Gov’t deal with Exxon Mobil ‘unlawful’ – Steve Manteaw

Dr. Steve Manteaw

Co-Chair of the Extractive Industries and Transparency Initiative, Dr. Steve Manteaw, has accused the government circumventing the law by signing an oil exploration deal with Exxon Mobil.

Dr. Manteaw had raised concerns earlier over government’s failure to resort to an open bidding process to select Exxon Mobil despite the Energy Minister, Boakye Agarko, explaining that negotiations began before the law was passed.

But Dr. Manteaw insisted to vipi News that was no excuse to violate the laws of the country.

“Negotiators may have started long before the law was passed, but to the extent that it was not concluded once the law was passed, they must be subjected to the law. Even though the law provides for a situation of this nature, we are yet to be convinced about what is really special about their circumstance that really warranted the direct negotiations,” he contended.

Beyond this, he said common sense should have compelled the government to opt for a competitive bidding process in the interest of best practice and efficiency.

“Even if the law did not require open competitive bidding, common sense suggests to us that open competitive bidding and international best practices suggest that open competitive bidding was the way to ensure optimal returns in the negations of contracts.”

Group being selective

But on Eyewitness News, the Deputy Minister of Energy, Dr. Mohammed Amin Adam, said the Civil Society group was being selective in its contentions.

According to him, the group was only focusing on section 10 (3) of the 2016 Petroleum Act 919, which requires the government to enter into exploration agreements through a competitive public tender as the default process.

Dr. Amin Adam made reference to Section 10 (9) of the same law, which he said permitted direct negotiations without public tender.

Section 10 (9) says: “Despite the subsection (3) the Minister may, in consultation with the Commission, determine that a petroleum agreement may be entered into by direct negotiations without public tender, where direct negotiations  represent the most efficient manner to achieve optimal exploration, development and production of petroleum resources in a defined area.”

“So the Minister [Boakye Agyarko] hasn’t done anything wrong. The Minister has complied with the law, section 10 (9) which requires the Minister to constitute another process, where that process gives us the efficient means by which the resource can be exploited,” Dr. Amin Adam stated.

The agreement, which is subject to parliamentary ratification will allow the oil giant to acquire exploration and production rights for the Deepwater Cape Three Points block that is Tano Basin.

Ghanaian ownership is estimated at thirty percent.

This comprises 10 percent royalty to the government of Ghana while the GNPC owns 15 percent stake as Carried and Participation Interest.

Also, the local partner for ExxonMobil is entitled to five percent of the company’s stake.

ITLOS ruling

ExxonMobil’s investment in the oil sector becomes the first major one in Ghana following the landmark ruling by ITLOS in the maritime border dispute between Ghana and Ivory Coast, in September last year.

The apparent victory by Ghana gives the country an appreciable reputation among the global oil giants.

At the signing ceremony, the Energy Minister, Boakye Agyarko, explain to vipi Business News that the move is set to trigger further investments in the short to medium-term.

“Exxon Mobil is coming in with the highest standard of safety, financial accounting and all that we need to get done as a country…we have received a lot of expression of interests from other major players; the BP, Shell, Chevron, among others. All of them are now coming to operate in Ghana,” he stated.

The CEO of the Ghana National Petroleum Corporation [GNPC], Dr. K.K. Sarpong, stressed the enforcement of local content policies.

In his view, the plan will give Ghanaians access to opportunities in Exxon Mobil’s operations where necessary.

“In terms of local content policies, the laws have been strengthened the Petroleum Commission is at the forefront of enforcing the laws and we at GNPC have the sustainability and localization department which tries to make sure that we bring our partner’s attention to the mode of operation so that we take advantage to get benefits from our local people both corporate and individuals.”

ExxonMobil joins other operators in Ghana’s petroleum upstream sector including, Tullow, Kosmos, ENI, among others.

Source: vipibusinessnews.com