Page 17, JUne 30, 2009
Story: Emmanuel Adu-Gyamerah & Daniel Nkrumah
THE Committee on Constitutional, Legal and Parliamentary Affairs has recommended an amendment of Act 463, which makes provisions on the appointment, tenure and other conditions of service of the Presidential Office Staff.
According to the committee, the amendment should be done “to enable the Office of the President to present to the House a more comprehensive report which would capture, among others, some achievements and challenges, if any, that confront the presidency”.
In its report on the 2008 annual report of the Presidential Office Staff, the committee observed that the 2008 Annual Report like those of previous years provided information on just the staffing position at the presidency, which the committee considered to be unsatisfactory.
The committee noted that although unsatisfactory, the format and content of the report was in compliance with Act 463 hence the need to amend it.
The report noted that the 2008 Annual Report of the Presidential Office Staff covered the number of staff employed at the office of the President, the ranks and grades of appointed staff and employees in other public services assigned to the Office of the President.
It said the presidential staffers at post during the year under review totalled seven, and by designation included the Chief of Staff and Minister of Presidential Affairs, Chief Advisor to the President, a Minister of State, Secretary to the President, Secretary to the Cabinet and two deputy ministers.
The report said there were 17 other officers which included three senior special aides to the President, two senior special aides to the Vice President, a special assistant to the President, press secretary to the President and a writer in-residence.
“There was also a nine-member team who were responsible for policy co-ordination, monitoring and evaluation at the Presidency,” the report noted.
It said there was also a third category of officers who were employees of public sector organisations assigned to the presidency. It indicated that those officers included civil servants of various classes as well as other staff on attachment from the Department of Parks and Garden, Ghana Health Service, Controller and Accountant-General Office, Audit Service, Ghana National Fire Service and the Public Works Department, making a total of 241.
It said the last category of employees were the household staff which totalled 372, adding that those employees served at the Office of the President, including various residential and official facilities for the presidency across the entire country.
“In sum, a total of 613 persons worked at the presidency during the period in question,” the report stated.
Monday, July 6, 2009
French agency approves funding for project
Page 17, June 30, 2009
Story: Emmanuel Adu-Gyamerah & Daniel Nkrumah
THE French Development Agency, Agence France Development, has approved a funding of 30 million euro for the construction of the 15-kilometre Awoshie-Pokuase Road Project.
The amount forms part of the project’s estimated total cost of 92.41 million euros.
The Minister of Roads and Highways, Mr Joe Kwashie Gidisu, who disclosed this in Parliament, said the African Development Bank (AfDB) was considering the provision of additional funding.
The government would also provide a counterpart funding of Gh¢8.5 million for the payment of compensation to owners whose property would be affected by the project.
Mr Gidisu, was answering a question posed by Mr Enerst Attuquaye Armah, the Member of Parliament (MP) for Trobu-Amasaman, who wanted to know when the project would begin.
The minister stated that tendering for the project would commence in April 2010, while construction was expected to begin in August, next year for an approximate duration of three years.
For his part, the MP for Nanton, Alhaji Iddrisu Abdul-Karim, Mr Gidisu enquired from the minister what plans his ministry had towards the maintenance of the main trunk road from Tamale through Nanton, Karaga and Gushiegu, which was currently in a very bad shape.
Answering the question, Mr Gidisu explained that the worst section of the road, which stretches from the Tampion Dam to Zilungu, was awarded to Shiraco Investment Company Limited on December 2008 for regravelling at the cost of Gh¢392,175.
He said due to poor performance by the contractor, Ghana Highways Authority had recommended the termination of the contract to allow for its repackaging.
Mr Gidisu also told the House that the AfDB had indicated its interest in providing funding for the reconstruction of the144-kilometre Fufulso-Damango-Sawla road.
Answering another question posed by the MP for Damango/Daboya, Mr Sammy Bavug Wusah, the minister explained that the ministry had requested Ghana Highway Authority to update the estimated cost of the project to enable the government submit a funding application to the AfDB for consideration.
He said it was expected that the reconstruction work would begin in the latter part of 2010, adding that routine maintenance works would continue to be carried out on the road this year.
Story: Emmanuel Adu-Gyamerah & Daniel Nkrumah
THE French Development Agency, Agence France Development, has approved a funding of 30 million euro for the construction of the 15-kilometre Awoshie-Pokuase Road Project.
The amount forms part of the project’s estimated total cost of 92.41 million euros.
The Minister of Roads and Highways, Mr Joe Kwashie Gidisu, who disclosed this in Parliament, said the African Development Bank (AfDB) was considering the provision of additional funding.
The government would also provide a counterpart funding of Gh¢8.5 million for the payment of compensation to owners whose property would be affected by the project.
Mr Gidisu, was answering a question posed by Mr Enerst Attuquaye Armah, the Member of Parliament (MP) for Trobu-Amasaman, who wanted to know when the project would begin.
The minister stated that tendering for the project would commence in April 2010, while construction was expected to begin in August, next year for an approximate duration of three years.
For his part, the MP for Nanton, Alhaji Iddrisu Abdul-Karim, Mr Gidisu enquired from the minister what plans his ministry had towards the maintenance of the main trunk road from Tamale through Nanton, Karaga and Gushiegu, which was currently in a very bad shape.
Answering the question, Mr Gidisu explained that the worst section of the road, which stretches from the Tampion Dam to Zilungu, was awarded to Shiraco Investment Company Limited on December 2008 for regravelling at the cost of Gh¢392,175.
He said due to poor performance by the contractor, Ghana Highways Authority had recommended the termination of the contract to allow for its repackaging.
Mr Gidisu also told the House that the AfDB had indicated its interest in providing funding for the reconstruction of the144-kilometre Fufulso-Damango-Sawla road.
Answering another question posed by the MP for Damango/Daboya, Mr Sammy Bavug Wusah, the minister explained that the ministry had requested Ghana Highway Authority to update the estimated cost of the project to enable the government submit a funding application to the AfDB for consideration.
He said it was expected that the reconstruction work would begin in the latter part of 2010, adding that routine maintenance works would continue to be carried out on the road this year.
MDAs, MMDAs not complying with regulations — Report
Page 17, June 29, 2009
Story: Emmanuel Adu-Gyamerah & Daniel Nkrumah
THE Finance Committee of Parliament has noted in a report that Ministries Departments and Agencies (MDAs) and Municipal, Metropolitan and District Assemblies (MMDAs) were not complying with statutory regulations and government directives in the preparation of audit reports.
In its report on the Internal Audit Agency for 2006, the committee said the non-compliance was found mainly in the non-maintenance and update of asset register, non-preparations of bank reconciliation statements, inadequate controls over value books and unauthorised use of internally generated funds.
The committee also noted that 42 institutions, covering 58 per cent, had no Audit Report Implementation Committees (ARICs) in place with mandate to consider and implement audit reports.
“The Agency, therefore, needs further collaboration with the Auditor-General’s office to facilitate the process and to ensure that MDAs and MMDAs set up their Audit Implementation Committees,” the report said.
According to the report, the committee observed that out of the 121 internal audit report received, only 25 met the quality standards of the Agency’s expectation in terms of form and content.
It added that the remaining 96 fell short in terms of improper development of audit findings, non-inclusion of management responses and poor follow-up of previous audit recommendations.
The committee also noted in the report that out of a total budgeted expenditure of 13,103,508,948.00 cedis approved by Parliament, 12,457,823,047.00 cedis was released to the Agency and the actual expenditure amounted to 11,309,035,551.00 cedis resulting in a variance of 1,148,787,496.00 cedis.
“The variance of 1,148,787,496.00 cedis was used to support the work plan for the year 2007,” the report added.
The committee also noted that the Agency had been moving from one rented office to another and recommended that the Agency should be provided with the needed funding to put up an office accommodation.
The report also made reference to the “vast difference” between the total revenue for the year under review, which was 12,457,823,048.00 cedis and total expenditure including depreciation of 8,357,911,244.00 resulting in excess of revenue over expenditure of 4,099,911,804.00 cedis.
It added that it was explained by the Director-General that the excess of revenue over expenditure for the year was due to the annual accrual concept used by the Agency to prepare its accounts.
Story: Emmanuel Adu-Gyamerah & Daniel Nkrumah
THE Finance Committee of Parliament has noted in a report that Ministries Departments and Agencies (MDAs) and Municipal, Metropolitan and District Assemblies (MMDAs) were not complying with statutory regulations and government directives in the preparation of audit reports.
In its report on the Internal Audit Agency for 2006, the committee said the non-compliance was found mainly in the non-maintenance and update of asset register, non-preparations of bank reconciliation statements, inadequate controls over value books and unauthorised use of internally generated funds.
The committee also noted that 42 institutions, covering 58 per cent, had no Audit Report Implementation Committees (ARICs) in place with mandate to consider and implement audit reports.
“The Agency, therefore, needs further collaboration with the Auditor-General’s office to facilitate the process and to ensure that MDAs and MMDAs set up their Audit Implementation Committees,” the report said.
According to the report, the committee observed that out of the 121 internal audit report received, only 25 met the quality standards of the Agency’s expectation in terms of form and content.
It added that the remaining 96 fell short in terms of improper development of audit findings, non-inclusion of management responses and poor follow-up of previous audit recommendations.
The committee also noted in the report that out of a total budgeted expenditure of 13,103,508,948.00 cedis approved by Parliament, 12,457,823,047.00 cedis was released to the Agency and the actual expenditure amounted to 11,309,035,551.00 cedis resulting in a variance of 1,148,787,496.00 cedis.
“The variance of 1,148,787,496.00 cedis was used to support the work plan for the year 2007,” the report added.
The committee also noted that the Agency had been moving from one rented office to another and recommended that the Agency should be provided with the needed funding to put up an office accommodation.
The report also made reference to the “vast difference” between the total revenue for the year under review, which was 12,457,823,048.00 cedis and total expenditure including depreciation of 8,357,911,244.00 resulting in excess of revenue over expenditure of 4,099,911,804.00 cedis.
It added that it was explained by the Director-General that the excess of revenue over expenditure for the year was due to the annual accrual concept used by the Agency to prepare its accounts.
Five ministers to answer questions in Parliament
Page 17, June 29, 2009
Story: Emmanuel Adu-Gyamerah & Daniel Nkrumah
FIVE ministers are expected to be invited to Parliament this week to answer various questions from the floor of the House.
They are the Minister of the Interior, Mr Cletus Avoka; Minister of Transport, Mr Mike Hammah; Minister of Education, Mr Alex Tetteh-Enyo; Minister of Youth and Sports, Mr Rashid Pelpuo, and the Minister of Health, Dr George Sipa Yankey.
The Majority Leader and Chairman of the Business Committee of Parliament, Mr A. S. K. Bagbin, told the House that in all, 22 questions are expected to be asked.
Key amongst them is one to be posed to the acting Minister of Youth and Sports, Mr Rashid Pelpuo, by the Member of Parliament (MP) for Atwima Mponua, Mr Isaac Kwame Asiamah, on the level of preparations for the pending African Hockey Championship slated to be held in the country in July this year.
Mr Isaac Asiamah had raised the issue some days back but because of the absence of a Minister of Youth and Sports, following the president’s directive to the then Minister, Muntaka Mohammed, to proceed on leave, the issue could not be addressed.
The Majority Leader told the House that papers to be laid in the coming week included reports of the Auditor-General on the statement of Foreign Exchange receipts and payments of the Bank of Ghana for the two half years ended December 31, 2005 and also for the two half years ended December 31, 2007.
Other papers to be laid include the report of the Auditor-General on the Public Accounts of Ghana (Consolidated Fund) for the year ended December 31, 2007 as well as the Public Accounts Committee on the report of the Auditor General on the National and Regional Houses of Chiefs and traditional councils for the period 2001-2004.
Story: Emmanuel Adu-Gyamerah & Daniel Nkrumah
FIVE ministers are expected to be invited to Parliament this week to answer various questions from the floor of the House.
They are the Minister of the Interior, Mr Cletus Avoka; Minister of Transport, Mr Mike Hammah; Minister of Education, Mr Alex Tetteh-Enyo; Minister of Youth and Sports, Mr Rashid Pelpuo, and the Minister of Health, Dr George Sipa Yankey.
The Majority Leader and Chairman of the Business Committee of Parliament, Mr A. S. K. Bagbin, told the House that in all, 22 questions are expected to be asked.
Key amongst them is one to be posed to the acting Minister of Youth and Sports, Mr Rashid Pelpuo, by the Member of Parliament (MP) for Atwima Mponua, Mr Isaac Kwame Asiamah, on the level of preparations for the pending African Hockey Championship slated to be held in the country in July this year.
Mr Isaac Asiamah had raised the issue some days back but because of the absence of a Minister of Youth and Sports, following the president’s directive to the then Minister, Muntaka Mohammed, to proceed on leave, the issue could not be addressed.
The Majority Leader told the House that papers to be laid in the coming week included reports of the Auditor-General on the statement of Foreign Exchange receipts and payments of the Bank of Ghana for the two half years ended December 31, 2005 and also for the two half years ended December 31, 2007.
Other papers to be laid include the report of the Auditor-General on the Public Accounts of Ghana (Consolidated Fund) for the year ended December 31, 2007 as well as the Public Accounts Committee on the report of the Auditor General on the National and Regional Houses of Chiefs and traditional councils for the period 2001-2004.
MPs get E-zwich cards
Page 14, June 14, 2009
Story: Emmanuel Adu-Gyamerah
THE Standard Chartered Bank on Wednesday began a two-day exercise to issue E-zwich cards to Members of Parliament (MPs) and staff of the Parliamentary Service.
According to officials of the bank, the exercise was aimed at educating the MPs to be aquainted with the new electronic system of transaction to assist them to educate their constituents about the system.
Briefing the MPs about the benefits of the exercise, the General Manager of Wealth Management of the bank, Mr Benjamin Mensah, explained that the e-zwich worked both on line and off line.
That means that it did not require an active connection to a bank to complete a transaction.
He stated that the system would eventually reduce cash holdings, bank charges, communication cost, reconciliation problems and the maximisation of risks associated with fraud.
Mr Mensah said the bank’s quest to issue the cards for its customers as well as others had been successful.
He said the bank was now in its second stage of the programme during which holders of the E-zwich cards would be encouraged to activate them so as to enable the use of the card to transact their daily businesses.
The MP for Nkwanta South, Mr Geshon Gbediame, asked his colleagues to take advantage of the exercise to own an E-zwich card to assist them in their transactions.
He thanked authorities of the bank for bringing their services to the doorsteps of the MPs.
Story: Emmanuel Adu-Gyamerah
THE Standard Chartered Bank on Wednesday began a two-day exercise to issue E-zwich cards to Members of Parliament (MPs) and staff of the Parliamentary Service.
According to officials of the bank, the exercise was aimed at educating the MPs to be aquainted with the new electronic system of transaction to assist them to educate their constituents about the system.
Briefing the MPs about the benefits of the exercise, the General Manager of Wealth Management of the bank, Mr Benjamin Mensah, explained that the e-zwich worked both on line and off line.
That means that it did not require an active connection to a bank to complete a transaction.
He stated that the system would eventually reduce cash holdings, bank charges, communication cost, reconciliation problems and the maximisation of risks associated with fraud.
Mr Mensah said the bank’s quest to issue the cards for its customers as well as others had been successful.
He said the bank was now in its second stage of the programme during which holders of the E-zwich cards would be encouraged to activate them so as to enable the use of the card to transact their daily businesses.
The MP for Nkwanta South, Mr Geshon Gbediame, asked his colleagues to take advantage of the exercise to own an E-zwich card to assist them in their transactions.
He thanked authorities of the bank for bringing their services to the doorsteps of the MPs.
. . . But Minority wants GNPC boss replaced
Page 14, June 27, 2009
Story: Emmanuel Adu-Gyamerah & Daniel Nkrumah
THE Minority in Parliament has urged the President to reconsider the appointment of Nana Boakye Asafu-Adjaye as the acting Chief Executive of the Ghana National Petroleum Corporation (GNPC).
According to the Minority, the appointment of Nana Asafu-Adjaye, who is former Country Director of Vanco Energy Company, presents a potential case of conflict of interest, because Vanco was negotiating an agreement with the GNPC and the Government of Ghana for oil exploratory activities.
The Member of Parliament (MP) for Essikado-Ketan and former Attorney General, Mr Joe Ghartey, argued strongly against the appointment of Nana Asafu-Adjaye, stressing that by virtue of the GNPC’s position as the major regulator of the sector, there was the need for the President to reconsider that appointment.
Mr Ghartey defied interventions from First Deputy Speaker, who argued that the ministry also had regulatory functions and stressed that “it is quite clear that the major regulator is GNPC,” adding that “the Ministry of Energy deals with policies and not regulations”.
He said Nana Asafu-Adjaye’s association with Vanco as the Country Director raised concerns, and urged the House to impress on the President to reconsider the appointment of Nana Asafu-Adjaye.
Quoting Matthew 27: 24, he said the Minority wished to take inspiration from Pontius Pilate and dissociate itself from the appointment of the acting boss of the GNPC, although it fully endorsed the agreement.
The MP for Manhyia, Dr Matthew Opoku Prempeh, also shared similar sentiments and said the appointment of the acting GNPC boss presented a kind of conflict of interest he described as “revolving door politics”.
“The conflict of interest is so glaring; if we say that we are not sure, then we are behaving like ostriches,” he emphasised.
He said the Minority was not against the agreement with Vanco, but advised the President to appoint Nana Asafu-Adjaye in another position.
However, those assertions were countered by the First Deputy Speaker, Mr Edward Doe Adjaho, who said Nana Asafu-Adjaye was an objective personality who had demonstrated that he had the interest of the country at heart.
He said with Nana Asafu-Adjaye in the saddle as GNPC boss, the country had negotiated agreement with Vanco when compared to the previous one ratified by the Parliament of Ghana in 2002.
He said the concerns raised over his appointment were as a result of the fact that there were no clear provisions on conflict of interest, and said it was time to pass appropriate legislation on conflict of interest.
For his part, the Minority Leader, Mr Osei Kyei-Mensah-Bonsu, argued that though his side of the House supported the agreement, they were against the former representative of VANCO being made the acting boss of the GNPC.
He said there was no doubt that his position would negatively affect other oil companies who were dealing with the country to the advantage of VANCO.
The Majority Leader, Mr Alban Bagbin, thanked members of the House for supporting the agreement and stated their comments were legitimate.
He sided with the suggestion by the committee that efforts should be made for the enactment of a law to properly define the parameters of conflict of interest.
Mr Bagbin asked the executive to take comments made on the floor of the House on board, so that the right decisions could be taken to make the country’s oil find to be a blessing and not a curse.
Story: Emmanuel Adu-Gyamerah & Daniel Nkrumah
THE Minority in Parliament has urged the President to reconsider the appointment of Nana Boakye Asafu-Adjaye as the acting Chief Executive of the Ghana National Petroleum Corporation (GNPC).
According to the Minority, the appointment of Nana Asafu-Adjaye, who is former Country Director of Vanco Energy Company, presents a potential case of conflict of interest, because Vanco was negotiating an agreement with the GNPC and the Government of Ghana for oil exploratory activities.
The Member of Parliament (MP) for Essikado-Ketan and former Attorney General, Mr Joe Ghartey, argued strongly against the appointment of Nana Asafu-Adjaye, stressing that by virtue of the GNPC’s position as the major regulator of the sector, there was the need for the President to reconsider that appointment.
Mr Ghartey defied interventions from First Deputy Speaker, who argued that the ministry also had regulatory functions and stressed that “it is quite clear that the major regulator is GNPC,” adding that “the Ministry of Energy deals with policies and not regulations”.
He said Nana Asafu-Adjaye’s association with Vanco as the Country Director raised concerns, and urged the House to impress on the President to reconsider the appointment of Nana Asafu-Adjaye.
Quoting Matthew 27: 24, he said the Minority wished to take inspiration from Pontius Pilate and dissociate itself from the appointment of the acting boss of the GNPC, although it fully endorsed the agreement.
The MP for Manhyia, Dr Matthew Opoku Prempeh, also shared similar sentiments and said the appointment of the acting GNPC boss presented a kind of conflict of interest he described as “revolving door politics”.
“The conflict of interest is so glaring; if we say that we are not sure, then we are behaving like ostriches,” he emphasised.
He said the Minority was not against the agreement with Vanco, but advised the President to appoint Nana Asafu-Adjaye in another position.
However, those assertions were countered by the First Deputy Speaker, Mr Edward Doe Adjaho, who said Nana Asafu-Adjaye was an objective personality who had demonstrated that he had the interest of the country at heart.
He said with Nana Asafu-Adjaye in the saddle as GNPC boss, the country had negotiated agreement with Vanco when compared to the previous one ratified by the Parliament of Ghana in 2002.
He said the concerns raised over his appointment were as a result of the fact that there were no clear provisions on conflict of interest, and said it was time to pass appropriate legislation on conflict of interest.
For his part, the Minority Leader, Mr Osei Kyei-Mensah-Bonsu, argued that though his side of the House supported the agreement, they were against the former representative of VANCO being made the acting boss of the GNPC.
He said there was no doubt that his position would negatively affect other oil companies who were dealing with the country to the advantage of VANCO.
The Majority Leader, Mr Alban Bagbin, thanked members of the House for supporting the agreement and stated their comments were legitimate.
He sided with the suggestion by the committee that efforts should be made for the enactment of a law to properly define the parameters of conflict of interest.
Mr Bagbin asked the executive to take comments made on the floor of the House on board, so that the right decisions could be taken to make the country’s oil find to be a blessing and not a curse.
Parliament approves petroleum agreement
Page 14, June 27, 2009
Story: Emmanuel Adu-Gyamerah & Daniel Nkrumah
PARLIAMENT has approved the petroleum agreement among the Republic of Ghana, Ghana National Petroleum Corporation (GNPC) and Vanco Ghana Limited and Lukoil Overseas Ghana Limited in respect of Cape Three Point Deepwater Block Offshore Ghana.
According to the committee, the contract is “a good one and is in the interest of the nation” and also “an improvement over the original Vanco agreement ratified by the House in 2002”.
In its report on the agreement, the committee noted that the agreement was negotiated within the framework of the Petroleum (Exploration and Production) Law 1984, PNDCL 84.
According to the report, in the new Petroleum Agreement, Vanco, the current operators would have 28.339 per cent ownership interest and Lukoil would also have 56.661 per cent ownership and would thus be the operators of the project after the drilling of the first exploratory well.
The report said, “GNPC has 15 per cent carried interest through exploration and development,” adding that “GNPC has the option to take an additional paying interest of up to five per cent upon commercial discovery”.
According to the report, the agreement provided an exploration period of five years which comprised an initial exploration period of three years, first extension period of one year and a second and final extension period of one year.
It said within the first three years, the contractor shall acquire, process and interpret a minimum of 1,500 square kilometers of new 3-D seismic data and shall drill a minimum of two exploration wells in the contract area.
“The contractor shall invest a minimum of $100,000,000.00 for work in the initial exploration period,” the report added.
It indicated that in the second exploration period, the contractor shall reprocess existing data where required and drill a minimum of one exploration well in the contract area with a minimum expenditure for the first extension period pegged at $45,000,000.00.
The third extension period also has same schedules and expenditure requirement, the report noted.
It said in the event of commercial discovery, benefits to be accrued to the state were Royalties: Oil (Shallow Water), 12 per cent, Oil (Deep water) 10 per cent, Gas, 5.0 per cent; GNPC carried interest, 15 per cent; GNPC additional interest, 5.0 per cent; Corporate Income tax, 35 per cent.
It said under the new agreement, the state shall be the sole owner of any associated gas produced from the contract area and gave the GNPC the right to take off all associated gas for its own use.
The report also indicated that the new agreement required the applicants to pay to the GNPC $200,000.00 annually during the initial exploration and extension periods and $300,000.00 during the development and productions periods.
“This is to help GNPC develop a programme to train Ghanaians in management and technical skills associated with petroleum operations,” the report said.
It said other benefits to the state included additional oil entitlements upon the attainment of agreed Rates of Returns and also surface rental charges.
The report said during deliberations, the committee observed that as part of the agreement, Vanco Ghana Limited and Lukoil Overseas Ghana Limited had their registered mail and contact addresses at Houston, Texas in USA and Moscow, Russia respectively.
It said the committee was of the view that such an arrangement would put additional responsibility on the State during its dealings with the contractor, adding that as a condition for recommending the agreement for approval, the committee directed that Vanco and Lukoil should provide their contacts to their registered addresses and telephone numbers in Ghana.
It said subsequently that the applicants had provided their local addresses.
Story: Emmanuel Adu-Gyamerah & Daniel Nkrumah
PARLIAMENT has approved the petroleum agreement among the Republic of Ghana, Ghana National Petroleum Corporation (GNPC) and Vanco Ghana Limited and Lukoil Overseas Ghana Limited in respect of Cape Three Point Deepwater Block Offshore Ghana.
According to the committee, the contract is “a good one and is in the interest of the nation” and also “an improvement over the original Vanco agreement ratified by the House in 2002”.
In its report on the agreement, the committee noted that the agreement was negotiated within the framework of the Petroleum (Exploration and Production) Law 1984, PNDCL 84.
According to the report, in the new Petroleum Agreement, Vanco, the current operators would have 28.339 per cent ownership interest and Lukoil would also have 56.661 per cent ownership and would thus be the operators of the project after the drilling of the first exploratory well.
The report said, “GNPC has 15 per cent carried interest through exploration and development,” adding that “GNPC has the option to take an additional paying interest of up to five per cent upon commercial discovery”.
According to the report, the agreement provided an exploration period of five years which comprised an initial exploration period of three years, first extension period of one year and a second and final extension period of one year.
It said within the first three years, the contractor shall acquire, process and interpret a minimum of 1,500 square kilometers of new 3-D seismic data and shall drill a minimum of two exploration wells in the contract area.
“The contractor shall invest a minimum of $100,000,000.00 for work in the initial exploration period,” the report added.
It indicated that in the second exploration period, the contractor shall reprocess existing data where required and drill a minimum of one exploration well in the contract area with a minimum expenditure for the first extension period pegged at $45,000,000.00.
The third extension period also has same schedules and expenditure requirement, the report noted.
It said in the event of commercial discovery, benefits to be accrued to the state were Royalties: Oil (Shallow Water), 12 per cent, Oil (Deep water) 10 per cent, Gas, 5.0 per cent; GNPC carried interest, 15 per cent; GNPC additional interest, 5.0 per cent; Corporate Income tax, 35 per cent.
It said under the new agreement, the state shall be the sole owner of any associated gas produced from the contract area and gave the GNPC the right to take off all associated gas for its own use.
The report also indicated that the new agreement required the applicants to pay to the GNPC $200,000.00 annually during the initial exploration and extension periods and $300,000.00 during the development and productions periods.
“This is to help GNPC develop a programme to train Ghanaians in management and technical skills associated with petroleum operations,” the report said.
It said other benefits to the state included additional oil entitlements upon the attainment of agreed Rates of Returns and also surface rental charges.
The report said during deliberations, the committee observed that as part of the agreement, Vanco Ghana Limited and Lukoil Overseas Ghana Limited had their registered mail and contact addresses at Houston, Texas in USA and Moscow, Russia respectively.
It said the committee was of the view that such an arrangement would put additional responsibility on the State during its dealings with the contractor, adding that as a condition for recommending the agreement for approval, the committee directed that Vanco and Lukoil should provide their contacts to their registered addresses and telephone numbers in Ghana.
It said subsequently that the applicants had provided their local addresses.
Subscribe to:
Posts (Atom)