The draft Petroleum Exploration and Production (E&P) Bill has been finalised and approved by cabinet and will soon go before law-makers for ratification, the Energy and Petroleum Minister Emmanuel Armah Kofi Buah has said.
In a speech read for him at the Oil and Gas Summit in Accra, the minister said when passed the law will regulate the upstream sector of the petroleum industry and bring about harmonisation of the regulatory regime.
The bill has gone through a lot of fine-tuning since it was first drafted in 2010, with concerns being raised in the public sphere about its delay.
The concerns have been heightened by the signing of new contracts in the absence of the new law.
Four new oil contracts have been signed even though the new law, meant to replace PNDC Law 84, is yet to take effect.
The first two of these contracts, involving AGM Petroleum and Cola Natural Resources, were approved by parliament in December 2013; and the second two involving CAMAC Energy Ghana Limited and Base Energy Ghana, and AMNI International Petroleum Development Company (Ghana) Limited, were approved by parliament last month.
CEO of the Ghana National Petroleum Corporation, Alex Mould, hinted at the Oil and Gas Summit that three more agreements are currently being negotiated.
The Civil Society Platform on Oil and Gas and the African Centre for Energy Policy have kicked against signing of new contracts in the law’s absence, arguing that oil blocks may all be given out before the law which seeks to regulate the upstream sector is passed.
In a rebuttal, the chairman of the Parliamentary Select Committee on Mines and Energy, Dr. Kwabena Donkor, said the new law will not necessarily guarantee the country better terms, and that government is well advised to sign new contracts to keep exploratory activity going on in the country.
“It is beautiful if we have a new law that will fine-tune the nuts and bolts, but the critical issue is the terms. Are the terms favourable? How do they compare to other countries and entities at the same stage of development? And there has been a massive improvement in the new agreements,” he told the B&FT recently.
“Theoretically, others will say ‘let’s wait’. But in the real world there is need to have a continuum so that exploratory activities do not come to a halt… Currently, if you talk to the Ghana Oil Services Providers Association, they will say activities have gone down in Takoradi, just because for too long we were not doing any exploratory activities. We had not signed any exploratory contracts,” he added.