Mohammed Amin Adam
The Africa Centre for Energy Policy (ACEP) has commended Government for taking a bold initiative to improve petroleum governance, particularly in some of the new Petroleum Agreements (PAs) that have been submitted to Parliament for approval.
‘We are encouraged that PAs for the first time in Ghana’s history contain provisions that shun corruption especially through bribery or any inducement of public officials, politicians and political parties.’
ACEP lauded the introduction of new features in the PAs, which will no doubt help in increasing fiscal and non-fiscal benefits to the state when there are discoveries in the Contract Areas.
These include the removal of Stabilization clauses in the PAs that allows Ghana to implement new laws and regulations in the life of a PA without disturbing the original terms of the PA in so far as they do not create economic disequilibrium in the PA; the introduction of capital gain tax which allows Ghana to impose taxes on the value gained from the assignment or transfer of interest under a PA; and the introduction of cost ring-fencing, which prevents oil companies from using assets in one contract area to finance liabilities in another contract area.
‘ACEP is of the strong view that the governance provisions in the contracts have once again demonstrated Ghana’s leadership in good governance.
‘However, whilst we commend government for these initiatives, we wish to also call on the government to strengthen Ghana’s anti-corruption agencies to identify, investigate and expose corruption in the emerging oil and gas industry.
‘Government must also adopt an open and competitive process in licensing oil blocks, make contract disclosure mandatory and establish a register for the disclosure of beneficial ownership information in all PAs.
It further complained about the licensing process in Ghana which it mentioned is too open to abuse.
‘Ghanaians must be asking the Government why it is delaying the passing of the new Petroleum (Exploration and Production) Bill which has a better governance regime, whilst at the same time rushing many PAs to Parliament for approval.
It could not fathom why Parliament could effectively scrutinize six PAs and approve them in two days.
The six PAs are between the Republic of Ghana and six lead companies, namely: Brittani-U (1), Heritage Oil (2), Sahara Energy Fields (1), UB Resources (1) and A-Z Petroleum (1).
These six PAs are in addition to two other PAs (i.e. AMNI International; and CAMAC Energy) which were approved by Parliament in March 2014. The approval of the six new PAs will bring to eight PAs approved within four months usually without effective scrutiny.
‘All these firms are Nigerian companies, most of them minnows with little experience in offshore exploration. For most of them, their experience is limited to the operation of marginal fields, which is not what Ghana should be looking for at this stage of our oil industry.’
By Samuel Boadi
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