Business News of Sunday, 21 June 2015
Parliament is working on proposals that will help resolve the problems that have bedevilled Ghana’s oil industry over the years.
This was the outcome of several consultative meetings by the Parliamentary Select Committee on Mines and Energy with foreign experts promoting best practices in the industry.
Cletus Avoka, Chairman of the Committee said so far, members have met with experts in some foreign countries which are well noted to be promoting good practices in the industry including Norway, Trinidad and Tobago as well as Malaysia.
Mr Avoka made this known after members of his committee concluded deliberations with officials of Petronas, the famous Malaysian Oil Company and members of the Malaysian Parliament. Mr Avoka was the leader of a Ghanaian delegation made up of the Committee, the Petroleum Ministry, Ghana National Petroleum Corporation (GNPC) and the media.
He said the Committee planned to study the information collected so far and hold a forum for stakeholders to make the necessary inputs before the close of the year.
According to him, the conclusions will highly depend on the calendar and the onus of the leadership of Parliament.
“We are looking at each of the clauses and compare them to other best practices elsewhere before making the required recommendations to be presented to parliament for the necessary amendments to be made,” he said.
Mr Avoka said although a lot of information have been gathered from the various study tours, it should be noted that different political systems operate in the other jurisdictions and, therefore, there are different understanding of the issues and expressed the hope that a workable document would be presented to the house.
The different political settings as well as the long years of operation in other countries also come with some grey areas and challenges for Ghana such as the local content law and contract durations that need to be resolved as the country is only five years old into the Industry, he said.
Addressing the concerns of the GNPC as an entity, the Committee members were of the view that the Corporation is tied with too many control systems that that are slowing its work and business growth.
According to them, the GNPC has too many strings attached to its operations and therefore there should be a law to reduce the legal constraint that would help the Corporation operate with an activity plan to accrue the necessary profits and propel the growth of the economy.
In the other jurisdictions such as Malaysia, the Petronas, which is the only National Oil Company operates as an autonomous entity and takes all decisions by itself in consultation with the Prime Minister.
When the proposal is accepted and passed it would help put the GNPC on the right footing to articulate the issues under the petroleum industry, especially where prospecting, production and the marketing of oil and gas are concerned.
For example it would help make some amendments to the Petroleum (Exploration and Production) Law, PNDC Law 1984, establishing the legal framework governing the contractual relationship among the State, GNPC and prospective investors in upstream petroleum operations.
It is anticipated that the new bill would also bring all the fragmented entities handling the oil and gas business in Ghana under one umbrella to well manage the industry for national development.
An autonomous entity such as the GNPC would be able to plan its budget, source and raise funding for investment and thus make the needed profit that would help build the nation as pertains in other countries.
Other Parliamentary Select Committee members on the trip included Mahama Toure Naser, Joseph Cudjoe and Muntaka Mubarak Mohammed who were supported in the deliberations by Ghana’s High Commissioner to Malaysia, Mr Ben Eghan.