Investment in Ghana's energy sector has boomed in recent years and while the country is now evaluating bids for new exploration blocks, the lack of an effective regulatory framework could deter that investment.
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"More blocks are being offered and evaluation of bids are ongoing," deputy energy minister Benjamin Dagadu said Thursday.
Ghana expects investments of at least $20 billion over the next five years, mainly from foreign companies, as it seeks to replica the success of its Jubilee development in the Tano Basin, which was brought on stream in December 2010.
The investment will be spent on developing the Tweneboa/Enyera/Ntomme (TEN) block, the Deepwater Tano/Cape Three Points blocks, and the Sankoa block. The Tullow-operated TEN development alone is billed to cost around $4.5 billion and the project is scheduled for commissioning in 2016.
US independent, Hess is expected to submit a work program for its seven discoveries in its block in the Tano Basin this year, while Eni could start progressing development activities on Sankofa-Gyame field development in the Offshore Cape Three Points (OCTP) block next year.
While current activity is focused on the Tano Basin, there are further basins that may yield hydrocarbons such as the onshore Voltaian basin which covers over 40% of the country's land mass, and the Keta basin, off the coast of Accra. Equally, little drilling has been carried out in the Saltpond/Central Basin.
"Only 20% of Ghana's basins have been explored, there is still 80% under-explored but that requires investment," said Benjamin Boakye, project director for the Accra-based Africa Centre for Energy Policy.
After several revisions, Ghana's Petroleum Exploration and Production Bill is still before Cabinet and being prepared to put to Parliament, Dagadu said.
It is not certain when Cabinet will approve the bill, which will make way for a more comprehensive and advanced legal regime to govern the energy industry.
Boakye said there are still concerns the bill does not allow for an open and competitive bidding process in the award of oil and gas licenses along with "excessive" ministerial discretion in the contracting process.
"The legal framework needs to be in place before new oil blocks are handed out but we want a competitive, bidding process that is transparent. We don't want favoritism and cronyism embedded in the bill. The laws need to be tightened up," he said.
Boakye also said there should be a moratorium on further licensing of oil blocks until the new petroleum law is passed by Parliament.
CUT OR FLARE
Delays in the completion of Ghana Gas Company's processing plant at Atuabo, which will process gas from the Jubilee field, has not only pegged back production but is likely to force Ghana to flare gas despite having a zero flaring policy.
Dagadu said Ghana is now discussing with the field operators to cut crude output by 10% or flare gas to reduce the amount of gas re-injected into the reservoir.
The Atuabo plant had been scheduled for completion in April this year but the deadline has been postponed until at least September largely due to technical issues.
Dagadu said 100% of the overland gas pipeline to the Atuabo plant has been constructed and 93% of the processing unit, which is being built by Sinopec and Canada's Thermo Design, has been assembled.
The Jubilee oil field was projected to be producing at 120,000 b/d by the end of 2013. But Tullow now estimates the field will average 100,000 b/d for 2014.
Tullow's partners in the Jubilee field are Dallas-based Kosmos, Anadarko, South Africa's state-owned PetroSA and the Ghana National Petroleum Corporation.