Petroleum Exploration & Production Bill Debate Deepens

The African Centre for Energy Policy (ACEP) has urged policy makers and parliamentarians to revisit the petroleum Exploration and Production (E&P) Bill 2013 because of lack of transparency and yet being considered as the most progressive pieces of legislations in governing the upstream petroleum sector.

The E&P Bill seeks to adopt an open and competitive bidding process for granting oil concessions, creation of public registry for disclosure of petroleum agreements, contracts and permits.

The Executive Director of ACEP, Dr. Mohammed Amin Adam said that despite the positive nature of the new E&P bill there are still certain conflicting sections of the bill which needs to be modified before parliament approves it into law.

It is interesting to know that, after several calls to replace the E&P Bill with the Provisional National Defence Council (PNDC) Law 84, which is the current law under which petroleum exploration and production activities undertaken, section 10(4) of the E&P Bill states that minister may ignore the outcome of an open tender process and apply direct negotiations.

Further explanation of section 10(4) of the E&P Bills posited that the minister will not be required to give reasons in a public process why the neglect of the open competitive bidding process for awarding oil contracts.

According to the Executive Director of ACEP, this fall flat in the face of transparency and accountability as we have the course to believe that the administrative processes used in awarding contracts were opened to abuse, rent seeking and corruption.

He indicated that the confidentiality clauses we have in the E&P Bill is broad to an extent that it undermines public scrutiny in petroleum contracts.

Dr. Mohammed Amin Adam added that thereare also no requirements for the mandatory disclosure of beneficial ownership information in oil contracts because of the fact thatsearch for true owners of oil firms have always been untraceable.

The local content regulation (LI2014), he explained that the regulation 4(2) further indicates that the minister shallatleast hold a five percent equity participation of an indigenous firm.

However, regulation 4(4) states that for the purposes of sub-regulation (2), the minister shall determine the persons qualified meanwhile, the processes have remained elusive to interests groups in the oil and gas sector.

According to him, the equity participation cannot promote open contracting processes because it lacks transparency,it concentrates benefits in the hands of the few at the expense of many.

These gaps, he noted, undermines the process of open contracting open and competitive bidding process hence, there must be suchattempts by parliament to incorporate the views and comments after their stakeholders consultation when they the E&P Bill is laid before parliamentarians when they resume.

Addressing the multi-stakeholders’ conference, which was supported by Department for International Development (DFID) and UKaidthat the new bill will address the lack of open and competitive bidding processes for acquiring prospecting or exploration rights in the oil industry.

According to him, this will assist in eliminating the gap in mandatory contracts disclosure and deal with excessive ministerial discretion in the contracting process.

He noted that Ghana can consider taking into consideration learning from internationalbest practices and experience from countries such as Sierra Leone, Angola, Brazil and others where the ministers proposed a direct negotiation in oil contracts, they are required to declare it through public notice to allow citizens to make comments on contracts as part of the evaluation process.

Dr. Steve Manteaw, co-chair, Ghana EITI and chairman of the conference said the law should not fall short of the Extractive Industries Transparency Initiative (EITI) standard.

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