Business News of 2014-07-30

‘Proceeds from Oil disappointing’

A senior research officer in oil and gas at the Ghana Institute of Governance and Security, Solomon Kwawukume, says Ghana would be entitled to a meager 19.8 percent of proceeds from its oil resources over the whole period that the commodity would be mined by foreign investors.
Mr Kwawukume disclosed this at a workshop for parliamentary reporters on the oil industry in Accra on Monday.
According to him, foreign oil companies working at the Jubilee Oilfields have to date recouped a capital investment of $3 billion and made a staggering profit of over $5.4 billion while corporate Ghana has realized only $2.1 billion from the proceeds after a little over three years that oil production commercially began in Ghana.
He was particularly peeved at politicians who signed up to the exploitative Modern Concession Law that was forced down the throat of corporate Ghana by the World Bank and the IMF.
He said the incumbent has succeeded in changing some aspects of the oil agreements with foreign companies resulting in a situation whereby Ghana’s future appears to have been sold to foreign interests.
Mr Kwawukume said if government had signed up to the Production Sharing Agreement (PSA) that was being adopted by all African oil-producing countries including South Sudan where there is instability, Ghana would have received an extra $2 billion from the oil proceeds over the same period.
“The Production Sharing Agreement would have given Ghana between 44 percent and 48 percent of the oil proceeds, which is more equitable and fairer,” he said stressing that as of now the foreign companies were completely shortchanging Ghana.
However, he said there was hope for Ghana since the PNDC Laws 64 and 84 allowed for Production Sharing Agreement and the re-negotiation of Ghana’s oil terms.
He also spoke against Government’s attempt to ‘quash’ that window of hope by introducing the Petroleum Exploration and Production Bill (2013) which is said to have been approved by Cabinet and is yet be presented to Parliament for ratification.
He said if Parliament approves the draft bill, it would mean Ghana’s future would have been mortgaged to foreign interest who would be carting away more than 80 percent of Ghana’s oil reserves of two billion barrels worth $160 billion.
He therefore called on all civil society organizations, religious leaders, workers and the Trades Union Congress to mount a sustained campaign and impress on parliamentarians not to approve the Petroleum Exploration and Production Bill (2013) and ask Government to withdraw the draft bill for the sake of future generations.
Source: Daily Guide
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