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President Nana Addo Dankwa Akufo-Addo Monday, unveiled Ghana's first ever Oil and Gas Competitive Licensing Round Bid Evaluation and Negotiation (LRBEN) in Accra.


Ghana's Oil Exploration and Production Act, (Act 919 –2016) stipulates that, the allocation of a new exploration rights to perspective investors, should be done through an open, fair, transparent and public bidding process.


In all, six (6) Oil blocks are available for bidding and allocation. It is expected that interested investors go through the bidding process to be allocated the right to exploit the country's oil blocks.


This competitive bidding process, forms part of a series of future oil and gas licensing rounds initiated by the government to exploit the country’s oil blocks to reach the estimated production of 100 million barrels of crude oil per day.


Revenues expected from these oil explorations will be used judiciously to finance key sectors of the economy - Education, Agriculture, infrastructure etc.


Delivery the keynote address, President Akufo-Addo charged the Ministry of Energy, the Petroleum Commission, Ghana National Petroleum Corporation (GNPC) and the Licensing Rounds Committee to co-operate and ensure that activities under the maiden oil and gas licensing round were carried out in a transparent and efficient manner.


President Akufo-Addo said since the last oil discovery, and the last exploration well drilled in 2014, the pace of oil exploration in the country has slowed considerably.


“Given that production is taking place at a faster rate than reserves are being added, we need to reverse this state of affairs immediately, especially in today’s oil market environment, where crude oil prices are in the US$70 – US$80 per barrel range,” he said.


With the resolution of the maritime boundary dispute with Cote d’Ivoire, and the prevailing transparent regime for allocating petroleum rights, President Akufo-Addo remained upbeat about the many opportunities that existed for the country to reverse the slow pace of oil exploration.


Commenting on oil discovery in the voltaian basin, the President said, “Should these efforts prove successful, we are going to offer opportunities for partnership with the private sector to develop any reserves accumulated in the basin. This will not only have a positive impact on our oil production profile and on the revenues to the state, but also provide an opportunity to develop a new economic growth pole in northern Ghana when production of oil commences.”


The President directed the Ministries of Energy, Finance and Environment, Science Technology and Innovation to draft and present to Parliament regulations on dealing with the adverse effects of the efforts at discovering oil in the Voltaian basin.


Additionally, the regulations, he said, should also address onshore oil and gas development and revenue distribution to address any potential contestations that might arise in communities along the voltaian basin to help minimize the risks of future investments in the area, and further help improve Ghana’s investment climate.


President Akufo-Addo also charged the Ministry of Energy to review existing operations in the industry, with the view to determining oil fields that are sub-optimal. The review will cover Petroleum Agreements that are dormant.


“The Ministry of Energy will engage with the operators, after the review, on the adoption of best methods for increasing oil recovery rate. For Petroleum Agreements that are dormant, the Ministry will encourage the operators to consider inviting stronger partners to join them or risk the termination of these Petroleum Agreements, should they persist in failing to meet their minimum work obligations,” President Akufo-Addo stressed.


 Increased oil revenues


In seeking to increase Ghana’s oil reserves and improve on oil and gas production, Cabinet is expected to soon approve a ‘Blueprint and Roadmap for Accelerated Oil and Gas Exploration and Development’, which is based on a new strategy of aggressive exploration.


“The strategy seeks to build synergies with the domestic downstream petroleum sector; to increase Ghanaian participation in the oil industry; and to accelerate the pace of institutional capacity development to manage our oil and gas resources efficiently,” President Akufo-Addo said.


The oil and gas industry, which is international in nature, requires the enforcement of stringent international standards in all aspects of the value chain, hence, the President demanded that any person or company aspiring to participate in the industry must be cognizant of these requirements.


“Government will, on its part, continue to prioritize the development of skills of our youth and the Ghanaian entrepreneur through the AOGC programme, so they can meet international standards and thereby, become more competitive in the industry. My hope is that more Ghanaian companies will participate in the bidding process,” he said.


Source: ISD (Rex Mainoo Yeboah)