The
agreement for the development of the Offshore Cape Three Points (OCTP) integrated
oil and gas project – being undertaken by Italy's largest oil company, Eni Spa,
in collaboration with Vitol Energy – is aimed at boosting Ghana’s gas supplies
to secure the country’s energy and power sector.
“This
investment is worth $7 billion and is reportedly the single biggest investment
signed in recent history,” said the President in his State of the Nation
Address to Parliament on Thursday.
Ghanaians
should however be worried about this deal, says Dr. Mohammed Amin Adam, Executive
Director of the African Centre for Energy Policy (ACEP).
According
to him, “the $7 billion deal they signed with Ghana is badly negotiated; it’s
everything for ENI, nothing for Ghana. The only thing Ghana can guarantee is
that we’ll have gas to buy, other than that what?”
Revenue
accruing from the oil and gas industry is dependent on the quality of contracts
signed.
“Unless
you have good contracts, you will not get much revenue and unless you have
contracts that will lead to production, you will not get revenue,” observed Dr.
Adam, in reference to recently signed contracts and processes in acquiring oil
blocks.
He
has acknowledged government’s share of potential proceeds from new oil
contracts are progressively increasing. But there are doubts the new contracts
will lead to oil discoveries because Ghana is not attractive to big players in
the oil business.
“Those
who have been given contracts are doing nothing on their blocks because most of
them have no experience in upstream work; they don’t have money,” said Dr. Adam.
The Ministry of Energy and
Petroleum has stated that the award of new petroleum contracts to eight foreign
companies in 2014 was negotiated within the existing legal and regulatory
framework of Ghana.
But
the ACEP Executive Director says attracting big oil players in Ghana’s upstream
sector will demand the disclosure of beneficiary ownership information in
signing agreements, whilst providing “transparency and predictability” in the
process.
“If
you are not connected you cannot get an oil block and this is why we say
government must adopt an open and competitive bidding process so that the
companies that can give us higher value for our oil wealth, for our deposits,
we give the contracts to them,” Dr. Amin Adam said.
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