It’s an indictment on the Energy Ministry, the suggestion by Deputy Energy Minister that the lack of comprehensive data and small size of oil blocks accounts for the low interest of investors in the maiden licensing bid for the six oil blocks, Chairman of the Public Interest Accountability Committee (PIAC), Dr. Steve Manteaw has stated.
In October last year, government allocated six oil blocks for exploration and possible production.
In the process, sixteen oil and gas firms were initially selected early in 2019 for the final stage of the Oil Licensing Round.
Three of the oil blocks-two, three and four were to go through competitive bidding processes; two blocks-five and six – were supposed to begin direct negotiations; while block one, was reserved for the Ghana National Petroleum Corporation.
Out of 15 multinational oil companies that bidded for the blocks. Some of them however unexpectedly pulled out of the process at the last minute.
Touching on the low interest of investors in the maiden bidding process, Deputy Minister for Energy (Petroleum) Dr. Mohammed Amin Adam had earlier noted that the development was resultant of incomprehensive data and small size of oil blocks.
He further noted that the size of the acreage was relatively too small for most of the companies compared to that of other oil-rich countries they get offers from.
Dr. Manteaw however, speaking at the launch of the “Civil Society Scorecard Report on Ghana’s First Upstream Oil and Gas Licensing Round” argued, that the Minister’s reasons merely exposes the low quality of work done ahead of the bidding round.
It also shows, according to the PIAC Chair, the fact that the Ministry barely “even evaluated the prospects of the data they said they had before deciding to go out there to look for companies to come and bid for our oil blocks.”
Dr. Manteaw further indicated that most of these companies that withdrew from the bidding process have opted for direct negotiations where interested investors have upfront talks with the sector Ministry and the Bid and Licensing Round Committee.
For him, the reason companies may be more interested in direct negotiation rather than the process is that, “in direct negotiations, they have the leverage to ensure that they get favourable terms” be it legitimate or illegitimate.
“So question is if the quality of data was that poor to dissuade them from entering into the competitive process, how has the quality improved to generate interest in direct negotiations.” He asked rhetorically.
While urging government to invest in data, the Accountability lead activist said he does not suspect any foul play but is only outlining the stated issues as red flags to prevent any seemingly political intervention.
The launch of the Civil Society Scorecard Report on Ghana’s First Upstream Oil and Gas Licensing Round came off Wednesday July 17 at the Golden Tulip Hotel in Accra.
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