Dr. Steve Manteaw, the chair of the civil society platform on oil and gas, said on Tuesday the current management of the oil revenue in Ghana was a marked departure from the way it had managed mining revenues over the years.
“Years gone by, we treated mining revenues as consumption income rather than investable income. So we spent everything in the next year’s budget and, after 100 years of mining, we have nothing to show as a country in terms of the benefits of mining,” he told Xinhua in an interview.
Ghana civil society platform on oil and gas has 115 members, including civil society organizations, academic and research institutions and individuals.
The platform focus on strengthening the ability of civil society to have their voices heard on oil and gas legislation, revenue collection and environmental protection. The platform is influencing the development, revision and content of petroleum legislation.
“Now going into the oil sector, we have developed a petroleum revenue management law passed in 2010. This is important because it means that we are going to be guided by law on how we treat petroleum revenues,” he said.
The U. S. based Kosmos Energy discovered oil in commercial quantities offshore the Jubilee Oil Field, along the Gulf of Guinea, in 2007.
The country’s Jubilee Oil Field, the largest to be discovered in West Africa in recent years, however commenced commercial production in November 2010, turning out 25,000 barrels of crude oil per day (bopd).
Production increased to 90,000 bopd by October 2011 and to a daily average of 110,000 bopd by the first quarter of 2013, according to the Ghana National Petroleum Company and Tullow, lead operators of the Jubilee Oil Field.
A significant body of research has shown that resource-led development not only fail to propel economic growth, but also often results in worse social and economic conditions than before extraction began if the resources are not managed prudently.
Ghana therefore drew heavily on the experiences of both successful and unsuccessful countries, and adopted and adapted good practices, thus shying away from mistakes of others to avert such resources curse, sometimes referred to as the Dutch Disease.
The first move towards accomplishing that goal was the passage of the Petroleum Revenue Management Law, which provides the framework for the collection, allocation and management of petroleum revenue in a responsible, transparent, accountable and sustainable manner.
Under the law, partners have agreed to spend 70 percent of the total oil revenue to the oil sector, through the budget, and to save 30 percent.
“We are also going to ensure that even the 70 percent is spent on four areas of priority which are revised every medium term. So the way in which we are proceeding will ensure that Ghana avoids the mistakes that we have made in the mining sector,” he said.
“All these measures in my view will help to get more transparency in the operations of companies in Ghana,” Manteaw stated.
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