Anti-corruption clauses in oil and gas contracts needed – Amin Adam

Dr. Amin Mohammed the Executive Director of Africa Centre for Energy Policy has emphasised a credible long-term national development plan to save the country from inappropriate decisions with regards to oil and gas local content.

Dr. Adam was delivering a speech on the topic, ‘Transparency and Accountability in Local Content Implementation’ at the maiden edition of BTA-Petroleum Commission Black Gold Summit on Local Content held at the coconut grove regency hotel in Accra. Black Gold summit is an outstanding biannual platform by BTA to carve a niche for itself as a media partner in the oil and gas industry.

This maiden edition brought together key stakeholders from Ghana’s oil and gas industry who addressed a variety of topics under the theme ‘strategic implementation of oil and gas local content in Ghana’.

Sharing his experiences as a politician over the years, Dr Amin Adam stressed that separating the functions of technocrats from politicians when it comes to decision making processes for instance within the petroleum industry. According to him most decisions taken by politicians are based upon consultations with the technocrats.

“So in the long run, politicians end up blaming technocrats for most of the failed decisions they make whiles in office, It is upon this backdrop that we hear the shifting of the blame between ‘politicians and the technocrats’ as to who failed to do due diligence”. Dr Amin opined. He said the only thing that can save the country is credibility. “We need a national plan that is owned by all of us and which is credible so that politicians and technocrats may not have the opportunity to use vested interest in deciding on how this country should develop.’’

This, he said, would minimize the indecisions…’’ attributed to politicians and in some cases technocrats.

Sharing his thoughts on transparency and accountability in the local content policy implementation in Ghana Dr. Amin stressed the importance of recognizing the risks associated with secrecy, especially in the oil and gas industry and noted that he who talks about transparency must be transparent himself.

“The oil and gas industry is a high value industry which requires huge sums of capital to execute projects with high risks. It is upon this that both the private investor and the public officials should do due diligence before signing agreements to ensure that both parties benefit in the long run” he added.

He said in a situation where both parties fail to do this, the state could lose several millions of dollars. For instance he said if Ghana lost just 1% during the negotiations on the Jubilee Field that would amount to about 700,000 barrels of oil over the 20years life cycle of the Jubilee Project.

Dr. Amin proposed that ‘the frame work of the policy must provide equal opportunities for all Ghanaians and indigenous firms to benefit from the resources of the country”. He said this isn’t the case now in Ghana. The ACEP boss blamed the situation on the lack of transparency and shoddy deals done to serve the interest of some particular classes of individuals. He said there is the need to integrate the oil and gas sector with the other industries to make the local content policy more efficient.

Dr. Amin Adam identified the challenge of secrecy contrary to Ghana’s local content regime and attributed this to the failure of some oil companies to comply with the local content policies as stipulated under the contracts they signed.

He also blamed the increasing spate of favouritism or conflicts of interest in decisions of local content in which companies with political affiliates are given contracts. All these he said lead to public officials negotiating for their personal interests rather than that of the nation. He questioned the reasons behind government giving contracts to companies that are eventually parried over by multinational oil companies.

Dr. Amin attributed the difficulty in the local content to the lack of transparency in Ghana’s licensing regime. “The absence of open and competitive bidding for oil block has led to shoddy deals being done behind the scenes” he noted. He recommended the inclusion of anti-corruption clauses in oil and gas contracts that seek to punish public officials who deal illegally in the name of the state.

He also added that there should be public hearing during evaluation of oil and gas contracts to ensure that local stakeholders participate in monitoring the local content plan.

Prominent industry players who addressed the Black gold summit include Dr. Papa Kwesi Ndoum former minister of energy and President of Goupe Ndoum, Dr. J.K.D. Annan the Chairman, National Technical Committee for Oil and Natural Gas, at the Ghana Standards Authority Mr. Patrick Anumel CEO GN Bank, Kwaku Boateng Director of special services at the Petroleum Commission, and Prince Frempong CEO Ghana Oil Drilling Academy and Consultancy (GODAC).

A second version of the summit is scheduled for the Western region before the end of the year. The 1st BTA petroleum commission black gold summit was sponsored by Ghana Growth Fund Company (GGFC) a subsidiary of Groupe Nduom with support from ENGEN Petroleum Ghana and Technip Ghana.