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Energy think tank African Center for Energy Policy (ACEP) urged government here on Thursday to take steps to review contracts awarded some International oil companies but which have been lying dormant over the period.

Executive Director of ACEP Benjamin Boakye questioned why contracts awarded to some of these companies (IOCs) had been renewed although they had not met the dictates of these contracts.

In a 20-page “Petroleum Contract Monitor” document, ACEP asserted: “The conclusions are that most of the companies have not delivered on the agreements signed with Ghana.”

According to the think tank, in spite of the provision in the regulations that a contractor must spend the minimum agreed upon expenditure target or pay sums equal to the unspent balance to the Ghana National Petroleum Corporation (GNPC), some contractors had been under-spending on the oil blocks and yet their contracts had been extended without the sanctions.

“With the exception of those affected by the moratorium by International Tribunal of the Law of the Sea (ITLOS) on the disputed area in the Tano Basin, the Hess block and those whose initial period has not expired, all the other contracts have failed to deliver on their minimum work obligation.

“The failure to deliver requires activation of sanctions against those companies. However, some of the companies have already gotten extensions without paying stipulated penalties,” Boakye stated at a press briefing.

ACEP in its document named Springfield whose contract it said had been granted extension into the next phase while the contract had two more years to go on the first phase, with no evidence of the company spending the minimum threshold of 30 million US Dollars agreed in its contract in exploration.

Admitting that some of the companies found refuge in the preliminary ruling of the International Tribunal for the Law of the Sea (ITLOS) which placed injunction on field operations in the disputed area until the determination of the case between Ghana and Ivory Coast, the think tank added that some companies outside the disputed area also significantly failed to deliver on their obligations.

“This failure is a direct function of non-enforcement of the contracts terms by government. At the same time data on the performance of the companies have not been available to aid civil society and interested parties to track performance,” Boakye pointed out.

He said investment requirement for all 14 active Petroleum Agreements (PAs) for the initial period summed up to a total of 923 million dollars while for those whose initial period had expired, they should have invested about 750 million dollars in exploration.

“The evidence of limited activity points to less than two percent of the required minimum expenditure over the period.”

The Executive Director therefore urged government to sanction all offending contractors by reviewing their contracts since they were denying the country potential revenue from oil. Enditem

Source:Xinhua/NewsGhana.com.gh

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