Business News of 2014-07-23

Oil: Experts query speedy award of contracts

Some energy experts say they are worried over Parliament’s speedy passage and granting of contracts signed for the operation of oil blocks in the country.
They are worried over recent ratification of oil contracts under certificates of urgency by Parliament.
According to the experts, the rush conditions under which the contracts are signed “gives room for suspicion to the effect that they wanted to avoid being caught up by the Petroleum Exploration and Production Bill.”
With growing interest in mining, oil and gas contracts on the part of concerned citizens around the world here are increasing calls for transparency in state-investor contracts.
Given the history of government corruption and mismanagement of extractives, coupled with environmental degradation, it hardly comes as a surprise that calls for better management of and more corporate responsibility in the extractive sector are louder.
Speaking to The Finder on the sidelines of a forum on the oil and gas sector held recently in Accra, the Chairman of the Civil Society Platform on Oil and Gas, Dr Steve Manteaw threw a caution to legislators to appreciate the need to take pains in examining oil contracts that come before them.
"To avoid making mistakes, Parliament rather must take its time in ratifying contracts,” he added.
The forum, organised by the International Institute of ICT Journalism (Penplusbytes), was on the theme ‘Assessing oil and gas in Ghana, Governance and Accountability Framework,’ and was attended by selected journalists.
Dr Manteaw stressed: "In the same manner that the House invites memoranda from the public on bills that come before it, our parliamentarians can also invite citizens working in the oil and gas sector to share what they know about particular companies who apply for contracts to be assisted to do the proper due diligence."
According to him, there are also issues with the non-disclosure of beneficial owners of the oil licenses.
Dr Manteaw, who is also the Country Director of the Ghana Chapter of the Extractive Industries Transparency Initiative (GHEITI), however, hoped that “ as the EITI new standard begins to bite and compels Ghana to now disclose the beneficial owners, we will be forced to comply.”
Concurring, Executive Director of energy think-tank, Africa Centre for Energy Policy (ACEP), Dr Mohammed Amin found it strange that Parliament could effectively scrutinise six Petroleum Agreements (Pas) and approve them in two days.
The think-tank noted that the approval of the six new PAs brings to eight PAs approved within four months, “usually without effective scrutiny.”
“All these firms are Nigerian companies, most of them minnows with little experience in offshore exploration. For most of them, their experience is limited to the operation of marginal fields, which is not what Ghana should be looking for at this stage of our oil industry,” the release stated.
“We strongly believe that government is rushing these petroleum contracts to Parliament to avoid the public scrutiny required in the new Petroleum (Exploration and Production) Bill,” Dr Amin maintained in a press release issued last Friday.
Source: The Finder
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