Posted by: rumnet | January 31, 2012

Serious Monitoring of Petroleum Sector

Serious Monitoring of Petroleum Sector, Institution of NDA:

A Way to Ensure Judicious Use of Oil Money

(published in the december edition of the advocate) 

By Joseph Ziem, Accra

As Ghana prepares to begin spending its share of the revenue accruing from the oil and gas sector of the economy anytime soon, Civil Society Organisations (CSOs) have been asked to regularly and seriously monitor developments emerging from that sector, to enable them make informed decisions and suggestions that would eventually make the nation benefit appropriately from the natural resource. 

Besides, the leadership of the country has also been urged to institute a bi-partisan National Development Agenda (NDA) and entrust it in the care of the National Development Commission (NDC) which will spell out the development priorities or needs of the nation in the next ten or fifteen years to ensure the judicious management of its share of the petroleum revenue.

According to the Executive Director of the Kumasi Institute of Technology and Energy (KITE) Ishmael Edjekumhene, the proposed NDA should make it binding in such a way that any political administration that comes to power would have to stick to the dictates of the NDA so that the country could have a better and uniform way of developing its infrastructure and human resource. “It should make it compulsory such that any development project started by a previous government is continued by the one taking over the administration of the country,” he emphasized.

The NDA “should be a guide to present and future heads of state to make sure that the oil and gas money is not spent recklessly on any kind of development projects. If this is put in place through a collective decision and contributions of all political parties in Ghana, it will also speedup the development process of our country and further minimize bribery and corruption,” he stressed.

The Executive Director of KITE said this when officials of the Ghanaian Developing Communities Association (GDCA), Dalun Simli Centre and Accountability and Good Governance Network (AGNET) – members of the Civil Society Platform on Oil and Gas – paid a learning visit to his organization in Accra in October to get themselves abreast of current issues in the nation’s petroleum sector.

KITE is wholly Ghanaian non-profit-making development organization and a leading actor in the energy, technology and environment sectors in Ghana and the West Africa Sub-region. The organization has been a key advocate in the oil and gas sector of Ghana and has two publications to its credit namely; “An Illustrated Glossary Of Selected Oil and Gas Terminologies” and “Ghana’s Emerging Petroleum Industry: What Stakeholders Need To Know.” 

Mr. Edjekumhene also indicated that the NDA could make it possible for the state to prosecute anyone who spends petroleum money since it will be a document containing the collective voice of leadership of all political parties so that anyone found culpable of any corruption or financial malfeasance would not be left off the hook due to political favouritism. Adding, “Indeed, the NDA can also ensure or insist on value for money when contractors are awarded contracts to execute development projects.”

He further stated that the only way for Ghanaians to ensure that policies in the petroleum sector were complied with was to insist that political leaders become accountable to them in all decision-making processes. Adding “If they refuse to account to Ghanaians and also fail to ensure due diligence during policy formulations, they should be voted out of power for the larger interest of the country.”

Citing for instance, the flow metres of the Kwame Nkrumah FPSO that got damaged recently and the government of Ghana took the sole responsibility to import new ones at the cost of the state, Mr. Edjekumhene said that was wrong.

He explained that the FPSO vessel does not belong to Ghana but rather, it was rented from a company abroad by the jubilee partners including Ghana National Petroleum Corporation (GNPC) for the storage of oil and gas. “Thus, when there’s a damage or malfunction to any part of the vessel, it is the responsibility of the group that rented/hired it to repair or fix the problem and not the state.  

Mr. Ishmael Edjekumhene recalled that a lot of questions were recently asked about that and how much it cost the government to import the brand new flow metres, but no one was able to explain that to Ghanaian taxpayers. He said: “If citizens begin to keep quite over some of these wrongdoings, the nation could be shortchanged in critical agreements signed in the oil and gas sector.”

The oil sector is an emerging industry in which many people, especially the youth, are seriously eager to work in. As a result, they are falling prey to some institutions that claim to be offering training in oil and gas. He warned the youth who, out of desperation, want to acquire some expertise to enable them get jobs in the oil and gas sector to be very careful on the kind of training they enroll on as potential job seekers in the petroleum sector.

According to him, the training currently being given to people by certain institutions were too rudimentary to get someone a job in the petroleum sector. Adding that, many people were paying huge sums of money to gain skills that will earn them nothing when they eventually complete.

When the group also paid a similar visit to Dr. Steve Manteaw, Chairman of the Civil Society Platform on Oil and Gas, he lauded parliament for passing the Petroleum Revenue Management Bill and Petroleum Commission Bill into Laws which were currently awaiting presidential accent. Adding, all these, coupled with the formation of the Public Interest and Accountability Committee (PIAC), was a bold step towards the efficient, transparent and accountable management of Ghana’s petroleum resources.

He called on members of the CS Platform on Oil and Gas to continue to monitor other key legislations still outstanding, such as the Petroleum Exploration Law, the Petroleum Income Tax Amendment Law (a draft of which is still receiving attention by the Attorney General’s Department), as well as the necessary legislative instruments that will give effect to these laws.

Dr. Manteaw who is also the Editor-In-Chief of the Public Agenda newspaper and Convener of Publish What You Pay – Ghana, a pressure group, implored government to further demonstrate enough commitment by accenting to the laws passed and push for the passage of the rest of the Bills left.

He commended GDCA for its interest in the governance issues in the oil and gas industry, urging the NGO to step up its education and sensitization programmes to enable citizens in the northern part of the country get a better understanding of what is going on in the sector, so that eventually Ghana would get her fair share of every contract and benefit.

GDCA is the first and still the only non-governmental organization in Northern Ghana to get involved in advocacy in the oil and gas sector since Ghana began pumping oil about a year ago.

According to Mr. Hardi Tijani, an official of GDCA and leader of the delegation that travelled to Accra, GDCA became interested in the emerging petroleum industry because it considered the natural resource found as a national asset (stipulated in the constitution) and thus deemed it necessary to learn about it and educate residents of the Northern Region where it operates by way of capacity building through sensitization workshops, community durbars and stakeholder forums among others.

He explained that being the first NGO to go into oil and gas advocacy, GDCA also decided to learn from other organizations and institutions like KITE that had in-depth knowledge and experience in the sector. This, in his estimation, would further enhance their knowledge and understanding of issues in the petroleum sector, so that they could educate northerners to also position themselves well in order to take advantage of opportunities that would be emerging in future.       

 Meanwhile, recent report from Ghana’s Energy Ministry indicates that since the country started oil and gas production on December 15, 2010, 16.7 million barrels of oil has been produced so far between January and September, 2011, earning her a total revenue share of US$337,337,945.

According to the Ministry of Energy, this was from the sale of the first three crude liftings totaling 2,980,720 barrels out of a total of 24 by the Jubilee partners with Ghana through the Ghana National Petroleum Corporation (GNPC).

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