Work on onshore oil regulatory framework begins

Government, through the Ministry of Energy and key partners in the oil and gas industry have begun working on a legislative framework to guide the development of onshore exploration activities in the sector.

This follows the completion of data processing by the Ghana National Petroleum Corporation’s (GNPC) 2D seismic survey of the Voltaian Basin which indicate the prospects of oil and gas in commercial quantity. Indeed, both government and GNPC itself are on the brink of announcing a timetable for development of the area, but first, a regulatory framework has to be put in place.

Already, six exploration blocks have been delineated in the Voltaian Basin. However, two of the six blocks so far delineated are being reserved for exploration by the state owned Ghana National Petroleum Corporation which aims to engage in exploration activities in collaboration with an established international oil firm with a view to acquiring the requisite expertise and experience to evolve into a major upstream operator itself over the coming few years.

The Corporation’s 2D seismic survey of the Voltaian Basin, was started in 2018. Indeed, exploration of the Voltaian Basin has assumed the status of GNPC’s flagship project and it has scheduled the drilling of two conventional exploratory wells for 2020. It is expected that this will be accompanied at the same time by the commencement of the bidding process for the other four blocks which will be open to bids from both foreign and local private exploration and production companies.

However, this being an entirely new area of activity to be regulated by the State in Ghana, the regulatory framework is having to be established right from the ground up. Importantly, unlike with the offshore oil and gas activities that have dominated Ghana’s hydrocarbons industry so far, onshore exploration and production will directly displace host communities and their socio-economic activities, creating the potential for major civil unrest such as what has happened in neighbouring Nigeria, if the situation is not well managed.

In view of this, the ministry has indicated its readiness to partner the Ghana Chamber of Mines, which according to the Deputy Minister of Energy, Dr. Mohammed Amin Adam, has the experience, technical knowhow and the wherewithal regarding onshore exploration activities to make effective inputs into the policy framework.

Even though the kind of exploration activities in the two sectors – that is, oil and gas and solid mineral mining – are quite different, government reckons that getting some important inputs from the Chamber of Mines is expected to bring to bear its experience in dealing with the inevitable problems that will arise in the interface with host communities. It is also looking to leverage on the Chamber’s perspectives on certain aspects of the requisite fiscal regime for on-shore exploration and production of oil and gas.

Speaking during a local content workshop organized by the Ghana Chamber of Mines held in Accra last Tuesday, the Deputy Minister of Energy, Dr. Mohammed Amin Adam said since activities in the Voltaian basin have been scaled up, it is imperative to institute effective and efficient legislation to guide the process.

“I will come to you [the Chamber] on how we can have a masterpiece of legislation that addresses the concerns of the communities and also provides that opportunity and platform for companies and investors for investment”, he added.