The Africa Center for Energy Policy (ACEP) has urged government to immediately review all existing Petroleum Contracts and their deliverables to ensure that companies who are not complying with their contracts are sanctioned appropriately.
According to ACEP, of the 15 active Petroleum Agreements (beyond the producing fields of Jubilee, TEN and Sankofa), only two companies AKER and ENI have delivered on their obligations.
Commenting on the state of contracts in the petroleum sector during the launch of ACEP’s 2019 Petroleum Contracts Monitor, the Executive Director of ACEP Benjamin Boakye said by hijacking and not fulfilling their obligations on oil blocks, some oil companies are denying the country proceeds that could have been received.
“In 2016 you gave a block to Eni and in 2019 they have made a discovery. That tells you that if you bring in capable companies they will be able to operate their given fields, drill and discover oil. So simply the situation we are faced with is that the companies who are giving excuses haven’t really shown capacity to exploit the blocks. They are simply incapable of delivering on the contractual obligations between those companies and Ghana. It becomes important for us to take a second look at those contracts to ensure that if they are not delivering then we go the route that will allow companies that are capable to come into our waters and ensure that Ghana can produce more oil.”
The current list of petroleum agreements in Ghana include but not limited to PA’s between Ghana and companies like Erin Energy Ghana Limited, Amni International Petroleum Development Company, AGM Petroleum Ghana Limited, Sahara Energy Fields Ghana Limited, Eni Ghana Petroleum, UB Resources Limited among others.
Recommendations from 2019 Petroleum Contracts Monitor
Apart from calling for the immediate review of existing petroleum agreements to ensure non-compliant companies are sanctioned, ACEP’s report also advised that future PAs should detail out the specific activities for each phase with timelines to ensure that contractors progress along a defined activity chart which will feed into the assessment for extension. The report also noted that the Ghana National Petroleum Corporation (GNPC) should be firm and demand compliance with minimum work obligations among other recommendations.