IMANI report reiterates need for transparency in petroleum resources management

IMANI Centre for Policy and Education study report published on Thursday has reiterated the need for transparency in the management of the nation’s oil and gas resources.

The report dubbed “Effects of Upstream Gas Contracting on Electricity and Inclusive Growth – The Case of Sankofa-Gye-Nyame (SGN) Gas Project”, which was purely an academic exercise was conducted from 2018 to June 2019.

It revealed that the assessment of the contracting process for the SGN gas deal against best practice for contracting suggests that the contract was procured under circumstances that were not sufficiently transparent.

It would be recalled that Government, the Ghana National Petroleum Corporation (GNPC) and Heliconia Ghana Limited entered into an agreement in respect of the Offshore Cape Three Points Petroleum Agreement (OCTP) governing the OCTP oil and gas project in March 2006.

The current operator, ENI Ghana Exploration and Production, was brought into the OCTP Petroleum Agreement (PA) in September 2009.

The operator is Eni Ghana Exploration and Production (44.44 per cent), along with its partners Vitol Ghana Upstream (35.56 per cent) and the GNPC (20 per cent).

Offshore Cape Three Points (OCTP) is an integrated deep-water project in Ghana split into two stages: the development of first oil, then gas deposits.

The study indicated that some of the resultant contract terms pose potential dire future consequences and high gas price might jeopardise the attainment of national goals for which the gas was being exploited.

Findings of the study were made known at a press briefing in Accra, jointly by Mr Dennis Asare, Research Assistant, IMANI and Madam Barbara Andoh, Research Associate, IMANI.

According to the report, in the SGN negotiation process, there were no available information on the composition of the team, no publicly available records of key milestones attained and no publicly verifiable reports of negotiation meetings.

With regards to outcomes, the study mentioned terms motivated by rent-seeking, inflated service contracts and inflated development contracts.

Madam Andoh said the upstream contracting process for natural gas in Ghana had not sufficiently incorporated transparency as international best practice demand.

She said the result of this was gas price that might jeopardise national goals for power generation and lead to high electricity tariffs.

On his part, Mr Asare urged the government to ensure that the methods of allocating rights to petroleum explorations were more opened; by allowing stakeholders to scrutinize the agreement before it was endorsed.

The study recommended that it was important to follow international best practice for transparency in the upstream contracting process for gas.

It said incorporating transparency in the contracting process holds potential for averting signing non-beneficial contracts.

It urged the Government to consider amending Acts 919 and GPR LI2359 to mandate the public disclosure of key documents related to the contracting and negotiations process.

Mr Frankin Cudjoe, Founding President of IMANI Africa, said the study was purely an academic exercise, which sought to find out the effects of upstream gas contracting on electricity and inclusive growth.

Mr Alex Mould, a former Chief Executive of the Ghana National Petroleum Corporation (GNPC), however, debunked the IMANI study report, saying that due diligence was followed to ensure transparency in the Petroleum Agreement (PA).

He said the World Bank wouldn’t have committed $700 million into the SGN gas project if it was not transparent.

Mr Victor Kofi Sunu-Attah, Manager, Development and Production, GNPC collaborated what Mr Mould said.

“On the transparency issue, there is one area, which I didn’t hear you mention and that area is the role that the World Bank played in the gas sale agreement. I think in my view, and everybody, NGOs trusts the transparency values of the World Bank. And the World Bank was central to this agreement,” he said.

Mr Sunu-Attah said all the stakeholders who matter in the petroleum sector in the country were involved in the negotiations of the PA before it was finally approved by Parliament.

He noted that IMANI study was not telling the true story to Ghanaians.

Mr Baluri Bukari, Local Content and Sustainability Manager, ENI, said before the agreement was reached, they had 43 rounds of negotiations across the globe, of which some of them were held with the World Bank.

He said Ghana took the right decisions for sanctioning the project; declaring that “today as we speak, Sankofa is producing 140 million standard cubic feet per day (mmscfd), some of which is being supplied to Tema for electricity generation.