Sunday, 26 May 2019

Experts worried as two oil giants ditch Ghana’s oil blocks bid round

Image result for ExxonMobil and British Petroleum and ghana

Adnan Adams Mohammed

Ghana’s first international competitive bidding process for new oil blocks have experienced shocks as two International Oil Companies (IOCs) have pulled out. 

The US oil giant, ExxonMobil and British Petroleum (BP) which had earlier submitted applications for direct negotiations for block 5&6, pulled out at the latter stage of the ongoing Licensing Bid Round.

Some energy experts have expressed worry over the development and calling on the government to be warry as well. The Africa Center for Energy Policy (ACEP) has charged the Ministry of Energy to undertake some serious introspection to find out why big companies like ExxonMobil and British Petroleum, (BP) pulled out of the competitive bidding process for the 3 oil blocks put on offer by the Government.

Ben Boakye, the Executive Director of ACEP has cautioned that if the necessary lessons are not learnt from this bidding exercise, future exercises might suffer. “I think we need to do some introspection, probably find out from the companies why all of a sudden they were not interested in competing for the oil blocks, so that will inform our subsequent bidding rounds. Because if it happens like that the next rounds could be even more disappointing, because then you may not even have interest in the blocks.”

The government, through the Energy Ministry, earmarked six oil blocks for exploration. Three of the blocks; 2, 3 and 4-were to go through a competitive bidding process while two blocks-5 and 6-were supposed to be for direct negotiations. One of the blocks was reserved for Ghana National Petroleum Corporation (GNPC).

The deadline for the submission of bids for the blocks elapsed at 3pm Thursday, May 21, 2019.However, at about 15:15 GMT  last weekTuesday, when the bids were opened in the presence of pressmen and representatives of some of the companies which were pre-qualified, ExxonMobil and British Petroleum were missing from the race.

Chief Director at the Ministry of Energy Lawrence Apaalse, told the press that the Ministry received information from the two companies, requesting direct negotiations for blocks 5 and 6 that they were no longer interested in the blocks.

Meanwhile, ENI and Vitol, as well as Tullow Ghana Limited, submitted bids for block 3 with First E&P submitting a bid for block 2.

However, there was no bid for block 4. Interestingly, the ministry received about sixteen applications for direct negotiations.

The original pool of companies that put in a bid for the 3 oil blocks include China National Offshore Oil Corporation (CNOOC), Cairn Energy, Qatar Petroleum, Global Petroleum Group, First E&P, Sasol, Equinor and Harmony Oil and Gas Corporation.

The rest include ExxonMobil, British Petroleum, Tullow Ghana Limited, Total, ENI Ghana, Vitol, Kosmos Energy and Aker Energy.

Out of the 14 companies that were prequalified to bid for the 3 blocks put up on offer, only Tullow Oil, ENI and Vitol as well as First E and P submitted bids.

Mr. Boakye also urged relevant stakeholders to question why a large number of companies (16) rather applied for direct negotiation for the opportunity to explore blocks 5 and/or 6 in Ghana’s offshore oil area.

“What signal does the high interest in direct negotiation send?. In the coming days we have to really dig deeper to find out why the companies want to explore the direct negotiation option. Is it because that side of the equation is weak and therefore everybody wants to exploit or because there are some constraints built into the competitive tendering process that wards the companies off? So we have to dive deeper into the two-pronged approaches to learn and make our competitive tendering process better.”

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