Editorial

Developing an effective licence round strategy

Are you attracting the right type of investors and level of investment?

Joshua Ngu

Principal, Asia Pacific Consulting

Joshua advises clients in corporate strategy, mergers and acquisitions and commercial due diligence.

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Do you have an effective licence round strategy in place or has it simply evolved over time to a point where you're not sure whether it's able to successfully meet your objectives? We can help you get your licensing round strategy back on track with our structured Licence Round Health Check. 

In the three-minute video below, Joshua Ngu, principal consultant, answers some common questions about optimising licence rounds:

  1. How can we align bidding criteria with the overall objectives of the state?
  2. How do I optimise the process and manage the timelines?
  3. How do I ensure ensure operator and non-operator requirements are appropriate?
  4. When is it counter productive to charge interested parties for data?
 

Our tried and tested approach focuses on analysing seven key areas:

1. Resource development roadmap

Each country should think about the type of investment being attracted and whether it is aligned with the overall objectives of the licence round. Understanding what you would like to achieve in each licence round in the short, medium and long term should be the starting point of all licence round considerations.

2. Licensing structure and frequency

Options will depend on the objectives a country would like to achieve and a number of other factors such as the maturity of the sector, success or otherwise of previous approaches and availability of information. A country could opt for regular rounds, an open door policy,  non-regular rounds or a mixture of these for different types of opportunities.

3. Bidding criteria

A key part of the licensing process is the bidding criteria. We assess whether the bidding criteria are aligned with the country's overall objectives. Another important question is whether minimum commitments and weighting of technical and commercial factors are aligned with the prospectivity, attractiveness and risks of the opportunities  offered.

4. Process and timelines

The right processes could potentially encourage more interest. We look at the appropriate number of stages,  as well as the time provided to assess opportunities and to develop bids.

5. Operator and non-operator requirements

Requirements imposed on operating companies can have an impact on whether a company will want to invest in your country. Any requirements have to balance the need for technical, financial, environmental and local commitments with the opportunities on offer.

6. Acreage offered

There are often many decisions to be made regarding the acreage to be offered. This includes the size of blocks, number of blocks, basins of the blocks . Further, decisions will have to made regarding the offering nominated, recycled or relinquished blocks.

7. Data availability

Some countries provide free and open access to all bidders, while others charge a fee and only offer data packages to pre-qualified bidders. There are various permutations, but the approach selected by a regulator will have to be aligned with the following factors:

  • The availability of data
  • The maturity of the basin
  • The perceived prospectivity of the opportunities

Fill in the form to get our guide to attracting investment and running successful licensing rounds.

Talk to Joshua about your licensing strategy

Whether you want to ensure you are taking the right approach or that investment in your oil and gas sector is as competitive as possible, fill out the form to talk to Joshua about your licensing strategy.

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Joshua Ngu, Principal Consultant, Asia Pacific

Offshore hydrocarbon production platform
Editorial
Key trends and approaches

What should you consider when setting up a licence round?

Watch the video series