The Africa Centre for Energy Policy’s (ACEP) petroleum monitor report on the performance of active petroleum contracts for 2019 has revealed that, only three out of the 15 entities that had petroleum agreements in Ghana, were able to deliver on their contractual obligations.
Following this, ACEP, is calling for a thorough appraisal of all petroleum agreements and repeal all non-performing contracts for the benefit of the country.
Addressing the media at a press conference on 13th May, 2019, in Accra,
the Executive Director of ACEP, Mr. Benjamin Boakye, intimated that, of all the entities, Tullow Ghana Limited, ENI Ghana and Aker Energy Ghana Limited, were the ones that had been productive, while as the other 12 failed to drill a well, in spite of holding on to the oil blocks.
Mr. Boakye, said, it’s about time the country came out with a bold decision in order to make those non-performing entities work hard for the country to produce enough oil. “The evidence from many of the existing contracts does not paint a sustainable picture for the industry because many of the companies have not delivered on the agreements signed with Ghana,” he added.
Mr. Boakye noted that, “The government has, for the past two years, been making the point that the contracts will be reviewed and non-performing ones abrogated, but nothing has been done so far. But the point is that if we fail to take steps to add to our production profile, it will be dangerous for us as a country because we rely so much on oil revenue.”
However, he underscored the need for performance benchmarks, imposed on all phases of petroleum contracts, even before entering the contracts, to ensure capable companies were awarded with contracts.
He also explained that, “If contractors fail to deliver on their work programme at any particular time, the GNPC should demand the payment of the unspent balance of the minimum expenditure requirements. The GNPC is currently operating two offshore blocks and the government has given an additional block to the corporation to explore for oil. This has the risk of exposing the company to financial challenges or encouraging non-performance on the oil blocks if the GNPC is not able to respond to cash calls.”
This, Mr. Boakye said, calls for an open bipartisan deliberations on the level of investment GNPC could accumulate during exploration and production of oil.
Meanwhile, commending the government for the introduction of the competitive bidding regime for oil blocks, as per the Exploration and Product Act, 2016 (Act 919), Mr. Boakye, urged the government to be very transparent in the process of awarding the contracts on the two oil blocks, reserved for direct negotiations through the Ministry of Energy.