Adopt production sharing agreement – GIGS boss

The Executive Director of the Ghana Institute of Governance and Security (GIGS) Mr. David Agbee has said that Ghana’s continued adoption of the Modern Concession system of operation in her oil and gas industry would deprive the country of immense benefits she would otherwise have derived from those resources.

In a press release copied to the Ghana News Agency (GNA), the Executive Director said operating on the prevailing Modern Concession system was not in the country’s best interest, explaining that Ghana earned only $1.77 billion in three years from her oil resources, while foreign oil companies earned $7.590 billion.

He estimated that if Ghana was operating under the pure Production Sharing Agreement (PSA), the country would have earned about $4.3 billion as at the end of 2013.

Mr. Agbee maintained that Ghana would earn over US$50 billion in 20 years as against the $20 billion and $19 billion projections made by the IMF and World Bank respectively, adding that his outfit was ready to demonstrate to Ghanaians how the $50 billion could be earned in 20 years under the Production Sharing Agreement.

He said in the 1970s, Nigeria had to shift from the Modern Concession to Production Sharing Agreement policy because the former had landed that country in huge debts, and cautioned that Ghana could find herself in the same unpleasant situation if she did not learn from Nigeria’s experience.

“There is no doubt that the adoption of PSA would generate enough revenue for the government which would bring about massive infrastructural development, provision of potable water for rural communities, affordable housing and health facilities that would impact positively on the living standards of Ghanaians”, Mr Agbee said.

He stated that the conservative estimated value of oil in the Jubilee Field was about two billion barrels which was worth over $160 billion, and with that money government would be capable of reducing taxes on essential commodities including petroleum products.

The Executive Director indicated, however, that this could be achieved only if political leaders and technocrats would abandon their parochial interests and adopt the PSA in the national interest.

He therefore called on Ghanaians to support the campaign for the adoption of the Production Sharing Agreement by parliament in crafting the country's petroleum bill.