Government has been commended for the development of major policies and legislations such as the Petroleum (Local Content and Local Participation) Regulations (L.I. 2014), Natural Gas Pricing Policy and the Gas Master Plan to promote the development of the energy sector.
The Africa Centre for Energy Policy (ACEP), which made the commendation, says it is equally impressed about the pledge by the Energy and Petroleum Minister, Hon. Armah Kofi Buah, to lay before Parliament the Petroleum (Exploration and Production Bill) which, it says, promises to be one of the most progressive pieces of legislation Ghana will be blessed to have for governing the upstream petroleum sector.
Speaking on behalf of ACEP at a news conference in Accra, yesterday, Mr Benjamin Boakye, Director of Operations and Resource Mobilisation, ACEP, noted also that eight new petroleum agreements had been signed that contained increased fiscal terms, the introduction of capital gains tax and the removal of blanket stability clauses as announced by the Energy and Petroleum Minister when he took his turn at the Meet-The-Press series in Accra, recently.
However, according to Mr Boakye, even though the new developments in the new agreements were positive, ACEP was of the opinion that the administrative processes used in awarding these contracts were flawed, adding that ACEP could not rule out ‘fronting in some of the transactions and inexperience on the part of some of the companies granted the contracts.
Mr Boakye said ACEP could also not rule out fears that some of the companies granted the contracts had no financial capacity, adding that of all the foreign companies involved in the eight new petroleum agreements, only three― Eco Atlantic (TSX Canada), Heritage Oil (London Stock Exchange) and A-Z Petroleum (Nigeria Stock Exchange)―were listed on the Stock Exchange.
Mr Boakye said ACEP was worried that in spite of the progressive elements and the strong transparency proposals in the new Bill, administrative processes were employed to grant all the eight new agreements while the Bill was yet to be passed into law.
ACEP, Mr Boakye said, had, therefore, reiterated its call for a moratorium on the granting of petroleum licenses until the Bill is passed into law.
Furthermore, he said, ACEP was demanding that the new Bill should incorporate a provision for the establishment of a public register for the disclosure of beneficial ownership information of all companies granted petroleum agreements.
In addition, he said, ACEP urged government to come out with guidelines on the selection of indigenous firms that could partner foreign oil companies to undertake petroleum activities, noting that the current Local Content Regulations provided room for potential abuse and discriminatory practices against some Ghanaians.
On the power sector, Mr Boakye said, ACEP welcomed the latest move by government to bring in Emergency Power Barges to address the problem of power shortage.
However, he said, given that Ghana had relied on an emergency power barge in the past which proved to be too costly for the country, it would be preferable to have a short-term supply arrangement while government focused on building land-based long-term power plants.
He said ACEP was making these demands for adequate safeguards in the interest of the public taxpayer and the general interest of the country.
Source: ISD (G.D. Zaney)