Only companies with financial muzzles will be awarded oil blocks-Dr Amin Adam

The Deputy Minister for Energy in-charge of Petroleum Dr. Mohammed Amin Adam, has given assurance that the Ministry would do due diligence in awarding of new oil blocks, by making sure that only companies that have the capacity and financial muscles are awarded with contracts.

According to him, the current administration would not want to repeat the mistakes that occurred in the past, when the Ministry awarded oil blocks to prospective investors.

He said during the previous administration, oil blocks were awarded to companies that lacked capacity and financial wherewithal to develop the blocks and, thus, ended up denying the country revenues it should have generated from those blocks.

" I can tell you that between 2013 and 2016, the companies that were given oil blocks were supposed to have spent US$980million in meeting their obligations.

"As I speak to you, they have only spent US$92million. It means that there were companies that were not evaluated properly. If they were evaluated properly, you would have known that they did not have the money. They did not have the capacity to be able to undertake oil activity in Ghana. But those were the companies that were given the oil blocks. And so, we have to learn by that painful experience," he stated.

Speaking in an interview on the sidelines of the 4th Africa Oil Governance Summit in Accra, and organised by the Africa Centre for Energy Policy (ACEP), Dr. Amin Adam said: "This is why our focus is on pre-qualifying companies that have the wherewithal to participate in the industry. After the pre-qualification, we will then open for them to formally tender."

The pre-qualification process, Dr. Amin Adam explained, would enable the Ministry to assess the competence, track records and financial strength of each company of the companies that are bidding for the oil blocks.

Asked whether companies are showing interest in bidding for the blocks following the launch of the maiden licensing round bid in October, Dr Mohammed Amin Adam said, "Companies have been talking to us. I can tell you that the interest is very high."

Although, Dr Amin Adam could not immediately disclose the number of companies which have expressed interest in the oil blocks, he noted that the interest so far is very encouraging.

He assured that there would be fairness and transparency as far as awarding of oil contracts are concerned.

"We want to make sure that there is fairness and transparency in the process. There will be no backdoor process in awarding the oil blocks," he assured.