ACEP Calls For Reforms In Oil Contracts

Oil PixAfrica Centre for Energy Policy (ACEP), an energy-policy think-tank, has called on the government to do more comprehensive governance reforms pertaining to oil contracts, if the country is to be a model of good petroleum re-source management.

The Centre has also urged the government to show good faith beyond the new anti-corruption clause in its petroleum agreements (PAs).

A statement issued in Accra at the weekend by Dr. Mohammed Amin Adam, Executive Director of ACEP and copied to press, called on the government to strengthen the country’s anti-corruption agencies, to identify, investigate and expose corruption in the emerging oil and gas industry.

The Centre called on the state to adopt an open and competitive process in licensing oil blocks and make contract disclosure mandatory.

It urged the government to detest the practice of rushing to Parliament for the approval of PAs, and rather facilitate the early passage of the Petroleum (Exploration and Production) Bill to stem abuse.

ACEP wondered how Parliament can effectively scrutinise the PAs, namely, Brittania-U, Heritage, Sahara Energy Fields, UB Resources and A-Z Petrpleum, and approve them in just two days, bringing the total number of PAs approved to eight in four months.

The Centre drew Parliament’s attention to the potential violation of the local content regulation LI 2204, which provides a minimum equity of five per cent for indigenous Ghanaian firms in every PA.

For instance, it noted that indigenous firms, Hills Oil Marketing Company and Royal Gate, which holds five per cent each in the Brittania-U and UB Resources’ PAs respectively, had been translated into a shortfall of four and four-point-three-five percent.

According to ACEP, it suspected fronting by some Ghanaian firms as they failed to submit documentations on their financial and guaranteed performance obligations, and therefore called on the government to disclose the beneficial owners of all companies both local and foreign.

The statement however, commended the government for its bold architecture, in providing elements in the PA that sought to eliminate corruption, especially through bribery or inducements of public officials, politicians and political parties.

It recognised the new features in the Pas, saying, “That can help to increase fiscal and non-fiscal benefits including the removal of the stabilisation clause that allows for the implementation of new laws and regulations, the introduction of capital gains tax and cost ring-fencing.”

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