Regulatory certainty is crucial to attract more investments to the oil and gas sectors to add on to the country’s fossil reserves, the Co-chair of the Ghana Extractive Industry Initiative (GHEITI), Dr Steve Manteaw, has stated.
He noted that numerous oil and gas companies have expressed concerns regarding regulatory ambiguities and the unpredictable nature of the government’s introduction of new fiscal regulations and terms, which have hindered the country’s ability to secure new investments in these sectors.
Dr Manteaw stated this in an interview to reporters during the GHETI Technical workshop, in which he discussed the 2021/2022 GHETI Reports for the Mining and Oil and Gas sector, organised by the GHEITI Secretariat.
During the programme, the oil and gas reports for 2021/2022 revealed that the country’s oil production for the past four years has been plummeting due to lack of investment to drill new wells in order to increase the country’s oil production.
Dr Manteaw said if the country did not add to its reserves in the next 15 to 20 years, Ghana’s oil and industry would grind to a halt.
The Co-Chair of GHEITI highlighted that the Jubilee, TEN, Gye Nyame and Sankofa fields had almost exhausted more than 50 per cent of their reserves and the country needed more investment to get new oil production on stream.
Moreover, Dr Manteaw said during an interaction with some oil and gas companies as part of an Energy Transition study he undertook, they complained about the regulatory uncertainty by the government in the oil and gas sector.
He further indicated that the regulatory uncertainty, especially on the fiscal terms threw the financials of the oil and gas companies out of gear
According to Dr Manteaw, when the oil and gas companies flagged their stability agreements, government brushed them aside and that had resulted the numerous litigation between the oil and gas companies and the government?
“When there are disputes, I would expect that at least if it’s beyond the Minister of Energy, the President should step in and seek to address the issues more amicably than going for international arbitration. Because the more frequent you are at international arbitration, the more likely that you’ll be sending a wrong signal to the investor community that this is a hard place to work. And I think we need to be mindful of this particular risk to investments in making state policies,” Dr Manteaw stated.
The Co-Chair of GHEITI said another reason the country had not been able to attract additional investments to bring new projects on stream was a result of the small sizes of the country’s oil blocks, saying that was the reason ExxonMobil left the country for Guyana.
BY KINGSLEY ASARE