Energy Minister Could Be Influenced In Awarding Petroleum Contracts – Analyst

Policy Analyst, Dr. Steve Manteaw, says the discretionary powers given to the Minister for Energy not to enter into a Petroleum Agreement after a bidding round, exposes the minister to corruption.

He observed such allocated powers to the minister place him as a target for investors seeking opportunities in the upstream petroleum sector.

“So much power has been allocated to the Minister and this makes it easy for him to be influenced by investors seeking opportunity in the upstream petroleum. They will head straight to the minister’s house and try to compromise him to exercise that power”.

Section 10 (3) of the Petroleum Exploration and Production Law states that Petroleum Agreement shall only be entered into, after an open, transparent, and competitive public tender process.

However, the Minister has discretion, on grounds of stated reasons, not to enter into a Petroleum Agreement after a bidding round.

Again, section 10 (9) grants discretion to the Minister, in consultation with Petroleum Commission, to enter into Direct Negotiations without public tender where such approach represents the most efficient manner to achieve optimum returns or outcome.

Speaking at a GIZ-funded workshop for Institute of Financial and Economic Journalists at Akosombo, Dr Manteaw who is a member of Public Interest and Accountability Committee (PIAC) described as worrying the many discretionary powers given the Minister.

He stressed on the need to limit the grant of discretionary powers to the minister and ensure most of the petroleum agreement decisions that have to be made are fixed in the law.

“If we can take a bit of the power away from the minister and put that power into the law it even helps in the negotiation process.

“Let’s fix more of the fiscal regime in the law rather than assigning it to the discretion of the minister” he advised.

Analyzing a petroleum agreement recently signed by Ghana and ExxonMobil, Dr Manteaw, said the country did not get the best of deals because there was no effort to conduct a bidding round.

“The ENI agreement which was signed ahead of ExxonMobil has Carried and Participating Interest totaling 20% while ExxonMobil said to be the best has 18% Carried and Participating Interest,” he noted

He noted competitive tendering yields the best results in block allocation in the upstream petroleum sector.

“No doubt ExxonMobil is a big company with the financial muscle and technical superiority but we did not get the best deal in the transaction.

“Competitive tendering yields the best result, that’s why the framers of the law ACT 919 made competitive tendering the default position for block allocation in the upstream petroleum sector” he said

Dr Manteaw is of the view Ghana can get the best out of companies like ExxonMobil by pitching them against their rivals like BP and Chevron.

Members of the Institute of Financial and Economic Journalists (IFEJ) were taken through critical assessment of the strength and weaknesses of the ExxonMobil Petroleum agreement by Dr Manteaw at a training workshop in Akosombo.

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