By Jeorge Wilson Kingson
Two of the most significant legislations needed for an effective oil production business in Ghana are on their way to Parliament for consideration, Businessweek has reliably gathered. The Petroleum Exploration and Production Bill (E&P Bill) and the Local Content Bill are set for presentation to the next meeting of Parliament which commenced last Tuesday, October 25.
The E&P Bill has been described as “The Bible” of the oil industry because of its significance. It is the legislation that is expected to provide the framework for exploration and production of petroleum in Ghana. When passed into law it will replace the PNDC Law 84 which is the current law under which petroleum exploration and production activities are undertaken.
The Local Content Bill is aimed at mandating that local companies provide as much as 90 percent of the work in some areas of petroleum services within a decade of a project’s initiation, among others.
The two bills are essential legislations needed for any country which is serious about its oil industry and want to maximize the necessary revenue out of in the interest of its people. The laws in essence would ensure that known challenges that characterize oil rich nations area avoided in the case of Ghana.
While a lot have been said about the importance of a local content law for Ghana not much effort has actually been seen by the relevant authorities to ensure the sector is regulated. The Association of Ghana Industries (AGI), the Ghana National Chamber of Commerce and Industry (GNCCI), and the Civil Society Platform on Oil and Gas are among the few active voices that have consistently highlighted the importance of a local content legislation for Ghana.
Several fora have been organized nationally by both civil society and government agencies with the view to collecting inputs towards an effective local content policy. The general impression nationally was that a local content policy was before parliament. A source close to the Parliamentary Committee on Energy however told Businessweek that no local content legislation has come to the committee.
According to the source, the committee itself have had course to participate in several meetings where inputs were taken by experts, lobbyists, advocates and government. “We are t expecting the draft bill anytime soon and we will start work on it as soon as we receive it” The source stated.
In August last year the Ministry of Energy forwarded to Parliament two draft legislations namely, the Petroleum Revenue Management Bill and the Petroleum Exploration and Production (E&P) Bill. After intensive and extensive and deliberations by members of the Energy Committee and the House the former was eventually passed into law.
The E&P Bill could however not be passed due to some concerns from civil society with regards to its provisions. Subsequently, it was withdrawn from the House to enable the public make more input while affording government the opportunity to address certain technical clauses among others.
At Revenue Watch Training Workshop for journalists last week, a former National Coordinator of the Civil Society Group, Publish What You Pay (PWYP), Mohammed Amin Adam informed journalists that work have been completed on the two bills and they are ready for presentation to Parliament before the end of its current meeting which is expected to end in the second week of December 2011.
It is expected that when the bills are finally passed into law it will further deepen transparency in Ghana’s infant oil industry and further deepen local participation in the interest of the Ghanaian public.
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