Parliament Should Reject Fiscal Provisions In Draft Petroleum (Exploration And Production) Bill

Ghana Institute of Governance and Security deem it necessary to issue this Press Release on the Emerging Upstream Oil and Gas Industry in Ghana and a call upon government to lay the Petroleum Exploration and Production Bill before Parliament.

It has come to our notice that this call is being orchestrated by individuals and groups who do not have the interest and progress of this country except themselves. They do not care what happens to the mass of Ghanaians. We have observed serious challenges and implications passing the Bill in its current forms to regulate the Upstream Industry, having dire adverse consequences on Governance and Security, a situation which will eventually lead to insecurity and instability.

We have considered the fiscal provisions contained in the Bill and have come to the conclusion that it will never ever make Ghana derive the full maximum benefits from the oil resources, God has bestowed upon us. The fiscal provisions we realised is crafted to fall in line with the current prevailing system, the Modern Concession a hybrid between the old traditional concession and Production Sharing Agreement in implementation, but in all essence it is a Concession – giving away our Birth Right – God's gifts to us. It is the current prevailing system which earned us under US$1.8 billion in 3 years while the Foreign Oil Companies earned US$7.590 billion.

It is our believe that the current prevailing system under which the companies are currently made to operate which the Bill seeks to consolidate into law is the cause of this and on careful analysis would not be in the best interest of the country. We believe the introduction and application of pure Production Sharing Agreement (PSA) would be in the best National Interest with the nation fully benefiting from her oil and gas resources. For example if Ghana was operating under PSA, the country would have earned about US$4.3 billion.

The PSA is a progressive, fairer and equitable fiscal arrangement in sharing oil revenue currently in the world over. Angola, Nigeria, Cote D'Ivoire, Cameroon, Republic of Benin, Liberia, Mozambique, Niger, Chad, Togo, Sudan, and South Sudan Tanzania, Kenya, Egypt, Algeria, Libya, Equatorial Guinea and Gabon to name a few in Africa.

Brazil, Bolivia, Peru, Ecuador in South America; Trinidad & Tobago, Guatemala, Cuba, Belize in Central America and Caribbean; Qatar, Jordan, Syria, Yemen, Bahrain, Oman in the Middle East; Indonesia, Malaysia, Philippines, East Timor, Vietnam, China in Asia; Albania, Bulgaria, Croatia, Georgia, Romania, Azerbaijan in Eastern Europe are example of countries operating their oil and gas resources under PSA. Ghana cannot claimed to be wiser than all these countries especially our neighbour Nigeria.

The leadership of our Institution have seriously taken keen view about these observations and we consider that the matter should be put to a wider public discussion and debate to determine what would be beneficial to Ghana's wider interest and needs not to compromise the security of this nation. We also believe as an Institution, these would go a long way to enhance Ghana's noted democratic credentials and good governance as well as transparency which in the long run would lead to a stable and peaceful nation.

We therefore call on Parliament to reject the fiscal provisions in the draft Bill when it is laid. Parliament should also demand from Government to bring in an independent international expert to review the draft Bill to include proper and pure Production Sharing Agreement Fiscal Regime or arrangement to regulate our Upstream Oil industry.

God Bless Our Homeland Ghana

David Agbee
Executive Director,
Ghana Institute of Governance and Security
+244 726592

Solomon Kwawukume
Senior Research Officer,Oil & Gas
+0246449104