Interview: John Peter Amewu
How successful has the oil block licensing round been in attracting foreign investment?
JOHN PETER AMEWU: This was the first time in our history that we engaged in a competitive licensing round for our oil blocks. It was preceded by a licensing round in which several blocks were awarded without proper structures and regulations in place, which resulted in their underperformance in terms of productivity. The evaluation process for bidders is now a lot more transparent, and this will increase foreign investor confidence and highlight that Ghana is ready to proceed with further competitive licensing rounds in the future. Our primary motivations are to increase our reserves-to-production ratio, improve confidence among potential investors and remove speculation regarding licensing processes. This licensing round has been incredibly successful, and has opened up channels for a second round of licensing, particularly for onshore blocks.
To what extent has Ghana been able to resolve its power distribution challenges?
AMEWU: Agreements with independent power producers (IPPs) have been renegotiated and gas prices have been reduced, with the aim of bringing down the cost of electricity to ease the cost of doing business throughout the country. The government has recently announced that they will engage in initial consultations regarding bilateral engagement with each of the IPPs in an effort to further lower costs.
In terms of power generation, new investments are expected beyond the year 2024. This is because demand is growing about 250-300 MW per annum, and we therefore expect that by the year 2024 we will be close to consuming our current capacity. Looking forwards, we will no longer subject power generation contracts to negotiations, and electricity production will therefore fall under a competitive system. In this way we believe we will be able to reduce the excess capacity charges that we have been confronted with in previous years.
Which neighbouring countries offer a potential market for power exports from Ghana?
AMEWU: Ghana is working to generate power for export to other landlocked areas in the region, and this may also encourage investors to look favourably towards Ghana. We are strategically located and currently hold export agreements with Côte d’Ivoire, Burkina Faso, Benin and Togo. Indeed, we currently export about 240 MW of power a day to these countries. In addition, we are working on extending transmission lines between Ghana and Burkina Faso. However, we do not currently have the facilities to do this, so there remains a lot of room for growth and investment.
What has been the impact of the new downstream and midstream local content policies?
AMEWU: They are already having a significant impact in supporting the government’s plan to bring all downstream and midstream activities – including petrochemicals, the fertiliser industry and refinery projects – to a central point in the Western Region. About 8100 ha of land for this cluster are already in an advanced stage of procurement and the Cabinet has approved policies to regulate development – so there are great opportunities for those interested in refinery construction.
In what ways can the government encourage further exploration and production?
AMEWU: There is a need to bring on board international oil companies, particularly for those blocks that speculators have held on to. We have also reviewed current regulations with Parliament in order to allow companies to extend rights to licensed areas, even if a discovery is not made within the specified period, at which point they were previously required to relinquish the land. This will facilitate more in-depth exploration activities in that area. Regarding onshore processes, we recently started seismic exploration in the Volta Basin and the results are looking very positive so far.
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