Oil bidding process shady – ACEP

The African Centre for Energy Policy, (ACEP), an energy think-tank, has called on the government to ensure an open and competitive contracts bidding process in the nation’s oil sector.

The Executive Director of the Centre, Mohammed Amin Adam, who made this call in Accra yesterday at a public lecture jointly organized by the Ghana Centre for Democratic Development (CDD-Ghana) and ACEP under the theme, ‘Managing Windfall wealth: How Oil Resources Can Generate Development Rather Than Decay,’ disclosed that government had persistently stifled openness and accountability in the bidding process of oil contracts in the country.

Mr. Adam observed that Ghana had performed well in terms of the framework for managing petroleum revenues but had fallen short in the exploration and production of petroleum.

“Ghana has done well in terms of the framework for managing petroleum revenues but where we are not doing well is when it comes to the petroleum exploration and production side. For instance, we don’t have an open and competitive bidding process for acquiring our oil blocks,” according to him.

“We also don’t have a provision for the mandatory disclosure of bidding of contract, a provision for the mandatory disclosure of those who are the beneficiary companies behind our oil and we don’t have open beneficiary act. So where you have good governance in the management of oil revenue you don’t have good governance in generating petroleum revenues,” he added.

According to him, Ghanaians need to know how contracts were being signed on their behalf of the Ghanaians in the oil sector “because the oil belongs to them and so they have the right to know how it is being used.”

In line with this, he called for a legislation that will mandate the Ministry of Petroleum and Energy Resources to publish documents on the bidding of oil contracts and the legitimate beneficiaries of such contracts.

There is the need for prioritizing of oil fund and government also needs to develop a public investment management plan and public investment management law to guide policy-makers in investing oil fund wisely, he charged.

Speaking in an interview with Business Guide on the sidelines of the lecture on whether the lack of openness in the bidding process was due to government’s desire to fuel corruption in the oil sector, he said, “There is no evidence to say that there is corruption ongoing underground due to the absence of open and competitive oil bidding contract, but the risk of corruption taking place under such atmosphere is high.”

As far as corruption control is concern in the oil fund management, there is the need to have an open bidding and competitive contract system. According to the ACEP Director, Ghana had been found wanting in relation to the spending of oil revenues “because how do you spread so little oil revenues across so many sectors.”

Meanwhile, Professor Larry Diamond of Stanford University, who delivered the lecture called for the direct distribution of oil proceeds to Ghanaians. He urged government to use the oil proceeds to improve the human resource base of the nation.