The Africa Centre for Energy Policy (ACEP), an energy think tank in the Republic of Ghana, has punched holes in the 2024 Manifesto promises of the major political parties on the upstream oil and gas sector barely a few days to a general election in the West African country.
In a document titled 2024 Election Playbook, which focused on power and petroleum-downstream and upstream sectors, and funded by OXFAM, the Africa Centre for Energy Policy took time to analyse all the proposed commitment of political parties, including the recently formed New Force and Movement for Change founded by the former Trade and Industries Minister, Alan Kwadwo Kyeremanteng.
Ghana began commercial oil and gas production from the offshore Tano Basin in 2010. Initial output increased from 24.2 million barrels in 2011 to a peak of 71.44 barrels in 2019. Production from the basin has since dropped after 2019 by about 32% to 48.25 MMbbl in 2023. To date, the offshore Tano Basin remains the only productive hydrocarbon basin in Ghana.
ACEP’s decision to analyse the manifestos of the four political parties is to see which of the manifestos can address the issues in the upstream sector to increase exploration and production of oil and gas.
In the NPP’s 2024 Manifesto, the party has proposed to simplify approval processes for appraisals and production programmes to re-energise upstream activities and fully implement the Infrastructure -Led Exploration (ILX) strategy to unlock the full potential of Ghana’s offshore reserves.
Additionally, the party proposed to partner the private sector to build and maximise gas processing infrastructure for power generation, ammonia for fertilizer and gas to petrochemical liquids.
Furthermore, the party proposed to review and strengthen the Petroleum Revenue Management Act to streamline government allocation of oil funds and address gaps in the law and introduce a dedicated National Ghanaian Content Fund and National Data Acquisition Fund to help Ghanaian enterprises to enhance their competitiveness and effectively participate in the upstream sector.
In its analysis of the NDC’s manifesto promises, ACEP welcomed the attempt by the NPP to improve regulatory processes in the upstream sector.
However, the think tank said an International Oil Company (IOC) would only seek approval for appraisal or production of a favourable environment for licence acquisition and exploration, and the IOC would find evidence of economic reserves of hydrocarbon.
It underscored that efforts to improve the approval processes for appraisal and production should not be at the expense of enhancing licensing and exploration activities.
Touching on the Infrastructure-Led Exploration (ILX), ACEP stated that this strategy has the potential to boost production and cut development costs if applied fairly and transparently.
However, it said the policy must be standardised and amplified to avoid excessive discretionary application, which has recently favoured or disadvantaged certain industry players.
According to ACEP, the promise to involve the private sector in gas processing remains stalled and shrouded in politics and boardroom disputes.
“A transparent, competitive selection with parliamentary oversight is essential to move it forward,” ACEP suggested.
Also, it indicated that NPP’s manifesto lacks specifics on the aspect that reviews the Petroleum Revenue Management Act. It pointed out that past attempts to review it focusing on the use of the Heritage Fund and oil revenue collateralisation were rejected by stakeholders.
“Voters need clarity on the proposed changes to make informed decisions,” it suggested.
On the issue of National Ghanaian Content Fund and National Data Acquisition Fund, ACEP recalled that the government has implemented a Local Content Fund for the past ten years without results and questioned how different would the proposed National Ghanaian Content Fund be from the existing local Content Fund.
Additionally, it said the manifesto does not clarify the funding sources which has been the major problem of the Local Content Fund.
Turning its attention on the NDC’s 2024 manifesto, ACEP said the NDC plans to increase exploration activities to establish new reserves by rebuilding investor confidence through policy and regulatory clarity, consistency, predictability, transparency, and governance and attract world-class investors. It also plans to innovate multi-field development systems that optimise development of infrastructure and allow profitable production of otherwise marginal fields.
Additionally, the NDC plans to fully domesticate non-revenue benefits of the oil and gas industry for Ghanaians by enhancing technology transfer, supporting local businesses, and increasing local content in procurement. This includes re-establishing the National Oil Company (NOC) as a centre of excellence and reviewing laws and policies to align with these goals.
In its analysis of these commitments, ACEP noted that during the previous NDC administration, several oil blocks were awarded to lesser-known oil companies that ultimately failed their mandate.
It said given this history, the proposed shift towards engaging world-class investors is commendable. It, however, said the party must outline a clear strategy for attracting and securing these world-class investors.
ACEP further noted that optimising development infrastructure for profitable production is essential. It, however, stated that this strategy must be standardised and simplified to avoid excessive discretionary application, which has recently favoured or disadvantaged certain industry players.
Concluding on NDC’s commitment, ACEP pointed out that the NDC’s manifesto failed to clarify the gaps in existing laws that require review. It added that is essential for the NDC to clarify the meaning of establishing the National Oil Company as a centre of excellence as it raises pertinent questions about its current mandate and role.
Source: https://energynewsafrica.com