous new year".

MAY GOD BLESS US ALL!!