While investment in the oil industry is important, ensuring that the citizens of an oil-producing country yield the benefits of the resource is even more critical. This is according to Yofi Grant, Chief Executive Officer, (CEO) of the Ghana Investment Promotion Centre, (GIPC).
The investment official, who accompanied Ghana‘s President Nana Addo Dankwa Akufo-Addo on his just concluded State visit to Guyana, shared briefly his nation’s take on the growing oil industry.
While acknowledging that the two nations are at different stages when it comes to oil production, the Ghanaian official said both nations must utilise all avenues to safeguard the valuable commodity.
He emphasised that it is very important that the people of Guyana benefit from its resources.
Grant asserted that, “While oil needs a lot of investment there must be balance. So there are terms and conditions attached to the agreements and contracts, and if the oil companies fail to develop the blocks then there are consequences at some point if you haven’t developed it… then of course, it will be taken away because the resources belong to the State”.
He added that, “It is critical to note that this is an asset that really belongs to the people; you would expect the resource to benefit Guyana more than those who have come to export the resources … So you must leave renegotiation of blocks as an option…”
Grant said that Ghana‘s experience with oil has led the country to develop a comprehensive legal regime to deal with issues from the industry.
He noted that in order to support the implementation of the key laws in the sector, Ghana’s Government, through the Minister of Energy (the Minister) and the Petroleum Commission, has enacted a number of regulations and guidelines, and developed policies for the sector.
The establishment of the state oil and gas corporation, the Ghana National Petroleum Corporation, (GNPC) and the passage of key legislation have laid the foundation and provided the framework for activities in the industry.
Grant noted that the country has adopted a model petroleum agreement based on international best practice to attract suitable investment. He stressed that his country wants the best deal for its people.
Last October, Ghana’s President had charged the Energy Ministry to review critically existing oil exploratory activities and petroleum agreements, as part of efforts to ensure efficiency and transparency in the management of its oil and gas resources.
According to the Ghana News Agency (GNA), the review was to determine oil fields that are sub-optimal, and possibly lead to the termination of the contracts of operators, who persistently fail to meet their minimum work obligations.
“The Ministry of Energy will engage with the operators, after the review, on the adoption of best methods for increasing oil recovery rate,” the President said.
The Head of State had also initiated the first Ghana Oil and Gas Licensing [Bidding] Round, which would permit the allocation of new petroleum rights.
“For Petroleum Agreements that are dormant, the Ministry will encourage the operators to consider inviting stronger partners to join them or risk the termination of these Petroleum Agreements, should they persist in failing to meet their minimum work obligations,” he stressed.
President Akufo-Addo further asked the Ministry, the Petroleum Commission, GNPC and the Licensing Rounds Committee to co-operate and ensure that activities under the oil and gas licensing round are carried out in a transparent and efficient manner.
He said the move is in keeping with the 2016 manifesto of the New Patriotic Party’s pledge to “improve transparency in the management of our oil and gas resources.
President Akufo-Addo had noted that the countries that had benefited immensely from their oil and gas resources are those that implemented policies to accelerate value addition activities in their economies, through the development of forward and backward linkages, and by investing oil revenues in strategic social and economic programmes.
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