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Interest in oil contract disclosure intensifies

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Three Civil Society Organisations (CSOs) are asking government to adopt an open and competitive bidding approach in the award of oil contracts in the country.

The current process used to award oil contracts, according to the Africa Center for Energy Policy (ACEP), the Civil Society Platform on Oil and Gas and the Third World Network (TWN), does not promote transparency and could give rise to corruption.

The Executive Director of ACEP, Dr Mohammed Amin Adam, in an interview with the Graphic Business on October 21, said “what we have currently is the administrative process, where one company applies for an oil block and it is evaluated and awarded without waiting for another company to apply.

It is on a first come first served basis. It does not allow for a competitive bidding process where companies interested can put in bid for a particular oil block, and their bids are evaluated on a competitive basis and the winner is awarded the contract,” he explained.

Dr Amin added further that, “Our system is not that transparent in the sense that it is not open, it is not also competitive and it does not allow for citizens to track how companies selected are evaluated and on what basis they are given the oil blocks.”

The Chairman of the Civil Society Platform on Oil and Gas, Dr Steve Manteaw, who spoke on enabling citizen’s role in good governance of oil, gas and mining revenue resources at the sixth regional media training on oil, gas, and mining in Accra, said the process of negotiating contracts and subsequent ownership of oil blocks must be made clear.

“Ownership of the blocks as well as beneficial owners should be clear. We as a CSO raised red flags when Parliament signed oil contracts under certificate of urgency. This is because nothing had happened in Ghana’s oil sector to warrant the ratification of oil contracts under certificate of urgency,”

The Coordinator of Third World Network (TWN), Dr Yao Graham, at an earlier workshop on accountability in the extractive sector for members of the Institute of Financial and Economic Journalists (IFEJ)  also indicated that it was imperative for the people of Ghana who are the beneficial owners of the resource to be well informed about decisions taken on them.

“Mineral resources are finite and non-renewable. State ownership of mineral resources is in trust for the people; trust means the people of Ghana are beneficial owners (including future generations) and thus all decisions about their use must be informed by their interests and benefit,” he explained.

The observation raises questions as to whether Ghana, after all the workshops and seminars and consultations on how to make oil a blessing and not a curse was following the processes needed to achieve a positive aim for the country.

In Nigeria and elsewhere in Angola among others, there are serious challenges regarding issues of transparency in oil and gas deals.

In the end, the citizenry will not benefit because the wealth from rich resource is being enjoyed by a few mainly in political circles while the majority languish in abject poverty.

New bill to promote transparency

Meanwhile, Dr Amin, was hopeful that the draft Petroleum Exploration and Production (E&P) Bill, which is currently before parliament would provide for open and competitive bidding process, which to some extent, would provide transparency.

“The new E&P Bill before parliament at the moment provides for open and competitive bidding. However, there is another clause in the Bill which states that the minister is not obliged to give the contract to a company even if the company is fit for the contract. This will not be peculiar to Ghana but in other countries, reasons were provided, and therefore parliament must make provision to provide reasons why discretion is left to the minister,” he said.

In the absence of the bill, Dr Amin asserted that there is uncertainty among investors who would want to invest in Ghana, because they were not sure of what the final content of the Bill would be when it is finally passed.

“Currently, the PNDC Law 84 does not allow a lot of companies to compete so the feeling among most investors is that the government gives contracts to companies it likes; to those who have connections with power protocols. So it is like there is no level playing field for them to compete,” he said.

Rushing contracts

Several concerns have been raised about the ratification of oil contracts by Ghana’s parliament under “certificate of urgency”, although according to experts there was nothing wrong with Ghana’s oil sector that warranted signing contracts in a rush.

The rush conditions, they explained gave room for suspicion to the effect that they wanted to avoid being caught up by the E&P Bill.

“The oil is in the ground and there is no rush for it, and moreover oil contracts are signed for 25 or 30 years, so why would parliament rush to sign these contracts. Is it that the company is so extraordinary that parliament would suspend its standing order just to ratify the agreement,? he quizzed.

He however explained that parliament does not ratify oil contracts under “certificate of urgency” as it is widely reported but instead it sometimes suspends its standing orders to approve oil contracts.

“Parliament is expected to ratify all international contracts and since petroleum contracts are international, it goes through parliament. Per its standing order, they are expected to debate on the contract 48 hours after notice of the motion, but we have seen cases where parliament suspended their standing orders to ratify oil contracts and that is what some people refer to as ‘certificate of urgency’,” he explained. GB

PULLQUOTE

Our system is not that transparent in the sense that it is not open, it is not also competitive and it does not allow  citizens to track how companies which are selected are evaluated and on what basis they are given the oil blocks.

beneficial owners of the resource to be well informed about decisions taken on them.

“Mineral resources are finite and non-renewable. State ownership of mineral resources is in trust for the people; trust means the people of Ghana are beneficial owners (including future generations) and thus all decisions about their use must be informed by their interests and benefit,” he explained.

The observation raises questions as to whether Ghana, after all the workshops and seminars and consultations on how to make oil a blessing and not a curse was following the processes needed to achieve a positive aim for the country.

In Nigeria and elsewhere in Angola among others, there are serious challenges regarding issues of transparency in oil and gas deals.

In the end, the citizenry will not benefit because the wealth from rich resource is being enjoyed by a few mainly in political circles while the majority languish in abject poverty.

New bill to promote transparency

Meanwhile, Dr Amin, was hopeful that the draft Petroleum Exploration and Production (E&P) Bill, which is currently before parliament would provide for open and competitive bidding process, which to some extent, would provide transparency.

“The new E&P Bill before parliament at the moment provides for open and competitive bidding. However, there is another clause in the Bill which states that the minister is not obliged to give the contract to a company even if the company is fit for the contract. This will not be peculiar to Ghana but in other countries, reasons were provided, and therefore parliament must make provision to provide reasons why discretion is left to the minister,” he said.

In the absence of the bill, Dr Amin asserted that there is uncertainty among investors who would want to invest in Ghana, because they were not sure of what the final content of the Bill would be when it is finally passed.

“Currently, the PNDC Law 84 does not allow a lot of companies to compete so the feeling among most investors is that the government gives contracts to companies it likes; to those who have connections with power protocols. So it is like there is no level playing field for them to compete,” he said.

Rushing contracts

Several concerns have been raised about the ratification of oil contracts by Ghana’s parliament under “certificate of urgency”, although according to experts there was nothing wrong with Ghana’s oil sector that warranted signing contracts in a rush.

The rush conditions, they explained gave room for suspicion to the effect that they wanted to avoid being caught up by the E&P Bill.

“The oil is in the ground and there is no rush for it, and moreover oil contracts are signed for 25 or 30 years, so why would parliament rush to sign these contracts. Is it that the company is so extraordinary that parliament would suspend its standing order just to ratify the agreement,? he quizzed.

He however explained that parliament does not ratify oil contracts under “certificate of urgency” as it is widely reported but instead it sometimes suspends its standing orders to approve oil contracts.

“Parliament is expected to ratify all international contracts and since petroleum contracts are international, it goes through parliament. Per its standing order, they are expected to debate on the contract 48 hours after notice of the motion, but we have seen cases where parliament suspended their standing orders to ratify oil contracts and that is what some people refer to as ‘certificate of urgency’,” he explained.

Source: http://graphic.com.gh/business/oil-gas/52237-interest-in-oil-contract-disclosure-intensifies.html#sthash.LZrET5df.dpuf

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Reporting Oil and Gas project was launched on 4th June 2009atTakoradi, Western Region, Ghana by Penplusbytes (PPB – www.penplusbytes.org) with the vision of providing a one stop online information and knowledge about Ghana’s oil and gas sector
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