Business News of Wednesday, 14 February 2018
A Professor of Law at the University of Ghana Law Faculty, Raymond Atuguba, has warned that Ghana could be shortchanged in the ExxonMobil Petroleum Agreement if Parliament goes ahead to ratify it without recourse to due diligence.
He argued that, Parliament has not been thoroughly effective in carrying out its oversight responsibilities, hence the need to critically examine the agreement.
Professor Raymond Atuguba raised this concern in a presentation christened, “The Ghana-ExxonMobil Petroleum Agreement, a legal and political economic analysis.”
This was at a two-day workshop on the Ghana-ExxonMobil Petroleum Agreement sponsored by the German Development Cooperation (GIZ), in partnership with the Institute of Financial and Economic Journalists (IFEJ), at Akosombo in the Eastern Region.
He said there was limited transparency in the agreement, and also decried Ghana’s 15% shareholding, whereas a yet to be identified Indigenous Ghanaian Company (IGC) is to have 5% shares.
Professor Raymond Atuguba thereby admonished successive governments to negotiate better deals on the nation’s natural resources, and invest the proceeds in projects that are everlasting.
“Ghana’s political stability makes her attractive to multinationals who want to exploit the natural resources. It is imperative that we harvest now and invest in sustainable and renewable resources,” the law Professor stressed.
He proposed amendments of some aspects of Ghana’s legal regime governing the signing of oil contracts with multinationals.
According to him, the Energy Minister’s limitless powers on managing the oil resources undermines the 1992 Constitution that set up the Petroleum Commission.
“The unconstitutional powers of the Minister are huge and indeed can undo all the good in the law. The Minister is not responsible for the regulations and management of utilization of natural resources concerned, and the coordination of the policies in relation to them,” he explained.
A policy Analyst and also an outspoken member of the Public Interest and Accountability Committee [PIAC], Dr. Steve Manteaw, critically assessed the strength and weaknesses of the ExxonMobil Petroleum Agreement from the perspective of fiscal provisions, risk and benefit of the allocation.
He identified some worrying provisions in the contract, which he said should be critically examined before the Parliamentary ratification.
“The default position of the law in respect of licensing; Section 10 (3) of the Petroleum Agreement, shall only be entered into after an open, transparent and competitive public tender process. Provision of bonus payment (Section 88 of the Petroleum Revenue Management Act was not invoked.”
He called for a bipartisan approach to ratification of the agreement.
Dr. Steve Manteaw opposed the import and export tax waivers to multinationals exploring Ghana’s oil resources, and described the act as a huge loss of revenue to the ailing local economy.
The ExxonMobil Petroleum Agreement was signed by the Energy Minister, Boakye Agyarko on January 18, 2018.
The allocation, which was done through direct negotiation is situated in the deep water Cape Three Points area of the Western Region.
The agreement is awaiting Parliamentary ratification after an Indigenous Ghanaian Company has been found to take the assigned 5% shareholding.