Delays in passage of E&P Bill negative — GHEITI

The Ghana Extractive Industry Transparency Initiative (GHEITI) has recommended the swift passage of the new Petroleum Exploration and Production Bill (E&P) to ensure good governance in the upstream petroleum sector. 

In its 2014 report, the monitoring body said any further delay in the passage of the much improved law meant the country would be handicapped in dealing with any potential reccurrence of disputes it had with certain players in the industry over certain matters. 

According to the GHEITI, the rationale for replacing Petroleum Exploration and Production Law 1984 (PNDCL 84),with the new E & P Bill was to address identified limitations in the existing law.

“Experience since oil production started has shown that PNDCL 84 is incompetent in addressing issues or proprietary rights over geological and seismic data, the right of first refusal, liability for spill of oil in operational areas etc,” it said.

After Ghana discovered oil in 2007, the government and its development partners during an oil for development conference recognised that the PNDCL 84 was not fit for purpose and so recommended it either be replaced or amended. The government has since 2008 been working on replacing the old law.      

E&P still under discussion

The Petroleum Exploration and Production Bill (E&P) is aimed at ensuring good governance in the petroleum sector. It has remained on the shelves six years after its formulation. The bill has left the committee level of Parliament and gone through the second reading.

Sector observers have said a continuous delay in the passage of the bill cannot guarantee Ghana the right to ‘fight’ any company should anything occur. 

The civil society co-chair of the Ghana Extractive Industry Transparency Initiative GHEITI, Dr Steve Manteaw, in an interview questioned why the new bill was competent but had not been passed. 

He said the current PNDCL 84 was inadequate in dealing with issues associated with the sector. 

“It is surprising that Ghana discovered oil in 2007 and has since 2008 been working on the replacement of the PNDCL 84 after the government and its development partners recognised that it is not fit for purpose during an oil for development conference which set the pace for the development of the policies and laws to govern the petroleum industry,” he questioned. 

Sector observers suspect there is a certain interest in ensuring it is not passed. Currently, contract negotiations in the oil and gas sector under the PNDL 84 does not mandate competitive bidding, as one can see officials and they will be awarded the contract. 

“But the moment the E&P bill is passed, that thing will stop. The E&P bill commits us to open competitive bidding; so if you are a minister, the incentive for you to pass will not be there because the current law gives the minister a lot of discretion,” he said.

Consequences of the delay

In the early days of its operations, one of the Jubilee Partners spilt toxic mass in its operational area and the government wanted to impose sanctions on the company. They ,however, challenged the government to show in its laws where liability for pollution was placed on the company, and since there was no such provisions, government lost the fight. 

Dr Manteaw also added that, “when Kosmos wanted to sell its stake to Exonmobil, the government said it had a right of first refusal, hence the company should offer it to Ghana first and if Ghana does not want it before it can be offered to a third party. They asked us to show in our law where it says that the right to first refusal was stated.” 

Citing another instance, he said, disclosure of privileged geological data to third party was not allowed without the approval of the Ghana National Petroleum Corporation (GNPC), adding “we challenged them to pay and they said it is not in our law.”

According to him, the new E&P Bill had taken into consideration such consequences and made provisions for them, and the delay therefore will not put the country in a position to deal with the issues. 

“Now, if we continue to delay the bill and cosmos spills today, we cannot hold them to it because the current law, PNDCL 84 is inadequate in dealing with these issues. This is what we stand to lose and if anything should occur, Ghana cannot use it to fight any company,” he said.  

The way forward

With pressure mounting on the government from all angles to pass this bill, Dr Manteaw said civil society organisations would continue to advocate for the swift passage of the bill. 

“We can only continue to advocate and put pressure to ensure that those who have to work do so and on time,” he said. GB