5% local stake in ExxonMobil deal requires openness – PIAC member
A member of the Public Interest and Accountability Committee (PIAC), Dr. Steve Manteaw, has called on government to ensure transparency in the process leading to selection of a local partner for ExxonMobil in the Deep-Water Cape Three Points (DWCTP) oil contract.
The contract, signed last week, has ExxonMobil – the lead operator – holding 80 percent interest, while the state holds 15 percent as ‘carried interest’; and a yet-to-be named local partner is supposed to hold the remaining 5 percent as required by the new Petroleum Exploration and Production law, Act 919.
Speaking to the B&FT on the sidelines of a workshop organised by PIAC in Koforidua over the weekend, Dr. Manteaw said the process for selecting the local partner must be made open and transparent – in a way that avoids any situation of fronting and rent-seeking.
“There is a way we can get value for money by getting the right local investor to partner the lead operator,” Dr. Manteaw said at the workshop which was organised in collaboration with the Institute of Financial and Economic Journalists (IFEJ).
With the agreement subject to ratification by parliament, the PIAC member stated that should ExxonMobil not find any suitable local partner, the remaining five percent of the interest in the oil field should be seeded to the Ghana National Petroleum Corporation (GNPC).
“If we are unable to identify that local partner, in my view, the option will be to assign that five percent to GNPC so as to increase its equity in the project – and that would also count for local content,” Dr. Manteaw added.
Speaking at last week’s signing ceremony, Chief Executive Officer of GNPC, Dr. K.K. Sarpong, stressed the need for enforcement of local content policies to afford Ghanaians opportunities in the execution of the ExxonMobil contract.
“In terms of local content policies, the laws have been strengthened and the Petroleum Commission is at the forefront of enforcing the laws; and we at GNPC have the sustainability and localisation department, which tries to make sure that we bring our partners’ attention to the mode of operation so we can take advantage to get benefits for our local people – both corporates and individuals,” he said.
Best deal so far
The Energy Minister Boakye Agyarko, speaking at the agreement’s signing, said the deal is among the best compared to other agreements signed in the past, as it is a culmination of lessons learnt in the ten years of the sector.
The minister defended government’s decision for going into direct negotiations with Exxonmobil, instead of opening the block to tender which the law gives preference to, by insisting that Exxonmobile is about the most competent in ‘ultradeep’ exploration.
In any case, government has argued, the block has been relinquished twice – by Vanco Energy and Lukoil – which has increased its risk profile.
Besides, it argues that the DWCTP is one of the ultra-deepwater blocks; and aside from Exxonmobil, not many oil companies have the technological and technical wherewithal to work that deep beneath the ocean.