CSOs and media undergo petroleum contract analysis training
To advocate effectively for accountability in oil contracting, the Natural Resource Governance Institute (NRGI) and the Petroleum Commission has organized a workshop on petroleum contract analysis for Civil Society Organizations (CSOs) and media practitioners.
The training was expected to equip the participants with essential skills to advocate for accountability in the oil and gas contracting process and ensure compliance by companies in meeting their contractual obligations.
Understanding petroleum contracts, navigating the petroleum register, and extractive contract analysis techniques were among the topics covered by the participants.
The Ghana Petroleum Register, an online system that hosts all 18 Petroleum Agreements signed between the government and oil companies, was launched in February 2018.
Despite the fact that CSOs and the media have demanded that these contracts be made public, there has been little interest in using the information contained in the register.
The Petroleum Commission’s Legal Manager, Nana Akua Agyei, stated that the training programme was initiated by the Commission and NRGI to improve the use of the register.
She stated that the transparency and accountability mechanisms helped citizens understand what was going on in the upstream petroleum sector, allowing them to monitor contract performance.
A petroleum contract is an agreement between a contractor – an oil and gas company – and a host government in which the contractor bears all exploration and risk costs, as well as development and production costs, in exchange for a predetermined share of the production.
According to the manager, the petroleum register is a public register that contains petroleum permits, certificates, authorizations, and approvals as well as petroleum agreements ratified by parliament.
In terms of navigating the petroleum register, the Legal Manager stated that the tabs on the petroleum register included the homepage, which provided a brief write-up on Ghana’s open exploration area – history on Ghana’s upstream petroleum industry.
It also included a contract area, which included a summary of the contractor parties, a description of the contract area, the status of operation, and a summary of the key fiscal terms of each petroleum agreement, as well as licensing rounds, which provide information on Ghana’s petroleum licensing.
She stated that one of the benefits of the petroleum register is that the contract signed contains important information that citizens need to understand the nature and consequences of extraction.
It also fosters trust between the government and its citizens, as well as providing clarity and assurance to companies looking to invest in Ghana. Concerning patronage, she stated that it was disheartening because the total number of visits to the register since its inception in February 2018 was 36,656.
In 2018, there were 9,292 visits, compared to 8,760 visits in 2021.
Ms Nicola Woodroffe, an NRGI representative, said contractor parties typically included a publicly traded international company, a privately held international company, a national oil company from another country, a national subsidiary of an international company, an offshore entity controlled by an international company, and a joint venture composed of multiple actors.
She provided a historical timeline of Ghana’s oil and gas sector, stating that the country discovered oil in 2007 and established its legislative and institutional structures between 2008 and 2016.
From 2019 to date, oil production has increased from 15,000 bopd to 160,000 bodp.
As a result, she stated that the potential role of the media and civil society organizations in oil and gas contracts was to monitor compliance with legal obligations, hold government and companies accountable, and conduct analysis of specific provisions to support monitoring.
According to Mr Samuel Bekoe, Economist and Extractive Governance Expert, petroleum agreements cover both fiscal and non-fiscal aspects, including licensing relinquishment conditions, domestic market obligations, oil and gas pricing, particularly in producing countries, participation by national oil companies in licenses/contracts, and data ownership and confidentiality.
The participants advocated for ongoing training in petroleum contract analysis in order to broaden their understanding for future public dissemination of such issues.