The Ghana Upstream Petroleum Chamber has called on the Secretary to the Economic Management Team, Prof. Joe Amoako-Tuffour in the Vice President’s office at Jubilee House.
ACCRA, MARCH 8, 2020.
Veteran Journalist and Communications Strategist David Ampofo has been appointed the new CEO of the Ghana Upstream Petroleum Chamber. David takes over from Charles Darku (Former Managing Director of Tullow Oil Ghana) who was the first Chairman and CEO, and who is credited with operationalising the Chamber.
The Chairman of the Council of the Chamber, Kweku Awotwi, who is the Executive Vice President of Tullow PLC says, “We are happy to have David join us and trust that David’s good advocacy skills will not only benefit the members of the Chamber, but the industry as a whole. David has distinguished himself as a Public Affairs professional, a passionate advocate and a critical thinker with outstanding communication skills.”
Commenting on his appointment, David said, “I am looking forward to working with members and all industry stakeholders, including the government, in a collective effort to ensure that there is maximum value realised for both investors and the people of Ghana.”
About The Chamber
The Upstream Chamber represents the shared interests of companies involved in oil and gas exploration and production as well as oil field services in the country. The Chamber promotes, enhances and facilitates the growth of the industry through networking, education, industry information and advocacy for a favourable business environment. As the voice of the industry, the Chamber provides advocacy services to its members and helps them navigate the regulatory framework.
The Chamber also offers a platform through which the industry can be reached by stakeholders from across the economy, including local communities.
The launch of the Ghana Upstream Petroleum Chamber (GUPC) on 30th January 2019, saw the initiation of a formalised platform serving as an advocacy instrument for Oil and Gas industry players and a focal point for collective interests.
The event brought together many of Ghana’s oil and gas industry players, including the Deputy Minister of Energy responsible for Petroleum Dr. Amin Adam -, Petroleum Commission CEO Egbert Faibille, Chamber Board members, and representatives of International Oil Companies (IOCs) and Local Service companies.
The Chamber’s board members include Tullow Ghana Limited, ENI, Anadarko, Kosmos Energy, Aker Energy and Vitol. Tullow has played a significant role, providing financial support and technical knowledge for the creation and official launch of the upstream chamber.
In 2010, Ghana’s oil and gas players formed an informal group known as the Ghana Exploration and Production Forum; however, the growth of and increased activity within Ghana’s oil and gas sector drove the need for a more formalised entity. The existence of three producing fields – Jubilee, TEN and Sankofa, the entrant of new players such as Aker, and increasing local participation set the right environment for the formal establishment of the GUPC. Membership of the GUPC is open to Exploration & Production (E&P) companies and Service Companies providing goods and services to upstream E&P operators in Ghana. The Chamber is aimed at:
- Distributing Industry development and investment information;
- Networking with government, public institutions, and private sector organisations; and
- Collaborating with Government and other stakeholders for a better business climate.
These will be achieved through continuous dialogue, engagement and feedback with all stakeholders on policy formulation as well as legislation on business operations and activities of the oil and gas industry. Former Tullow Ghana Limited managing director Charles Darku is the first chief executive officer of the GUPC. In his remarks at the launch, he stated, “the objective of the Chamber is to create a common platform for its members and liaise with all stakeholders to adopt international best practices that are fit for our purpose to grow the industry in Ghana.”
Speaking at the official launch, Petroleum Commission Chief Executive Egbert Faibille Jnr cautioned companies to avoid violation of Ghana’s local content laws. He said, “the regulator is ready to go further to implement laws that seek to protect and develop Ghanaians.”
In his keynote address, Deputy Minister for Energy, Dr. Mohammed Amin Adam, reiterated the importance of an enabling environment for business growth and the roles GUPC and Petroleum Commission have the opportunity to play. He stated,
“GUPC provides a platform on which government can reach out to industry stakeholders. We understand that the objective of the Chamber is to make meaningful and constructive engagement between exploration and production companies, service companies and other sectors within the industry and we fully support it.”
He concluded by reminding the Petroleum Commission of its role in providing an enabling environment for growth. Also providing solidarity messages were the CEO of the Ghana Chamber of Mines, Mr. Sulemana Koney and the Deputy Minister for Fisheries, Mr. Francis Kingsley Ato Codjoe.
In his closing remarks, Mr. Darku stressed that, “the Chamber is set up to pursue the interests of all members whether they be small indigenous companies or large international oil companies. As a diverse group, we will look out for the specific interests of all.” Overall, industry players exuded a sense of hope and confidence in the role of GUPC and the great opportunities it presents for deepening collaboration and networking for the future of Ghana’s oil and gas industry.
The Chief Executive Officer of the National Petroleum Authority, Mr Alhassan Tampuli has said the Authority is in close collaboration with the Ghana Revenue Authority (GRA), the Navy and other relevant security agencies to tackle the numerous of industry problems head-on.
Some of the measures include intensification of digital solutions like the Bulk Road Tracking System, the integration of the Ghana Community Network and GRA Monitoring Platform into the Enterprise Relational Management System for harmonisation of information and monitoring.
Mr. Tampuli made this known at the second edition of the Ghana International Petroleum Conference in Accra on the theme: ‘‘Realising the Vision of a Petroleum Hub’’.
The four-day event was under the auspices of the Energy Ministry and Ghana Chamber of Bulk Oil Distributors, in collaboration with the National Petroleum Authority and Association of Oil Marketing Companies.
It brought together key stakeholders in the petroleum downstream sector including policy-makers, regulators and oil service providers, to deliberate on policies and trends in the sector, as well as discuss pertinent issues affecting the industry in the bid to guide decision-making.
The participants are expected to come out with some recommendations to help resolve challenges in the petroleum downstream sector and chart the way forward.
Mr. Tampuli said the Authority would ensure due processes for export and bunkering of petroleum products as well as applying stiffer punishment for offenders including withdrawal of licences.
“Recalcitrant service providers will be made known to the public by way of naming and shaming offenders and directors would be banned from participating in any activities in the downstream petroleum sector,” he warned.
Mr Tampuli gave the assurance that all unpaid taxes would be recovered, noting that the recent measures had seen the Authority saving the nation nearly GHC16 million in tax revenue alone and GHC 7 million in unpaid margins.
He said the Authority had intensified its safety compliance inspections on all petroleum products destinations nationwide and more stringent sanctions were being enforced including the shutdown of non-compliant stations.
Mr Tampuli said it had launched a national safety campaign to raise awareness and adherence to safety protocols in the petroleum downstream sector under the slogan ‘‘People’s Safety First’’.
Additionally, the Authority was undertaking an advanced work plan for the implementation of the new Liquefied Petroleum Gas Policy regarding the Cylinder Re-Circulation Module.
Mr Tampuli gave the assurance that the Authority would ensure the security of jobs and safety of existing investments in the downstream petroleum sector as well as maintain or possibly increase the price build-up margins.He said the estimated amount was reached on the assessment made by a petroleum task force inaugurated by the Government last year to develop petroleum infrastructure master plan and road map towards the realisation of the vision.
He said the funds was supposed to come from public and private investments of which the Government was to raise 10 per cent to support the construction of roads, electricity and water facilities.
Mr Agyarko said the theme for the conference was in tandem with the Government’s vision, which was enshrined in the new National Energy Policy.
To that end, he said, the Ministry would work diligently to achieve the vision of the Government, adding that the petroleum task force had visited some countries that had made headway in petroleum infrastructure.
Therefore, the taskforce consequently engaged key stakeholders and prospective investors in the petroleum industry on the way forward.
Mr Agyarko said upon extensive consultation and assessment by the task force, government was convinced that the nation had the capacity of developing petroleum infrastructure into a hub in the sub-region.
He, therefore, urged the petroleum service providers to upgrade their skills and business capacity to partner with the Foreign Direct Investors to ensure a fair balance and significant value retention of benefits in the country.
The Energy Minister gave the assurance that the Government would provide favourable fiscal environment and incentives to attract the right investment into the petroleum downstream industry.
The Petroleum Commission has sent a signal to the oil and gas exploration companies on the Jubilee and TEN fields that it will soon recommend an action to be
taken on dormant oil blocks.
According to the Commission, out of about 17 oil blocks sold between 2013 and 2016, 13 of the blocks still exist without any exploration activity making the country lose huge investments
in the sector. Answering questions on the development at a press briefing, Chief Executive of the Petroleum Commission, Egbert Faibille Junior disclosed that the Commission will soon recommend to the Ministry of Energy to sanction or revoke the licenses of owners of these oil blocks by December this year.
We have realized that most of the oil blocks have become dormant for some time now contrary to the agreements signed between the investors and the government of Ghana. The Commission has held series of meetings with some of these owners and they requested for some ample time to get back on the blocks, as I speak that ample time has elapsed so very soon we will be making a recommendation” Egbert Faibile Junior said.
Review of petroleum deals
The quest for action to be taken follows the call from the President, Nana Akufo-Addo that some oil blocks agreements need to be reviewed. To accelerate further exploration activity, President Akufo-Addo has charged the Ministry of Energy to review existing operations in the industry, with the view to determining oil fields that are suboptimal. The review is also to cover Petroleum Agreements that are dormant. “The Energy Ministry will engage with the operators, after the review, on the adoption of best methods for increasing oil recovery rate. For Petroleum Agreements that are dormant, the Ministry will encourage the operators to consider inviting stronger partners to join them or risk the termination of these Petroleum Agreements, should they persist in failing to meet their minimum work obligations,” President Akufo-Addo stressed.
In seeking to increase Ghana’s oil reserves and improve on oil and gas production, Cabinet is expected to soon approve a ‘Blueprint and Roadmap for Accelerated Oil and Gas Exploration and Development’, which is based on a new strategy of aggressive exploration. “The strategy seeks to build synergies with the domestic downstream petroleum sector; to increase Ghanaian anticipation in the oil industry, and to accelerate the pace of institutional capacity development to manage our oil and gas resources efficiently,” President Akufo-Addo said.
The Petroleum Commission has assured small and medium enterprises (SMEs) in the downstream and upstream petroleum sector that the Enterprise Development Centre (EDC), which aims at deepening the capacities of SMEs to effectively play in the upstream oil and gas industry, will soon be re-introduced.
Speaking at the maiden Ghana Oil and Gas Service Providers Association (GOGSPA) forum at Ada, the Chief Executive Officer of the Petroleum Commission, Mr Egbert Faibille Jr, said the commission had outlined some measures under the EDC to ensure that indigenous Ghanaian businesses were competitive through capacity building programmes. He said the commission had subsequently, submitted a proposal to the Local Content Committee to re-operationalise the EDC whose functions include SME’s skills development. Mr Faibille assured them that the centre would be fully operational by the end of the year to provide the needed support to Ghanaian companies.
The EDC is a five-year government initiative spearheaded by the Ministries of Energy and Petroleum (MoEP) and Trade and Industry (MoTI) in collaboration with the Jubilee Partners, which has ended. The Centre was commissioned to provide support to Ghanaian SMEs to competitively position them to take advantage of the numerous business opportunities in the oil and gas sector through training and development; business incubation, and consultancy services.
Capacity building workshops
The CEO also pointed out that the commission, in conjunction with other stakeholders, had periodically organised capacity building workshops and seminars for SMEs with a view to enhancing their competitiveness. “This year, the PC has organised the procurement, marine services and Logistics Workshop in Takoradi, which will soon be followed by a workshop for fabricating and engineering companies to take advantage of emerging opportunities next month,” he stated. He said the commission’s new approach to Local Content took into consideration the objectives set out in the L.I. 2204, as well as the government’s agenda for accelerated oil and gas capacity development and maximisation of in-country activity. “It is, therefore, imperative that we pay critical attention to the real drivers for local content and local participation. Accordingly, the Commission has painstakingly reviewed the existing processes to make them responsive and fit-for-purpose,” he noted.
Outlining some of the key steps taken by the commission, he said it had established the petroleum register which provided up to date information on all petroleum agreements, details of the licensees, shareholders, petroleum activities, procurement plans and other information considered relevant to the public and the business community. He said the commission again in its quest to bridge the information asymmetry towards Ghanaian companies, was developing an electronic portal system (e-Portal). “The objective for developing the e-Portal is to have an open and more accessible platform for all especially local companies to participate in the tendering process. The portal will provide registered companies easy access to procurement plans and real-time notifications on tenders,” he explained.
Support for GOGSPA
The commission, he said, believes most of the challenges facing indigenous companies could easily be addressed if GOGSPA positioned itself like the Oil and Gas UK or the Norwegian Energy Partners (NORWEP). “It is very important for all of us to support GOGSPA with the needed resources and commitment to make GOGSPA more meaningful and I entreat GOGSPA executives to change their approach to make GOGSPA relevant to its members and appealing to prospective members,” he noted. He said the commission on its part as a regulator would lend its support to GOGSPA by providing necessary technical support to the association and ensure strict implementation of the Local Content Regulations.
The Oil Policy of the Government of Ghana 4.1 Transparency Measures Ghana is member of the Extractive Industries Transparency Initiative (EITI).
The organisation was launched in 2002 and “encourages government, extractive companies, International agencies and NGO’s to work together to develop a framework to promote transparency of payments in the extractive industries” [EITI Ghana, 2011]. The aim of the initiative is to create an environment of transparency and accountability between companies, governments and citizens in resource rent-seeking states.
After publishing data and independent reports on the country’s mining sector, Ghana achieved compliance with the EITI in October 2010. Even though the membership of Ghana in the EITI is a major step towards a transparent re-source management policy, it has to be noted that it is first and foremost focusing on Ghana’s mining sector. Yet, the initiative has been extended to the oil sector in April 2010. The main criticism towards the EITI is the lack of efficiency due to non-compulsory guidelines of the organisation. This deficit means that Ghana can voluntary fulfill the transparency standards of the organisation as it happened in the mining sector. However, in the oil sector, no action has been taken to improve the overall transparency because there are no legal measures that are backing up the fulfilment of EITI standards.
The current lack of transparency in Ghana’s oil policy envisages in the refusal of the Government to publish the contracts that were signed with the companies involved in the oil production (see Chapter 3.3.1).
The ‘Petroleum Revenue Management Bill’ In early 2010, the Government of Ghana proposed a ‘Petroleum Revenue Management Bill’. The purpose of this legislation is to regulate the use and management of the rents that will be generated through the oil industry. According to a publication by Dr. Amoako-Tuffour from the Ministry of Finance and Economic Planning, a central feature of the bill is to split the revenue into the Annual Budget Funding Amount (ABFA) and into two longterm funds. These funds were established to back up the country’s economy in case of oil price variability and “to generate an alternative stream of income for the future” [Amoako-Tuffour, 2010].
The bill suggests using at least 30 % of the oil revenue for the long-term funds. The other 70 % of the revenue will stream into the annual budget of the Government. The “Petroleum Revenue Management Bill” suggests various limitations for the spending of the AB-FA and also rules for reporting on oil findings and investments, along with the creation of an independent regulatory body. However, it does not provide a detailed plan that shows which sectors/ministries will profit most from the revenue.
For instance, it is not possible to directly derive investments in the infrastructure of the country from the bill. Even though it is widely appreciated that the government tries to introduce legal measure to regulate oil revenue management, the lack of details is the target of many critics [ibid]. Even more important is the fact that the bill was pending in front of the parliament for al-most a year and has still not become a law. The main conflictive issues in the parliament de-bate were the percentages of the revenue that will stream into the budget and respectively into funds and the question if a Public Interest and Accountability Committee (PIAC) should be established to enhance public accountability and transparency in the management of the petroleum revenue