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wpid-oil.jpgTHE PETROLUEM EXPLORATION AND PRODUCTION BILL 2013 ?

A MODERN CONCESSION.? WHY GHANA??

?Imagine what Africa will look like when it has fully tapped into its potential he said, citing opportunities in agriculture, manufacturing and intra-African trade.

But Africa and its partners will miss the opportunity to transform the lives of future as well as present generations if they carry on with business as usual, he added.

Tax avoidance and opaque business practices block Africa?s extractives sector, too, Mr. Annan said, he was upbeat about prospects for Africa?s resource rich countries.

Africa?s natural resource wealth rights belongs to the continent?s citizens, but the citizens are being robbed of its benefits by revenue diversion, corruption, jobless growth, and rising inequality? Kofi Annan, Africa Progress Panel, 26th September, 2013.

Here we are, Ghana the Star of Africa is about passing a law to legalize and perpetuate the robbery of her citizens in the name of investment, Kofi Annan complained about, that would plunge the current generation and the future ones into eternal economic bondage. The passage of the Petroleum Exploration Production Bill in it?s current form with the fiscal provisions and other unfavourable sections it contains into law would amount to surrendering our sovereignty and constitutional ownership and birth rights over our oil and gas resources wealth to the British and Americans once again, the manner we treated our gold and other minerals in the name of investment in the past and up to today.

 

Dr. Peter Eigen, the Founder of Transparency International observed that the World Bank and Western Government do not see anything wrong with the multinational companies engaged in extractive industries paying ten of million dollars into private accounts overseas to secure bad agreements, and contracts and laws in their favour.? DW TV Journal?? Interview, 31st December, 2013.

 

Without mincing words the World Bank and Oxfam America are actively involved in pushing for the passage?? of this Bill into Law to rob us of our oil wealth in favour of the British and Americans in the name of investment.

We at GIGS are not against investment at all, what we are calling for are fairness and equity in sharing the Oil Revenue as being done in other oil producing countries and in consonant with the UN Resolution on Permanent Sovereignty over Natural Resources, General Assembly Resolution 1803, 1962, reprinted in General Assembly Resolution 3171 of 1963, and the Charter of Economic Rights and Duties of State, General Assembly 3281 of 1974.

 

You may ask, how is the World Bank and Oxfam America are involved in getting this obnoxious Bill pass into law to regulate the upstream oil industry in the country.

 

Before production began in December 2010, they supported the establishment of 135 CSO Platform on Oil and Gas in 2008 throughout the country except the Volta Region and resourced and financed by Revenue Watch Institute and Star Ghana.? Revenue Watch Institute and Star Ghana were set up in the year the announcement of discovery of oil in Ghana was made as financial conduits to these 135 CSO Platform on Oil and Gas and other Think Tank groups in the country, and to execute the diabolical plan and agenda of the World Bank and Oxfam America, to deny Ghanaians a fair and equitable share of their Oil wealth in the name of investment.

 

These CSO and their leaders are projected by the World Bank, Oxfam America and Revenue Watch Institute as the only knowledgeable people in Ghana to speak and listen to on Oil and Gas matters.? They are influencing and shaping what Ghana should do, doing the bidding of these International Organizations not mindful of the harm they are doing to their country.

 

Membership of these CSO are also made up of young men and women journalists positioned in various Radio Stations and Press Houses, both private and public, brain washed to believe that, what Ghana is doing is the best that can be achieved.? This was achieved through juicy allowances and scholarships abroad to study what is being called Masters in Oil and Gas reporting.? These scholarships and allowances were channeled through Revenue Watch Institute and Star Ghana.

 

These are sobering observations guiding we at Ghana Institute of Governance (GIGS) and Security in our quest for a better Oil and Gas deal for the people of Ghana through the adoption of the pure Production Sharing Agreement (PSA) fiscal regime in the Petroleum Exploration and Production law to regulate the Upstream Industry in Ghana.

 

The Production Sharing Agreement is a progressive fairer and equitable fiscal arrangement in sharing oil revenue currently in the world over, Angola, Nigeria, Cote D?Ivoire, Cameroon, Republic of Benin, Liberia, Sierra Leone, Mozambique, Niger, Chad, Togo, Sudan, South Sudan, Tanzania, Kenya, Egypt, Libya, Equatorial Guinea, Gabon, to mention a few in Africa producing under or signed on unto PSA; Brazil, Bolivia, Peru, Ecuador in South America; Trinidad and Tobago, Guatemala, Cuba, Belize in Central America and Caribbean, Qatar, Jordan, Syria, Yemen Bahrain, Iraq, Iran in the Middle East, Indonesia, Malaysia, Philippines, East Timor, Vietnam, China in?? Asia, Albania, Bulgaria Croatia, Georgia, Romania, Azerbaijan, Russia and Ukraine in Eastern Europe are?? example of countries operating their Oil and Gas resources under PSA.? Currently there over 75 countries in the world producing oil and gas under this progressive fiscal arrangement.

 

We have observed that the? spirit and intent of PNDC Law 64 and PNDC Law 84 which were existing laws governing the Upstream Oil Industry before the discovery of oil is,? Production Sharing Agreement.? But all Agreements and Contracts entered into up to date are modeled to suit Modern Concession laws,? which are not in existence when this contracts and agreements entered into, and even to the extent of violating UN Charters on Natural Resources,? therefore are not compactible and in conformity with the tenets of the existing laws.

 

Ghana cannot claim to be wiser than all the above mentioned countries, moving away from progressive PSA law to exploitative Modern Concession law.

 

The Modern Concession, a hybrid system between Concession and Production Sharing Agreement was designed by the World Bank in conjunction with the British and American Oil Companies as an antidote to the PSA which was started from the East-Indonesia in 1960.
The Modern Concession is as equally exploitative as the traditional Concession.

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The Modern Concession Model is, what is contained in the Petroleum Exploration and Production Bill which the World Bank, IMF, Oxfam America and Revenue Watch Institute have helped to draw, through the support of the 135 CSO Platform on Oil and Gas and Africa Center for Energy Policy (ACEP) with the collaboration of other NGO?s and Think Tank Groups in the background.? The elite technocrats handling the oil and gas matters on behalf of the people of Ghana are part of the conspiracy to impose this exploitative system on Ghana to back the bad agreements and contracts to fall in line with the new inimical provisions contained in the Petroleum Exploration and Production Bill.

 

Ghana is being used as experimental guinea pig in Africa because our investigations revealed that newly emerging African countries into Oil and Gas have resisted the Modern Concession and signed onto (Production Sharing Agreement ( PSA).? For example Kenya, Uganda, Togo, Liberia, Sierra Leone, Tanzania, and Niger who are also frontier nations yet to start producing resisted the Modern Concession and signed onto PSA.? Our position and argument is, if the system was a good one, Angola and Nigeria would be the first to adopt it.? They have moved away from the Concession and Joint Ventures to PSA and Service Agreement.? WHY GHANA?

 

In a Paper titled From Concession to Service Contracts by Ernest E. Smith in Tulsa Law review, Vol. 27 Issue No. 4 International Energy Law Symposium 1992, Modern ?Concession Contracts are alleged to be subject to undue influences and corruption.? We have no doubts in our minds that, that is exactly what is happening in Ghana, the Star of Africa,

 

In conclusion, Ghana the Star of Africa,? adoption of an exploitative Modern Concession Law to replace a progressive and equitable law, the? Production Sharing Agreement was due to a political decision at that time to reverse anything to do with PNDC regime, without properly thinking through the dire economic consequences it would have.? Secondly due to undue influences and corruption associated with the oil industry, and lastly the desire and propensity by the political class and the elite technocrats to amass wealth by placing the control of our rich oil and gas resources wealth in private hands, contrary to what is happening in countries in lesser stature than Ghana.

 

We do sincerely believe if the current Government understood the dire consequences and ramifications of this Draft Bill becoming a law to regulate our Upstream Oil Industry, The President and Cabinet would not approve of it.

 

We at GIGS have seriously taken keen view about these developments and we consider the issue should be put to public discussion and debate to determine what will be beneficial to Ghana?s wider interests and needs not to compromise the security of the Nation.

 

We demand the President should withdraw the Bill and as a matter of urgency invite immediately an independent International experts in these matters to review the Draft Bill to fall in line with pure Production Sharing Agreement, the only way to achieving full maximum benefits from our Oil and Gas Resources. If we failed to bring about a paradigm shift and a change as to how we manage our Natural Resources, in particular the new found wealth in the Oil and Gas, then we have no moral rights to comment on and criticize the state of the economy.

 

Ghana would not be in this mess and crisis if close to US$5 billion flowed into the economy to date as a result of adoption of Production Sharing Agreement.

 

DAVID AGBEE

EXECUTIVE DIRECTOR

 

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SOLOMON KWAWUKUME

SENIOR RESEARCH OFFICER

OIL AND GAS.

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