President Nana Addo Dankwa Akufo-Addo has charged the Energy Ministry to review critically existing oil exploratory activities and petroleum agreements, as the country moves to ensure efficiency and transparency in the management of its oil and gas resources.
Such a review, would determine oil fields that are sub-optimal, and possibly lead to the termination of the contracts of operators who persistently fail to meet their minimum work obligations.
“The Ministry of Energy will engage with the operators, after the review, on the adoption of best methods for increasing oil recovery rate,” the President said in Accra on Monday at the launch of the first Ghana Oil and Gas Licensing Round 2018, which would permit the allocation of new petroleum rights.
“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,” he stressed.
President Akufo-Addo further asked the Ministry, 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 are carried out in a transparent and efficient manner.
He noted that the 2016 manifesto of the New Patriotic Party pledged to “improve transparency in the management of our oil and gas resources.
“It is, thus, an honour for me to be able, today, to implement this important commitment by launching this maiden bidding round”, the President said
The President pointed out that with the last oil discovery, and the last exploration well drilled in 2014, the pace of oil exploration had slowed considerably in the country whilst production was 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.
“With the resolution of the maritime boundary dispute with Cote d’Ivoire, and the prevailing, transparent regime for allocating petroleum rights, many opportunities now exist for us to reverse the slow pace of oil exploration,” he said.
President Akufo-Addo indicated that the Ghana National Petroleum Corporation (GNPC) was also making progress in its efforts to discovering oil and gas deposits onshore in the Voltaian basin.
“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 will also provide an opportunity to develop a new economic growth pole in northern Ghana when production of oil commences,” he said.
Thus, the President has 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 basis.
Additionally, those regulations, he said, should also address onshore oil and gas development and revenue distribution, respectively, to address proactively any potential contestations that may arise in those communities in the course of time, to minimise the risks of future investments in the area, and further help improve Ghana’s investment climate.
The Presidency disclosed that Cabinet, in seeking to increase Ghana’s oil reserves and improve on oil and gas production, was 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,” he said.
President Akufo-Addo re-stated that the oil and gas industry required the enforcement of stringent international standards in all aspects of the value chain, demanding that any person or company aspiring to participate in the industry must be cognisant of these requirements.
“Government will, on its part, continue to prioritise 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.
The President stressed that his administration was determined in its resolve to leverage Ghana’s oil revenues to create assets, and not waste it on consumption and the accumulation of debt.
Thus, government was investing revenues from oil in social programmes that would inure to the benefit of its people to accelerate wealth creation and national development.
The President said policies like the Free Senior High School policy, that was allocated some GH¢455.9 million of petroleum revenues in the 2018 budget, ensured that oil revenues “are being equitably distributed to our people, and not ending up in the pockets of a few. The most important resource of any nation is its people.”
“Investing in our children and in the future of our country is the most appropriate investment any Government can make, and we are fully committed to continuing on this path.”
President Akufo-Addo noted that the countries that had benefited immensely from their oil and gas resources, are those that implemented policies to accelerate value addition activities in their economies, through the development of forward and backward linkages, and by investing oil revenues in strategic social and economic programmes.
He stressed that his government was following suit, adding that “if we are to sustain and broaden the scope of our social interventions that rely on petroleum revenues, we must consciously work to increase crude oil production.”