Ghana’s forthcoming bid rounds holds lessons for Nigeria

Ghana is conducting its first licensing bid rounds for nine oil blocks in its Western Basin, in October, though producing about 150,000 bpd which seems quite an insignificant compared to Nigeria’s 1.8m bpd, the rigour involved in planning, the transparent approach to the process holds lessons for Africa’s biggest oil producer.

The country has decided on direct negotiation, opening up the process for talks with investors all across the world according to officials of the Ghana energy ministry. In a world where options have become abundant, investors are looking for the best deals with little hassle but capital has to be courted.

Out of the nine oil blocks which have been mapped out in the Western Basin in Ghana, only three blocks would be allocated through the open competitive tender. Two would be given through direct negotiations, while one would be reserved for the national oil company, GNPC.

GNPC is expected to explore its block in partnership with a chosen strategic partner with the view to develop its technical capacity to become an operator.

This brings us to six oil blocks to be given out in the first Licensing round of bidding. The other three are expected to be auctioned in the second round at a date yet to be fixed.

The openness in disclosing the rules guiding the process and if backed by action will ensure a level playing field for every investor. This is what is often missing in many of Nigeria’s licensing rounds. While the Nigerian National Petroleum Corporation (NNPC) could announce a competitive bidding process, but preferred candidates could still end up being awarded the block which muddles the process for everyone.

The Nigerian government’s cavalier attitude towards investors and lack of respect for sanctity of contracts has proven to be a major turn-off for investors. This is why in the 2007 licensing round, all the International Oil Companies boycotted the process because they perceive it would not be transparent. The process was marred with accusations of irregularities and till date, many of the blocks awarded have not been developed.

Ghana is trying to conduct a better process. The country’s officials were at the Offshore North Sea (ONS) conference in Norway recently, and were marketing the bid rounds to more than 70 companies who had booked space to discuss with the delegation.

The Petroleum Commission has embarked on a trade mission to Norway with no less than 40 Ghanaian companies to engage global giants in the upstream sector interested in doing business in Ghana or with Ghanaian partners. It is also encouraging local participation by inviting local companies to partner with IOCs to acquire oil blocks offered for bidding.

Egbert Faibille Jnr, chief executive officer of the Petroleum Commission assured companies interested in doing business in Ghana and exploring the upstream sector of the perfect ambiance for business.

Faibille also said the main focus was to ensure that Ghanaian companies on the trade mission get the opportunity to leverage and build the needed synergies to attract the necessary investment to Ghana’s upstream sector.

ISAAC ANYAOGU