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15% of ExxonMobil contract not best -Energy Experts

  • SOURCE: Daily Heritage | qwesa2big
  • DR STEVE Manteaw, an energy expert and a member of Public Interest and Accountability Committee (PIAC) has said that it is important Ghanaians have full access of  the Exxon Mobile contract to get to know what has been negotiated, especially in their name and in what the terms are.

    The expert, speaking to some members of Institute of Financial and Economic Journalists at a session to review the 2017 Semi-Annual report of PIAC in Koforidua in the Eastern Region, explained that Ghana, getting the 15% interest in the contract is not the best as a country because the 15% under reference is actually what is provided in the law as the minimum take.

    He said, “So if you go for the minimum, I do not see how that becomes the best and we should also recognize that in jubilee we have a government take of about 13.64% but this is because at the time we were negotiating that contract, we had not made any discovery so there was a very [huge] risk associated with the venture but now that we have made the discovery, if all you can do is to go one-and-a-half percentage point above jubilee, then I don’t think it is the best.”

    Dr Manteaw added that the interest Ghana held in the project was not the only parameter in determining how good the contract was as there were royalties which Ghanaians did not know and what the negotiated royalty for Exxon mobile was.

    He explained that there were also other items that Ghana needed to take into account and for him, without seeing the full contract it would difficult to assess how good the contract was.

    “The four Ghanaian partners that are being looked for is about 270 days before we are told who that company is, so how important is it by making the contract public now? Well, the contract has been signed by the major partners and to the extent that they have been signed by the major partners, I do not anticipate that the term of the agreement will change beyond this time and so definitely if we have to do any scrutiny and analysis of the contract, the time is now.”

    “We will not be doing the analysis with the view to changing anything because of our acknowledgement of the sanctity of contract but it’s just important to do this analysis in terms of informing ourselves and ensuring that whatever mistakes has been made be corrected before negotiating further contracts,” he added.

    He stated that the deal is worrisome because it gives room for rent-seeking and cronyism, especially when the process for identifying that partner is not very clear and so it could end up that some people could be selected to fund for political authority and all that is a risk associated with the process itself.

    “But let me also say that in my view, if you are talking about local content, and it’s for that reason that 5% has been provided for, that 5% can be added unto the Ghana National Petroleum Corporation equity in the project and that will still count for the local content.”

    “Openness, the rules for that selection of that partnership should be very open and clear and that is the only way to clear the risk of rent-seeking and manipulation of the process,” he said.

    The expert revealed that Act 919 was passed in August, 2016 and the notice of direct negotiation was placed in the public newsprint in October 2017.

    He added that the Memorandum of Understanding (MoU) was signed on April 30, 2015 between the two parties over a period of seven months as an exclusive period.

    He said “we see here a clear attempt to create the impression that the negotiations pre-date Act 919 but the MoU technically has lapsed; granted that the MoU, indeed, pre-date Act, then there would have been no need to serve notice but to continue with negotiations, or at least, the notice should say negotiations were continuing.”

    Mr Kwame Jantuah, an energy expert and Vice Chairman of PIAC, said that Exxon Mobile is a deal of deep waters which Ghana, as a nation, had not come to.

    According to him, auto drilling of oil is totally different from shallow deep waters but for him, he thinks the most important thing is to monitor production which is the most important thing to know what the company says and what they are taking and selling out.

    “We have challenges with Jubilee with the metering; if they are going to do it like the FPSO, they will do so in the ultra-deep waters. We have to have the expertise to be able to monitor production.”

    “Now it is in deeper waters; what we have to do is having people to monitor. We also need to get the necessary equipment in terms of helicopters and things like that to be able to fly unto the FPSO when we have to at present moment. I don’t think Ghana has too many helicopters but we should start driving this kind of a base of we want to extend our oil industry,” he added.

    Mr Jantuah advised the governing bodies who are in charge of the oil industries to work to the maximum and be able to advise the president and not to try to cut corners anywhere.

    “The fact that it is Exxon Mobile does not mean that if they do something wrong, they shouldn’t be sanctioned because if Tullow and Cosmos can be sanctioned, they also can be sanctioned and they are subject to Ghanaian laws and not America laws in Ghana,

    He cautioned the media to make sure that those who are supposed to monitor and govern the industries do it to the benefit of Ghana and give Ghanaians the right information if the government fails to do so.

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