Ghana’s First Oil Licensing Bid Round Monitoring Report launched

Ghana’s First Oil Licensing Bid Round Monitoring Report launched

A monitoring report assessing Ghana’s first-ever Oil licensing Round has been launched Thursday May 7, 2020. Launched virtually, the report is an evaluation of the entire licensing bid process, which began last quarter 2018.

It was prepared by a monitoring team composed of representatives from the National Resource Governance Institute (NRGI), Africa Centre for Energy Policy (ACEP), and other civil society organisations.

Contents of the report include performance assessment of key milestones and timelines indicated by the Licensing Bid Rounds and Negotiations Committee which superintended over the process. Some of these milestones included data view and licensing, publication of invitation for expression of interest and prequalification, evaluation of prequalification applications, announcement of results, bid submission deadlines, public opening of bids, among others.

ACEP’s Executive Director, Benjamin Boakye who presented the findings, said the assessment was done in respect of international best practice indicators, and scored using the NRGI’s grading scheme index.

Indicators utilized for the report included compliance with law, compliance with calendar of events under bidding round, direct negotiations, adherence to procedural requirements under competitive bidding and public engagements.

The Licensing Rounds Committee achieved all set timelines for the milestones except for the commencement of negotiations and award of blocks which have been further delayed by the current pandemic.

Report Highlights

The monitoring team observed that initial investor interest could not be sustained through the entire bidding process due to unfavourable fiscal terms which did not compensate for risks. Moreover ‘Parallel Direct Negotiation’ served to motivate other applicants to directly engage government than the competitive process.

The report also indicated there was no deliberate mechanism to engage the public and civil society on the process, as well as limited information on both prequalified and disqualified companies on the bid.

It further indicated that based on the assessment indicators, the Licensing Rounds Committee performed satisfactorily in the procedural requirements on competitive bidding and compliance with calendar of events but performed poorly in direct negotiations and public engagements under bidding round.

Recommendations

To improve future bidding rounds for desired outcomes, the monitoring team advised government to begin issuance of reconnaissance licenses to gather quality data that will help to aid future bidding rounds.

Government must also deepen transparency in the prequalification process by publishing the list of prequalified and disqualified applicants and the blocks they apply for, ensure beneficial ownership disclosures of companies are pursued to enable public scrutiny to determine ‘politically-exposed persons’ in the award of contracts.

While engaging the public, government must also “ensure that direct negotiations are done only where peculiarities that point to a specific company to optimize the resources are established,” Mr Boakye said.

As an offshoot of the Petroleum Exploration and Production Law, the oil licensing round was undertaken to introduce more transparency into the bidding process.

Source: Energy Ghana

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