Audio By Carbonatix
Energy Minister John Peter Amewu has said significant data gaps and low data quality are disincentives to attracting major oil giants in Ghana’s oil and gas bidding process.
According to Mr Amewu, the recent bidding process for some oil blocks in the Western Region has not been satisfactory as a result of challenges including gaps in the legislative instruments as well as low quality of data on the blocks.
Mr Amewu said, “Our basins are largely not de-risked, significant data gaps and low data quality still exist, and many companies continue to site our fiscal regime as disincentives. The recent results of Ghana’s first licensing round, although not satisfactory in terms of the response rate, has confirmed the fears about a developing industry and the risk associated with frontier areas.”
The Minister was speaking at the legislative review stakeholder meeting held in Accra last Friday.
Interacting with stakeholders Mr Amewu said, “It is clear to us that you have serious concerns about the legal, regulatory and fiscal environment governing the oil and gas industry. As a country, we also have concerns about the operations of industry players, and therefore our policies and regulations have been designed to maximize value for the country and our people.”
He added, “However, we cannot both remain stuck to our positions whilst there is great potential for win-win arrangements.”
“As a government committed to private sector development, we are prepared to change course. We are determined to formulate and implement market-friendly policies to make Ghana competitive.”
He added, “This is particularly important because oil and gas projects have become very expensive, upstream investments are not increasing faster, and the threat of the green revolution to the prospects of hydrocarbon-based economic development, have led us to reconsider our strategy for the accelerated growth of our oil and gas industry.”
He, therefore, urged the stakeholders to make input into the review process so that government can have a concrete strategy in attracting major oil and gas players into the country.
The nonexistence of reliable data and low level of documentation on exploratory fields continue to have a negative impact on the quest by the government to bargain higher returns from global oil exploration companies.
It will be recalled that some 14 oil and gas firms expressed interest in the first licensing and bidding process for some oil blocks in the Western basin but some of these companies including ExxonMobil pulled out as a result of poor data.
The situation has compelled the Ministry of Energy to conduct a strategic legislative review for the oil and gas industry.
The review process began with stakeholders and industry players seeking to examine the government's new policy to accelerate growth in the sector to help meet its target of one million barrels per day.
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