Petroleum Agreements for bid winners ready by December – Min of Energy
Adnan Adams Mohammed The government has given resounding assurance that, before Parliament goes on recession this year, the Petroleum Agreements (PAs) for the two companies that won oil blocks through the competitive bidding process which started some three years ago, in 2018 would be ready. In July 2019, the government announced First Exploration and Petroleum Development Company partnered by Elandel Energy Ghana Limited and Eni Ghana Exploration and Production Limited partnered by Vitol Upstream Tano Limited as the winners of the GH-WB-02 and GH-WB-03 oil blocks offshore Western Ghana. Although the government has continued negotiations with the bid winners for the award of petroleum agreements in respect of the respective blocks won, supply side accountability on the negotiation processes as well as on other evolving licensing and contracting issues has been weak at best, due partly to COVID-19 and related reasons. With new developments around upstream oil licensing, such as, the Ghana National Petroleum Corporations (GNPC) proposal to purchase additional stakes in some oil blocks, and the COVID-19 situation gradually easing, demand side accountability on the licensing/contracting and negotiation processes is increasingly on the radar of both civil society and government actors. It is in this light that, the Alliance of CSOs Working on Extractives, Anti-Corruption and Good Governance considers it expedient to convene a roundtable to review the licensing round processes, examine the findings of the country’s First Oil Licensing Round Monitoring Report and update stakeholders on the negotiation and other outstanding processes. “As it is now, everything has been concluded technically but we yet to sign the Petroleum Agreements (PAs) that we have all agreed. Take to cabinet for approval, then take to parliament for ratification to the make document legal and binding”, Benjamin K. Asante, Director of Petroleum at the Ministry of Energy said, last week, during the roundtable discussion in Accra. “We hope before parliament goes on recession in December, the PAs would have been ratified.” He explained that, “Delays in the negotiation and award of blocks stage have been surmounted. Due to COVID-19 we couldn’t continue meeting the companies . Companies were not allowed to travel and also virtual meetings were not too effective. But now we have come back. We have concluded all the issues in the negotiation and I can tell you, we are now turning leaves, page by page, to see if everything is intact.” Ghana’s upstream oil and gas sector plays an important role in the national development agenda and as part of measures to improve good governance in the upstream oil and gas sector, Ghana enacted the Petroleum (Exploration and Production) Act, 2016 (Act 919) to replace Petroleum (Exploration and production) Act, 1984 (PNDCL 84) which had been in operation for over three decades. An important progressive governance provision introduced by Act 919 is the default requirement for a competitive oil bid and licensing round comparative to the sole requirement of direct negotiation contained in PNDCL 84. To give meaning to this new requirement, the Government of Ghana (GoG) successfully launched the country’s first ever oil bid and licensing round in 2018 through 2019, leading to the award of blocks and commencement of negotiations for the grant of petroleum agreements to successful bidders in 2019/2020. To support government efforts and enhance transparency in the competitive licensing process, the Natural Resource Governance Institute (NRGI) in 2018 convened and coordinated a group of national civil society organizations, the Civil Society Bid and Licensing Round Monitoring Group, to monitor and evaluate the country’s first competitive oil licensing process. The resultant report published in 2020 highlights the successes, challenges and recommendations for improving competitive licensing round and contract negotiation processes in the future. Meanwhile, a key figure on the Bidding Committee representing the CSOs, Benjamin Boakye, Executive Director of ACEP in his concluding remarks at roundtable discussion noted that, the CSOs hope to enhance their influence and demand side accountability generally in future licensing processes. The roundtable brought together members of the Alliance of CSOs working on Extractives, AntiCorruption and Good Governance, government actors and other oil governance stakeholders in Ghana, including the petroleum upstream chamber, policy think tanks, development partners, donor agencies and the media.