Using GNPC to achieve Ghana’s oil sector dreams
The march towards a new petroleum Exploration and Production Law
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In 1984 when the country’s Petroleum Exploration and Production (E&P) Law, 1984 (PNDCL 84), was mooted and passed as a regulatory framework for the petroleum sector, hopes of Ghana becoming an oil producer in the next few years were very minimal.
The same applied to the circumstances that preceded the passage of the Ghana National Petroleum Corporation’s Act, 1983 (PNDCL 64), which governs the operations of GNPC, the country’s national oil company (NOC).
In those times, Ghana was less fanciful in the eyes of international oil companies for oil activities, especially for production, which heralds a successful exploration.
Within those periods, the focus of stakeholders in the petroleum sector was more on how to market and promote Ghana as a potential oil-rich country to the international oil community so as to attract companies to explore.
As a result, the two regulations – the E&P Law and the GNPC Act passed between two years – centred on how to use the corporation to promote Ghana’s petroleum potential to the world while ensuring that it is given the needed regulatory framework to police the sector. Thus, GNPC was made a player and a referee in the sector by the E&P law.
Thirty years later, the situation has changed. Since 2007, when the country struck oil in commercial quantities and since then, the sovereign waters of Ghana have attracted oil companies looking to invest in emerging markets.
Eni, for instance, is about to start work on a US$7 billion integrated oil and gas project at the Offshore Cape Three Points area.
These developments call for a paradigm shift in the regulatory regime of the country sand this came to the fore in 2010, when the country started commercial production of oil. Since 2010, various changes and regulations, including the decoupling of the regulatory arm from GNPC onto the newly formed Petroleum Commission and the passage of the Petroleum Revenue Management (PRMA), 2010 (Act 815), have occurred much to the benefit of the industry and the country as a whole.
While those happenings are commendable, it is worthy of note that the GNPC has not been given much breathing space and legal empowerment to operate as a commercial NOC in all segments of the petroleum sector.
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Unlike its peers in other jurisdictions, the GNPC is still under-funded; and its operations are hampered by some legal restrictions..
This explains why the GRAPHIC BUSINESS fully throws its weight behind the Parliamentary Select Committee on Mines and Energy in its attempt to leverage global experiences before passing a new E&P law for the country.
Those experiences, the committee said, are needed to guide it and the country in general on how to use legal systems to create a robust NOC that will serve the national interest better. – GB