Ghana’s Petroleum Act puts non-passage of PIB in limelight

Ghana’s legislature recently enacted the Petroleum (Exploration and Production) Act 2016 to replace the Petroleum (Exploration and Production) Act, 1984. The bill was first laid before Parliament in 2012 but years of stakeholder consultations delayed its passage.

Emmanuel Buah, Ghana’s Energy Minister, said the new law would create an attractive environment for potential investors to participate in the sector by providing certainty and transparency in the ground rules for operations.

Energy think tank, Africa Centre for Energy Policy (ACEP), says the passage of the Petroleum (Exploration and Production) Act 2016 by Parliament is welcome news for the oil and gas sector. However, ACEP says absence of punitive actions for conflict of interest by public officials blots the impecable work by Parliament.

“We are however worried that an important provision relating to penalty for conflict of interest of public officers has not been incorporated in the Act despite many calls for it”, said ACEP in a statement.

Though the ACEP says it has also taken positive note of the provisions of the new Act that will foster transparency in the sector. But the think tank says it will continue to campaign for the provision on conflict of interest to eventually reflect in future amendments to the Act.

“I believe Ghana’s ability to quickly pass their oil law lends more credence to their drive for investments in the energy space while ours continues to drive investments away”, said Dolapo Oni, Head, Energy Research, ECOBANK PLC adding that there is a good degree of focus on transparency in Ghana’s Petroleum (Exploration and Production) Act.

“The law includes elements such as ensuring the Minister of Petroleum publishes a register of all petroleum contracts and agreements signed with oil companies, which will be available to the public (however this does not imply the actual agreements and contract documents will be available to the public). Any invitation to an oil company to negotiate over a block must be gazetted and published in two forms of media – electronic/print/social media etc. These among several other clauses ensure there’s a higher degree of public access to information about the government’s dealings in the oil and gas industry.

“Nevertheless, there is room for more transparency still for Ghana including full disclosure of bids submitted in a competitive bidding process, ownership information of blocks awarded, including all beneficial ownership”, Oni said.

PIB on the spot

Ghana’s Petroleum Act 2016 essentially puts Nigeria’s non-passage of Petroleum Industry Bill (PIB) in the limelight, said Oni. He outlined the issues with the PIB to include transparency, access to information, clarity on fiscal terms, beneficial ownership adding that while Nigeria’s oil industry is a lot more complex and the issues are far more diverse.

“It is important we bring the PIGB (Petroleum Industry Governance Bill) out again and address the issues, pass it and move on to deepwater fiscal terms, pass it, move on downstream deregulation and pass it as well. Nigeria needs to hold a licensing round for the many OPLs that have been awarded, some since 2003 and nothing has happened on the asset since then.

I think the key points to emulate are in the access to information and transparency. While the National Assembly is seeking to limit the powers of the executive in the oil sector via the PIGB, the powers of the NASS and the executive need to be checked, by the public. This can be achieved if there’s more public access to the industry”, Oni said.

Lessons for Nigeria

“I believe the key lesson for the National Assembly is the need to find a way to pass the PIB because the country’s interests come first. The global economy is fast developing other alternatives to crude oil for transportation and energy uses. If we delay passing the PIB and developing our resources, the country stand to lose a whole lot more than it is losing currently”, said Oni.

Donna Obaseki-Ogunnaike, Partner with ACAS-Law, in an article for Businessday West Africa Energy stated that the PIB has gone through 2 past administrations and has not been able to pass the litmus test of legislation partly due to its length (comprising 222 pages and 362 sections) and its far-reaching provisions that cut across fiscal, governance and regulatory matters.

“In reaction to the desperate situation, the PIB has been split into 4 bills namely: the PIGB (the subject matter of this piece), the Fiscal Regime Bill, the Upstream and Midstream Administration Bill, and the Petroleum Revenue Bill”

Where the PIGB is enacted in its current form, it will repeal the PPPRA (Establishment) Act from the effective date of the PIGB, while the NNPC Act shall be deemed to be repealed on the date the Minister signifies by legal notice in the Federation’s Gazette that the assets and liabilities of the NNPC are fully vested in successor entities”, stated Obaseki-Ogunnaike.

FRANK UZUEGBUNAM