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09.12.2010 Business & Finance

Oil Bill Suffers Setback

By Daily Guide
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THE PETROLEUM Revenue Management Bill is set to suffer a major setback as Minority Members of Parliament have called for its withdrawal from the House.

It is feared the Bill, which is supposed to provide the regulatory framework that will guide the efficient collection, allocation, and management of petroleum revenue, will not be passed before the first production of oil from the Jubilee Field in about two weeks time.

Speaking on the floor of Parliament yesterday, the New Patriotic Party (NPP) MP for Sekondi, Papa Owusu-Ankomah, yesterday called for the withdrawal of the Bill to allow government to clarify its position on some controversial clauses.

There are more than 200 proposed amendments to the Bill, partly because of government's ambivalence on certain controversial clauses.

Government appears to have a 'double tongue' as regards Clause 5 of the Bill, which 'prohibits the use of the Petroleum Account for the provision of credit to government, public agencies, and private sector entities and adds that there is not to be future borrowing against proven petroleum reserves.'

The ruling National Democratic Congress (NDC) is now backtracking from its own sponsored Bill, as Vice President John Mahama has already made a commitment, subject to parliamentary approval, to use the nation's oil as collateral to receive loans from Pierson Capital Group, a Chinese firm.

Consequently, the governing NDC, through its MPs, is proposing amendment to Clause 5 to allow them to use proven oil reserves as collateral for loans.

But Papa Owusu-Ankomah, who is also a former Attorney-General and Minister of Justice, contended that it was not a good legislative practice to push Parliament to change a major policy decision of government in a bill.

'Government should withdraw the Bill and state its position clearly on the matter before it's brought back to parliament,' Papa Owusu-Ankomah admonished, pointing out that 'this should not be seen as a defeat politically.'

Ruling on the matter, the First Deputy Speaker, Edward Doe Adjaho, directed the House's leadership, the joint Committee on Finance, and Energy and Mines, to deliberate on the thorny issues and report back to the House.

The Minority in Parliament believes there are inherent dangers in allowing the nation's oil resources to be used as collateral for loans, particularly when oil is a finite commodity.

Joseph Kofi Adda, MP for Navrongo Central and Minority spokesperson on Energy, had earlier proposed a private members' motion to ask government to withdraw completely from parliament, the Petroleum Revenue Management Bill and the Petroleum (Exploration and Production) Bill.

In an interview with DAILY GUIDE, Kofi Adda argued that it will not be prudent to pass the Petroleum Revenue Management Bill before the Petroleum (Exploration and Production) Bill.

According to the former Energy Minister, the Petroleum (Exploration and Production) Bill is currently in limbo because government had violated Article 269 (1) of the 1992 Constitution regarding the country's natural resources.

Government, the Navrongo Central MP pointed out, had reneged on the constitutional provision in bringing a bill for Parliament to pass an Act to establish a commission, which shall be responsible for the 'regulation and management of the utilisation of the natural resources concerned and the coordination of the policies in relation to them.'

The country, he noted, could only get revenue from the petroleum that would be produced, adding that it would not be prudent to pass an Act to manage the oil revenue when there was no law to regulate the exploration and production of the resource.

'It is an acceptable that after two years in office, the NDC administration has not been able to finalise all the oil bills for parliament to pass into law.

'All these point to the fact that they are not able to handle the energy sector very well and they are leading the nation into making this oil resource a curse,' the former Energy Minister lamented.

The apparent inefficiencies and delays, according to Kofi Adda, 'Seem to give credence to the suspicion that there is a hanky-panky business in the oil sector.'

By Awudu Mahama

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