The Africa Centre for Energy policy (ACEP), a policy and economic think tank, says there is so much murkiness and corruption in the oil and gas industry, as oil blocks are dished out to petroleum retail companies.
According to the think tank, these petroleum retail companies, most of them from Nigeria, have no experience in the management of deep water field, yet they are the companies “we are giving oil contracts.”
The Executive Director of ACEP, Dr. Mohammed Amin Adam, revealed that the process of awarding Ghana’s oil blocks is fishy, thus the need for transparency along the contract value chain.
He said the contract awarding process is so corrupt and shrouded in extreme opacity and secrecy, to the extent that if Ghana does not take care, it may end up as an oil-cursed nation.
“Ghana must avoid the curse of oil, and the only way we can avoid the curse of oil is to open the process of giving out oil blocks… so that we can attract the best companies to Ghana,” cautioned Dr. Amin Adam.
He was speaking at a stakeholders’ forum on the topic: ‘Open Contracting in the Oil and Gas Industry’, organised by ACEP in Accra.
He, therefore, called for the establishment of a progressive regime that will establish an open and competitive bidding process, as the yardstick for the award of future oil contracts.
“Open contracting means transparency along the contract value chain,” he stated, as it would send a signal that attracts quality investors, warning; “The lack of it breeds corruption and investments that do not pursue the public interest.”
The Petroleum (Exploration & Production) Bill 2014, which is before Parliament waiting passage into law, attempts to address the problem associated with the application of administrative processes in petroleum licensing.
Clause 10(3) of the Bill establishes an open and competitive tender regime for the acquisition of oil blocks.
But, Dr. Amin Adam notes that they, at ACEP, have serious issues with the Bill in its current format, as it contains certain exceptionally mysterious clauses that defeat the idea of transparency and accountability.
Ghana, at the moment, does not apply the open and competitive public tender process in oil concessions –what it applies is the administrative process, where oil concessions are awarded based on discretionary power.
“We are not comfortable with the current state of the bill, especially, relating to the contracting process.
“This is the first time the bill is introducing that, unfortunately there are other provisions in the bill which undermines the proposal for open and competitive bidding. For instance, the Minister has the power to veto the outcome of an open and competitive bidding process, and to use sole-sourcing to award a contract in the oil sector,” he announced.
Whilst c.10 (3) establishes an open bidding regime, he explained, c.10 (4) gives the Minister the leisure to ignore the outcome of an open and competitive tender process, and to use direct negotiations.
The dangers associated with this process are many, he stated, warning, that the Minister may use his power to shield companies that do not want to go through competitive process, and turn back to negotiate directly with them.
Also he observed that the process may be used to expose the terms offered by competing companies to give competitive advantage to those that prefer direct negotiation.
However, the Ministry of Energy has explained that those clauses are necessary, since they may not find any of the competing companies satisfactory, in terms of the technical and financial capacity.
African Eye News.com
