General News of 2013-12-08

Parliament criticized for ratifying oil exploration contract

Parliament has been criticized for ratifying a controversial multi-million dollar contract touted as one of the biggest oil exploration deals ever considered by Ghana, since the discovery of oil in 2007.

Oil and Gas firm, AGM Petroleum Ghana Limited won the contract to explore oil and operate the South Deepwater Tano Block (SDWT), offshore Ghana.

The ratification followed the approval of the Agreement by the Cabinet of the Government of Ghana and a review by the Parliamentary Select Committee on Mines, Energy and Petroleum.

The ratification also grants the parties involved the exclusive right and authority to carry out all petroleum exploration, development and production activities in the South Deepwater Tano Block.

But civil society group - Africa Centre for Energy Policy ACEP has argued that the company, which is barely a year old, lacks the pedigree to execute the deal in the best interest of Ghana.

Benjamin Boakye, Programmes Director of the Centre, speaking to Joy News said Parliament failed to do a good job in ratifying the deal.

"It's not a good deal. For us we thought that Parliament needed to do much better work to look at the partners in their financial commitment, their capacity to operate on such a deep block and that we are afraid was not done properly," he stated.

Benjamin Boakye added that, "We looking at partners who are trying to experiment with our oil industry and that was very unfortunate. AGM, which is going to be the driller, and they are known to be doing so, they are not an operating company, they are only a service company, we are now giving them a responsibility to come and operate a field in Ghana..."

"And that we think that Parliament could have gone deeper into analyzing some of those companies in there to make sure that they have the capacity and the financial muscle to actually operate such a deep block but that wasn't done."

But, the Integrated Social Development Centre, another civil society group with expertise in the oil and gas industry disagrees.

Dr. Steve Mateaw, Campaign Coordinator with ISODEC told Joy News, "It looks very likely that we can avoid the situation where we would have [regretted] steps that we've taken in time past."

This is precisely because we did raise some concerns about the AGM contract and we've received assurances. On the face of it, I think the AGM contract is an improvement on previous contracts sometimes we get overly ambitious in terms of what we want out of this," he added.

The ISODEC Campaign Coordinator further explained that, "For me, what is assuring in terms of the AGM contract is the fact that it has built into it an arrangement that mentors GNPC into becoming an operator on its own and this you can't get for free anywhere."

"I recognize the fact that we would have gained a bit more in terms of the physical regime," he conceded.

According to him, what makes the deal an optimistic one is the fact that there is a big player in the AGM contract, AGR of Norway, which has a lot of expertise in the industry and they have taken it upon themselves to mentor GNPC to into becoming a full fledge operator in the near future.

He however challenged the Ghana National Petroleum Corporation and the Ghana Petroleum Commission to ensure the terms of the oil exploration contract is executed to the letter.