This is contained in the Ghana Extractive Industries Transparency Initiative (GEITI) Report on the oil and gas sector for 2014 released here recently.
Boa Amponsem of Boas & Associates, the independent administrator who produced the report in an interview with Xinhua observed the current practice where oil blocks were awarded on first-come-first-served basis was not the best for the country.
He said, “When the E&P Bill comes to place, tendering and bidding will probably come in. Experience since oil production started has shown that the Provisional National Defense Council (PNDC) Law 84 is incompetent in addressing issues or propriety rights over geological and seismic data, the right of first refusal, liability for spill of oil in operational areas etc.
Section 2(2) of the PNDC Law 84, states, “Without prejudice to section 1 of this Law, any person who intends to negotiate for a petroleum agreement for the exploration, development or production of petroleum shall submit an application to the Secretary in accordance with such Regulations and such competitive bidding procedure as may be prescribed”.
The current law mandates the Minister for Petroleum to represent the country in negotiations for and entry into petroleum agreement (PA).
The law in essence requires an applicant to demonstrate technical competence and financial capability.
The independent administrator warned, “Any delay in the passage of the much improved law therefore means Ghana’s inability to deal with any potential reoccurrence of disputes it had with certain players in the industry over these matters.”
After five years of oil production, the country still operates with PNDC Law 84 promulgated in the 80s to regulate the country’s then small oil field.
However, with the discovery of oil in commercial quantities, experts in the industry have described the law as obsolete and not able to address major issues in contemporary times.
They have therefore called for its abolition for an E&P Bill to avoid controversies that PNDC Law 84 has failed to address.
Co-Chair of the GEITI and member of the civil society platform on oil and gas, Dr. Steve Manteaw highlights some positives of the bill yet to be passed into law.
“That bill commits this country to open competitive bidding round, provision on contract transparency and openness in the contracting process. We will have access to the contracts entered into on our behalf,” he said.
Ghana has begun the process to amending PNDC Law 84 and currently the E&P Bill has gone through the first reading in the country’s legislature.
Story Francis Tandoh