Category: News

 

By Elorm Desewu

In the next couple of months, universal banks operating in the country are expected to slash their respective interest rates for their customers in the wake of the Monetary Policy Committee, (MPC) of Bank of Ghana, (BoG) decision to slash the policy rate by 1percent to 13.5 percent from 14.5 percent.

According to the governor of the BoG, Dr Ernest Addison, risks to inflation outlook appear muted in the near-term, but pressures from mostly rents and transport fares, would require some monitoring to anchor inflation expectations.

Headline inflation eased sharply to within the medium-term target band, driven mainly by lower food prices and base drift effects, a tight monetary policy stance and stable exchange rate conditions.

Since the initial shock to inflation in April 2020, the forecast showed that inflation will be close to the central target by June 2021. These forecasts remain broadly unchanged and inflation would remain within the target band in the next quarter.

This means that the hike in petroleum products and the subsequent increase in the transport fares would not have any significant effect on the non food inflation of the Consumer Price Index (CPI) basket.

The recent price developments show that headline inflation dropped sharply from 10.3 percent in March 2021 to 8.5 percent in April, almost back to pre-pandemic levels and within the medium-term target band of 8±2 percent.

The decline in the April inflation was driven by lower food prices and base drift effects. Food inflation dipped markedly to 6.5 percent in April from 8.8 percent in March, while Non-food inflation rose to 10.2 percent from 10.0 percent over the same comparative periods, on account of increases in ex-pump prices, and housing prices.

Similar to the trends in headline inflation, underlying inflation pressures eased substantially in April 2021. The Bank’s core inflation measure, which excludes energy and utility, declined to 8.6 percent in April, from 10.9 percent in March 2021.

However, inflation expectations gauged from a survey of businesses, consumers and financial sector inched up in April, reflecting in part, sentiments surrounding tax adjustments and recent challenges associated with maintenance works in the power sector Interest rates on government securities trended downwards across the maturity curve.

The 91-day and 182-day Treasury bill rates declined to 12.8 percent and 13.6 percent respectively in April 2021, compared with 14.1 percent and 14.3 percent respectively, in April 2020.

Similarly, the rate on the 364-day Government instrument declined marginally to 16.5 percent from 16.7 percent over the same comparative period. Broadly, the yield on all the medium- to long-term Government debt instruments declined over the review period, relative to the same period last year.

The weighted average interbank rate declined to 13.6 percent from 14.0 percent, largely reflecting improved liquidity conditions on the interbank market. This translated into a marginal decline in average lending rates of banks to 20.9 percent in April 2021, compared to 22.4 percent recorded in the same period of 2020.

 

Zara Yussif

For about three centuries now, the activities and progress of our world has been powered by fossil fuel. 

We have lived to accept that fossil fuel consumption cannot be exempted from our everyday activities, right from cooking our foods to  fueling our vehicles to powering our machines. 

The use of fossil fuel is inevitable in both obvious and subtle ways. 

However, in the past decades, a series of concerns have been raised about the disadvantages of fossil fuels on the environment. It is alluded that, the continuous usage of fossil fuel will lead to environmental catastrophe.  Due to this, the world is drastically drifting to the usage of safer and renewable energy. 

This is why in the latest dialogue held by the Natural Resource Governance Institute (NRGI) on energy transition for civil society and media it was noted that, even though Ghana has not contributed much to global climate change but this global climate change will affect Ghana in any case.

Now, one may ask what is renewable energy? Renewable energy is useful energy that is collected from renewable resources, which are naturally replenished on a human timescale, including carbon neutral sources like sunlight, wind, rain, tides, waves and geothermal heat. 

Renewable energy transition however, is the ongoing energy transition which is replacing fossil fuels. This transition can positively impact our environment.  The following are some of the benefits of transitioning to renewable energy. 

First and foremost, the energy transition is to limit the adverse effects of energy consumption on the environment which includes the reduction of the emission of greenhouse gases and the mitigation of climate change. The burning of fossil fuel leads to the emission of greenhouse gas which causes problems for humans, animals and the environment in general. 

Studies have proven that renewable energy resources produce low to zero carbon or greenhouse gases. Thus, environmental related issues such as premature death of humans, loss of livestock and wildlife, reduction in crop yield due to acidic rain, loss of fish population, air pollution and rise in sea level will be massively minimised should the country switch to hundred percent renewable energy. 

The United Nations Industrial Development Organisation (UNIDO) at its 2017 conference revealed that, indoor pollution because of the use of fossil fuel caused 2 million deaths in 2016, and 4 million as at October, 2017, this figure is four times the number that dies from malaria. This goes to say that fossil fuel consumption is dangerous to our health and lives. Renewable energy is more environmental friendly. 

 

With the numerous potential benefits of renewable energy,  governments around the world have imposed myriad restrictions on the consumption fossil fuel.  Most developed countries have enacted Acts to address the dangers of fossil fuel combustion. The question here is, is the government of Ghana taking strategic measures to minimise the consumption of fossil fuel? Is Ghana economically ready to switch to hundred percent renewable energy? Is Ghana going to join the world on this energy transition even though it will devalue the country’s second largest export which is oil?

 

This is why Mr Denis Gyeyir of the NRGI advised the government in their last dialogue they held on energy transition. He said that government finances will be affected, borrowing may continue to increase and fiscal challenges are imminent. For the government to vigorous pursue the renewable energy agenda, there should be a plan to deal with the economic risks of reduced or no oil revenues due to energy transition. He also mentioned that  Ghana National Petroleum Corporation GNPC must begin investing strategically to remain relevant even when oil and gas is no longer as valuable.

 

Ghanaian journalist and Editor with ‘The New Independent’ newspaper, Kofi Adzivor is set to drag the Ghana Revenue Authority to court.

The legal action is to seek answers from the Commissioner-General, Ammishaddai Owusu-Amoah and Deputy Commissioner in Charge of Customs Division of the Authority on a purported illegalities in tax collections by some officers. 

The young Journalist in an interview with the media in Accra exposed of how a policy, introduced in 2019 by the Custom’s Division of the Ghana Revenue Authority  is rather making some individual Custom officers along the Eastern Corridor rich instead of the policy raking in more revenue for national development.

The import duty tax was introduced by the Ghana Revenue Authority to curb smuggling, bribery and corruption along the Eastern Corridor of the country, specifically the Volta Region.

Meanwhile the veciforous young Journalist suggests it’s a move to enrich some few while putting huge tax liability on the larger populace. 

Kofi Adzivor maintains despite calls by tax experts and some concern Ghanaians for the rather obnoxious policy to be reversed, the GRA remains adamant over the matter.

“The policy must be reversed because it’s illegal and doesn’t serve any meaningful purpose” 

The policy allows all trucks, cargos and all manner of loading vehicles to pay peanuts over goods they convey into the country through that part of the country.

He revealed that, this has reduced traffic through the Tema and Takoradi ports suggesting that, ” if the policy is reversed and right duties are paid, government would get more money for development” He said. 

“These cargo vehicles no matter thier sizes and irrespective of their contents, are allowed to pay very small amount of money while duty receipts are issued to cover the goods” he again said and went ahead to add that, “this is unfair and action must be taken with immediate effect”

He therefore has said he shall drag the Ghana Revenue Authority to Court if they fail to reverse the policy after fourteen (14) days.

Kofi Adzivor: 0244448805

 

 Zara Yussif & Adnan Adams 

A Senior Economist at Natural Resource Governance Institute (NRGI), David Manley, has said Ghanaians have hardly contributed to climate change yet not immune against the impact of energy transition in any case. 

Acoording to the economist  while Ghana contributes 0.7tonnes CO2 per person, United States of America contributes 15tonnes CO2 per person. 

Renewable energy transition will definitely results in losses or decline in taxes and royalties from oil production, oil revenues from share of national oil companies profit and drastic decline in exploration and developments or cancellation of oil production related activities and projects. 

“The energy transition is a big risk for Ghana and Ghana National Petroleum Corporation (GNPC) could make it worse”, the economist alluded.

For about three centuries now, the activities and progress of our world has been powered by fossil fuel. 

“We have lived to accept that fossil fuel consumption cannot be exempted from our everyday activities, right from cooking our foods to  fueling our vehicles to powering our machines. The use of fossil fuel is inevitable in both obvious and subtle ways” he said. 

In the latest dialogue held by the NRGI on energy transition for civil society and media it was noted that, even though Ghana has not contributed much to global climate change but this global climate change will affect Ghana. 

In recent past decades, a series of concerns have been raised about the disadvantages of fossil fuels on the environment. As energy experts indicate that, the continuous usage of fossil fuel will lead to environmental catastrophe.  Due to this, the world is drastically drifting to the usage of safer and renewable energy.

 Renewable energy is useful energy that is collected from renewable resources, which are naturally replenished on a human timescale, including carbon neutral sources like sunlight, wind, rain, tides, waves and geothermal heat. Renewable energy transition however, is the ongoing energy transition which is replacing fossil fuels. 

This transition can positively impact our environment.  The following are some of the benefits of transitioning to renewable energy. 

First and foremost, the energy transition is to limit the adverse effects of energy consumption on the environment which includes the reduction of the emission of greenhouse gases and the mitigation of climate change. The burning of fossil fuel leads to the emission of greenhouse gas which causes problems for humans, animals and the environment in general. 

Studies have proven that renewable energy resources produce low to zero carbon or greenhouse gases. Thus, environmental related issues such as premature death of humans, loss of livestock and wildlife, reduction in crop yield due to acidic rain, loss of fish population, air pollution and rise in sea level will be massively minimised should the country switch to hundred percent renewable energy. 

The United Nations Industrial Development Organisation (UNIDO) at its 2017 conference revealed that, indoor pollution because of the use of fossil fuel caused 2 million deaths in 2016, and 4 million as at October, 2017, this figure is four times the number that dies from malaria. 

This goes to say that fossil fuel consumption is dangerous to our health and lives. Renewable energy is more environmental friendly. 

With the numerous potential benefits of renewable energy,  governments around the world have imposed myriad restrictions on the consumption fossil fuel.  Most developed countries have enacted Acts to address the dangers of fossil fuel combustion. The question here is, is the government of Ghana taking strategic measures to minimise the consumption of fossil fuel? Is Ghana economically ready to switch to hundred percent renewable energy? Is Ghana going to join the world on this energy transition even though it will devalue the country’s second largest export which is oil?

 

This is why Mr Denis Gyeyir of the NRGI advised the government in their last dialogue they held on energy transition. He said that government finances will be affected, borrowing may continue to increase and fiscal challenges are imminent. For the government to vigorous pursue the renewable energy agenda, there should be a plan to deal with the economic risks of reduced or no oil revenues due to energy transition. He also mentioned that  GNPC must begin investing strategically to remain relevant even when oil and gas is no longer as valuable.

 

The Young African Leaders Initiative (YALI) Alumni Association Ghana (YAAG) has sworn in new executives to take the mantle of leadership for the noble yet prestigious youth association. 

The colorful short event which took place at the Presidential Hall on GIMPA main campus witnessed the leadership of the YALI West Africa Regional Center, immediate past executives and some other dignitaries and the new executives. The handing over was after a peaceful and successful electoral process, which included nominations, vetting, and election. 

The elected leaders are to keep together, coordinate and support the impact agenda of this noble community. The new executives for the 2021/2022 year are as follows: Elizabeth Ofori – President, Jennifer Addochoe Moffatt – Vice President, Adnan Adams Mohammed – Sustainability Chair, Maxwell Hubert Kusi – Outreach and Welfare Chair, Sarah Twum – Programs, Network and Events Chair and Stanley Smith-Acquaah – Communication.

“The journey ahead is long and may be rough, hard and muddy but I know, without a shadow of doubt that if we stick together, in mutual respect, solidarity and oneness of mind and action, we will get there” the new President, Miss Elizabeth Ofori said in her acceptance speech. 

YALI Alumni, made up of selected emerging young leaders from across the country together with others selected from other countries who go through a 5-weeks United State of America and MasterCard sponsored training as emerging young leaders in Business, Public Administration and Civic leadership. 

As part of its mandate to have a wider coverage and an all-inclusive alumni body, members who were unable to attend the in-person event had the opportunity to witnessed the ceremony virtually via zoom. 

Dignitaries in attendance were Apostle Mary Obeng Ofori (Head Pastor, Danfa Branch – Christ Kingdom Salvation Pentecostal Church) was the Chairperson for the ceremony and Project Director at the YALI RLC Accra, Dr. Shola Safo-Duodu, Mr. James Anquandah and Madam Patricia Hayford. 

Miss Asana Shanni Mahama, the immediate past President in her advice to the new executives stressed on the need for teamwork and to help continue the legacy of building a strong and vibrant alumni body in Ghana. 

WHAT IS YALI?

The Young African Leaders Initiative (YALI) was launched by former President of the United States Barack Obama as a signature effort to invest in the next generation of African leaders. The need to invest in grooming strong, results-oriented leaders comes out of the statistics: nearly 1 in 3 Africans are between the ages of 10 and 24, and approximately 60% of Africa’s total population is below the age of 35.

Who will empower and lead these young Africans? Who will shape the future of business and entrepreneurship, civic leadership, and public management? In order to answer these questions, YALI promotes three models designed to identify and empower young leaders: the YALI Mandela Washington Fellowship, YALI Network, and the Regional Leadership Centers across Africa.

The four YALI Regional Leadership Centers (RLCs) provide in-person and online training throughout the year in business and entrepreneurship, civic leadership and public management. They also offer opportunities for professional development and networking.

YALI Regional Leadership Centers (RLCs) are located at higher education institutions in sub-Saharan Africa and offer leadership training programs to young leaders between the ages of 18 and 35. By providing in-person and online training, networking, and professional development opportunities, the RLCs serve as a place for regional collaboration driven by young leaders. The RLCs are a project of the United States Agency for International Development (USAID) in close partnership with The MasterCard Foundation and other private sector partners. Each center is managed as a public-private partnership.

There are four Regional Leadership Centers offering training throughout the year. In 2019, the RLCs established YALI Africa as a convening body to connect the Centers and serve as a central point for mobilizing resources and maintaining a unified mandate and vision. To learn more about the RLCs and how to apply for their programs, visit the websites below. 

https://yali.state.gov/rlc/

 

Accra- 25th May 2021: Vivo Energy Ghana’s Managing Director, Mr. Ben Hassan Ouattara has been adjudged the CEO of the Year for the Petroleum Sector at the 5th Ghana CEO Summit in Accra. 

Mr. Ouattara was awarded for his outstanding contribution in the downstream petroleum sector and trailblazing innovations in the industry.

Under his leadership, Vivo Energy Ghana (Shell Licensee) became one of the first oil marketing companies to introduce a comprehensive automation at its retail sites to improve business efficiency and enhance customer satisfaction- a standard that has been adopted in the oil marketing industry. 

Throughout the unpredictable and overwhelming tough (COVID-19) year, his leadership ensured a consistent product availability across the country, devotion to good corporate citizenship through prompt payment of taxes and levies, and adherence to the petroleum downstream industry’s ethics and standards. 

During the peak of the COVID-19 pandemic, Mr. Ouattara ensured a resilient business eco-system by effectively and efficiently collaborating with key stakeholders including retailers, transporters, engineering and other service providers. 

His strong focus on safety has ensured that the business continues to operate with ‘No Harm to People and the Environment’.

Mr. Ouattara serves on various boards including the Association of Oil Marketing Companies, Tema Tank Farm, Aviation Joint User Hydrant Installation, Road Safety Limited and Orange Corner of the Netherlands Embassy.

Mr. Ouattara is a results-oriented, self-motivated and resourceful Managing Director with a proven ability to develop and strengthen teams in order to maximise company profitability and efficiency. He is a transformational leader who empowers people to unlock their potential, inspiring them to multiply growth. He brings in first-class professionalism and an unrivalled commitment to excellence.  

His key strength lies in developing winning strategies that has seen many business turnarounds over the years in various roles that he held.

-END-

About Vivo Energy:

With a vision to become Africa’s most respected energy business Vivo Energy Ghana, the company that distributes and markets Shell-branded fuels and lubricants was established in 2013. The Shell brand has been in Ghana since1928.

Vivo Energy Ghana has a fuels storage capacity of 11,000m³ and 232 service stations, with many offering Shell Cards and convenience retail stores.

Vivo Energy Ghana employs 150 people.  The company is recognised as a leader in the oil industry, championing and setting standards for safety.

Vivo Energy operates and markets its products in countries across North, West, East and Southern Africa. The Group has a network of over 2,300 service stations in 23 countries operating under the Shell and Engen brands and exports lubricants to a number of other African countries. Its retail offering includes fuels, lubricants, card services, shops, restaurants and other non-fuel services. It provides fuels, lubricants, liquefied petroleum gas (LPG), and solar energy solutions to business customers across a range of sectors including marine, mining, construction, power, transport, wholesalers and manufacturing. The Company employs around 2,700 people, has access to over 1,000,000 cubic metres of fuel storage capacity and has a joint venture, Shell and Vivo Lubricants B.V., that sources, blends, packages and supplies Shell-branded lubricants.

Vivo Energy plc has a primary listing on the London Stock Exchange, and is a member of the FTSE 250 index, with a secondary inward listing on the Johannesburg Stock Exchange.

For more information about Vivo Energy, please visit www.vivoenergy.com

 

 

Adnan Adams Mohammed

An energy consultant is deeply worried about the continuous redundancy of the Tema Oil Refinery (TOR), as he fears may lead to human capital challenges or ‘brain drain’ soon.

The current situation at TOR has compelled many skilled workers from the refinery to leave the country in search of greener pastures.

This is an indication or signal of brain drain. This situation has a dire consequence on every nation if immediate and critical plans are not implemented to remedy the situation. Information gathered at the refinery say refinery works have currently come to a total halt due to lack of crude oil as workers suspect management has either terminated its contract with Woodfills Company Limited; a company that was contracted to supply 11 million barrels of crude to TOR, or it is on the verge of doing that. This has further worsen the unsure future of the nation’s only refinery.

“In fact, it is already happening, we have a huge brain drain in most of our institutions and TOR is an example. So many qualified and competent people have left TOR over the last decade”, Dr. Yussif Sulemana raised concerns.

“If TOR was on its feet, to be efficient they would have to employ, and probably they would want to employ but the atmosphere and the environment are not rife. How do you employ people when the infrastructure is not running or is not running profitably?” he added.

TOR which is Ghana’s first and only refinery has not been operational for a while now due to many challenges.

Several Civil Society Organizations like the Chamber of Petroleum Consumers and the Africa Centre for Energy Policy (ACEP), had been at the forefront of calls on the government to do all it can to get the refinery back on its feet.

The Energy Minister, Matthew Opoku Prempeh, during a tour of the refinery, expressed the government’s commitment to ensure the facility is up and running as soon as possible.

Commenting on what it would take to get TOR back on its feet, Dr Sulemana stressed that “It will not take rocket science to let TOR run, we only need commitment and leadership at the topmost level.”

Meanwhile, workers of the refinery have agitated that, they are unable to work due to unavailability of some resources and hugely indebtedness of the facility to some utility service providers in the country.

Key among them is the Ghana Water Company Limited GWCL; which has cut water supply to the refinery forclose to one month now due to its (TOR) inability to pay accumulated water bills amounting to GHC4 million asat March 2021.

Currently, the company relies on its 11,200cubic meters capacity water reservoir for its operations.

Water is a key component in petroleum refinery and its unavailability could pose a huge challenge to TOR’soperations. However, the water reservoir could run empty for the first time in the history of the companyin the next 72 hours as at last week Friday, May 21, 2021, if water is not restored. This they say could expose the refinery to greater danger because ofthe flammable nature of their operations.

“As we speak, because of the water cut to the facility, we are running on the reservoir of the company that has acapacity of 11.200 cubic meters for water. It will interest you to know that this reservoir has never gone dry but as we speak in the next three days, it will run dry if water is not restored. Water is an essential part of petroleum refinery and the fact that we do not have water means we are exposed to greater danger should there be any eventualities at the plant”, deep source within TOR hinted.

It has also emerged that apart from water, TOR owes the Electricity Company of Ghana (ECG) to the tune of some GHC2.3 million in arrears.

Apart from utilities, investigations uncovered that the company also owes workers Provident Fund to the tune of about GHC34 million; a situation that has made it difficult for workers who are due to access their funds. Some workers complained of untold hardships that this has brought to bear on them.

“I was supposed to receive my benefit in December last year but it was not available. June 2021 will be the turnof another batch of workers to access their funds. The question we are asking is ; how is management going to make these payments when it is accumulated. We are really going through a lot as workers of TOR under this management, ” he fumed.

Additionally, the company is also said to be struggling to pay Tiers one and two of its workers’ Social Security and National Insurance SNNIT levies which is in arrears to the tune of some GHC21 million.

There are also concerns about the mode of recent appointments at TOR amidst its current financial predicament.

In a recent notice to its staff, the Human Resources and Administrative Manager announced the appointment of one Mr. Charles Anafi; a former Principal Engineer of the refinery as its new Optimization Manager- a position that did not exist in the past.

According to a notice to workers on the appointment, the HR and Administrative General Manager, Jane Ohenewaa Gyekye, indicated that the role of the newly created ‘Optimization Manager’ is to “commercially optimize the overall refinery’s operations, study market trends and recommend useful technology/ process to improve the refinery’s viability and commercial position to achieve the company’s revenue target.”

Documents available indicate that similar appointments have been made regarding over 10 workers including one Frank Kwaku Duah who has been appointed as the acting inspections Manager at the plant as recent as March 12, 2021.

This action by management has angered workers of the refinery.

“As we speak now, we are not working because most of our equipment are down and there is no crude; yet instead of using the meagre resources available to retool the facility, we are making matters worse.”

Our sources say refinery works have currently come to a total halt due to lack of crude oil. They say they suspect management has either terminated its contract with Woodfills Company Limited; a company that was contracted to supply 11 million barrels of crude to TOR, or it is on the verge of doing that.

According to the workers, thi
s will further deepen the woes of TOR if the contract of Woodfills is abrogated.

On this basis, the TOR Workers Union have petitioned the president of the Republic, Nana Akufo Addo on a number of occasions over the alleged mismanagement of the state entity.

It is not clear yet what the president’s action will be. However, it can be confirmed that there is a growing anger within the workers of TOR over the MD’s continues stay in office.

 

 

 

Adnan Adams Mohammed

An energy policy think-tank, Institute for Energy Security (IES),has called on Eni Ghana Exploration and Production Limited (ENI) and Springfield E&P (Springfield) must, with immediate effect, see through signing their Unitization and Unit Operating Agreement (UUOA) to complete the unitization of the Afina and Sankofa fields as directed by the Government of Ghana.

IES says, available data in the first quarter of 2021 shows that unitization of the two entities working in Ghana’s petroleum fields may well be one of the many responses to the possible stranded hydrocarbon assets from the global energy transition and will, in the end, attract investment into the upstream petroleum sector from the coming green revolution.

In a recent release, the IES noted the shift in global investments towards green energy and solutions, hence the urgent need for ENI and Springfield to drill out Ghana’s crude while there is still demand.

“As a result, any delay on the part of ENI and Springfield to unitize their respective fields to maximize oil production may deprive the country the opportunity to maximize its earnings from oil and gas.”

“Additionally, any further delay to explore the Afina oil discovery tied to the Sankofa production could result in funding challenges for the oil companies in the future, as we see substantial amounts of global capital being directed at renewable energy projects, away from the traditional sources known as fossil fuels (including oil and gas),”

The IES further emphasises that the Government of Ghana, ENI and Springfield cannot ignore the transition in the energy market and must thus ensure the unitization which it argues will also “help build an indigenous Ghanaian company with operatorship capacity to hold the fort while multinationals begin to move out of the country’s hydrocarbon business for greener pastures”.

 

Read the full statement below:

IES MarketScan: A year on, why hasn’t ENI and Springfield unitized as directed

 

In April 2020, the then Energy Minister John Peter Amewu wrote to the subsidiary of the Italian oil major Eni Ghana Exploration and Production Limited (ENI), and Springfield Exploration and Production Limited (Springfield) a subsidiary of Springfield Group, directing them to execute a Unitization and Unit Operating Agreement (UUOA).

 

The purpose of executing the UUOA is to give full effect to the Government’s directive to unitize the Afina and Sankofa fields, and the subsequent imposition of terms and conditions for the unitization of the Afina discovery in the West Cape Three Points (WCTP2) and the Sankofa field in the offshore Cape Three Points (OCTP) contract areas.

 

The Institute for Energy Security (IES) MarketScan finds that the journey to the imposition of the terms and conditions for the unitization of the Afina and Sankofa fields begun in 2018 when Springfield wrote to the Minster for Energy indicating that, per their analysis of the data available to them, the Sankofa Cenomanian Reservoir extended into the WCTP2 contract area. Consequently, they requested the Minister to, in accordance with the law, direct the WCTP-2 contractor parties and OCTP contractor parties to commence unitization discussions.

 

After a series of engagements, Springfield was advised by the Hon. Minister to drill their prospect to further prove their claim, even though the seismic data showed that the Sankofa Cenomanian Reservoir extended into the WCTP2 contract area. Springfield based on the Minister’s advice, proceeded to drill the Afina-1x well which encountered hydrocarbons and thus corroborating their claim that the Sankofa Cenomanian extended into their contract area.

 

It was on the back of these engagements and analysis of the post-drill data by the Petroleum Commission (PC) and the Ghana National Petroleum Corporation (GNPC), that the Minister wrote to Eni and Springfield, stating that the Afina discovery in the WCTP-2 and the Sankofa field in the OCTP contract areas were one and the same.

 

Consequently, and in accordance with the law, the Hon. Minister directed Springfield and Eni to begin the process leading to unitization and to furnish him with a draft Unitization and Unit Operating Agreement (UUOA) within 120 days of his letter.

 

A year after the issuance of the first unitization directive, information available to the Institute indicates that Eni and Springfield are yet to sign the UUOA to give full effect to the Government’s directive. This, the Institute finds this as shocking and disappointing, given that the directive was issued in accordance with law and in the best interest of all the parties, including the State.

 

Section 34 (1) of the Petroleum (Exploration and Production) Act, 2016 (Act 919) specifically provides that “where an accumulation of petroleum extends beyond the boundaries of one contract area into one or more contract areas, the Minister in consultation with the Commission may, for the purpose of ensuring optimum recovery from the accumulation, direct the relevant contractors to enter into an agreement to develop and produce the accumulation of petroleum as a single unit”.

 

Similar principles apply in international practice. The Institute’s review of unitization laws in other countries show that majority of countries including Azerbaijan, United Kingdom, Egypt, Brazil, Nigeria, and Ecuador have enacted laws and regulations governing unitization processes which are very similar to the law in Ghana. The practice is usually for voluntary unitization, with the government having the power to enforce processes for unitization if voluntary unitization fails.

 

In international practice, the universal trigger for requiring unitization is geological, where a petroleum reservoir is found to extend underneath contiguous contract areas, given the different parties rights over the common reservoir.

 

Ghana’s laws makes provision for unitization because it prevents physical waste, prevents economic waste, and protects correlative rights (fair shares) of the parties to the contract areas. Unquestionably, unitization is a proper and generally accepted measure in the oil and gas industry to prevent waste. It is acknowledged as the best method of producing oil and gas efficiently and fairly.

 

It is an established fact that unitization leads to maximum economic benefits for all the parties involved including the State. These benefits are derived from, amongst others, sharing of development facilities, whic
h naturally drives down costs and ultimately improve economic returns. The benefits to the State are in the form of significant reduction in operational and capital costs as well increases in royalties, taxes, Additional Oil Entitlement (AOE), fees and levies.

 

Having established that the Minister’s directive was in accordance with the laws of Ghana and international best practices, it is puzzling why the Eni and Springfield are yet to sign the UUOA to fully complete the unitization of the fields so as enable the State derive the much needed revenues for the benefit of the entire citizenry.

 

The IES counts the delay in unitizing the OCTP and WCTP-2 as loss of opportunity for the country to reap maximum benefits from its petroleum resources due to the economic incentives associated with unitization of oil and gas fields. The institute therefore calls on government to update the country on the progress so far made on its unitization directive to Springfield and Eni, as part of its accountability on the country’s petroleum resource management to the citizens of the country.

 

 

 

Adnan Adams Mohammed

A top banker has cautioned businesses to take cognizance of the inherent risks associated with digital transformation; such as cyber-security, fraud, data and privacy breaches.

While describing Ghana’s digital transformation agenda as laudable, he called for the need to continually invest in security infrastructure and other capacity building opportunities to keep all stakeholders abreast of the risks.

This comes after the Vice President challenged Chief Executives of Government agencies and business leaders to embrace the tide of digitization and infuse their operations with innovative digital technology to drive business evolution and for survival. As he encouraged them to focus on building sustainable businesses and help build an economy that will remain resilient even in the face of unpredictable occurrences such as the Covid-19 pandemic.

“While pursuing digitalisation goals, we must take cognisance of the inherent risks associatedwith digital transformation; such as cyber-security, fraud, data and privacy breaches”, Managing Director of GCB Bank, Mr. Kofi Adomakoh cautioned businesses when addressing the 5th CEO Summit in Accra, last week, in the presence of Vice-President Dr. Mahamudu Bawumia.

The GCB MD noted that, while the government of Ghana has put in place policies and structures through institutions like the Data Protection Commission to safeguard personal data, corporate organisations also have a responsibility.

He pointed out that Ghana’s digitilisation drive could be anchored strategically around three interrelated stakeholder points. These include; digitally-enabled government, a digitally-enabled private sector, and a digitally-enabled citizenry.

“A credible and comprehensive identity system has implications for every aspect of our national life; from mitigating identity fraud, fighting crime and improving tax compliance,” he added.

Mr. Adomakoh explained that, apart from being the foundation for a more comprehensive digitalisation strategy, it will unlock new levels of credit access and provide the platform for building a reliable credit scoring system.

He expressed excitement at the addition of digitisation to the name of Ministry of Communications, saying it will give impetus to Ghana’s Africa Beyond Aid goal of becoming a leader in innovative digital technology by2023.

The Vice President, also speaking at the 5th Ghana CEOs Summit, said it is absolutely imperative to reset and reignite business and the economy in these times, to ensure continuous growth and development of the Ghanaian economy after the devastating effects of Covid 19.

“The Covid-19 pandemic has demonstrated ample systemic flaws in the way we do things, including the way we conduct business, thereby requiring us to re-think and re-orient ourselves and our businesses. We cannot succeed if we hold on to the old ways of doing things. If we want to survive, we will have to dwell on the lessons learnt from the pandemic going forward” he indicated.

“In our bid to reset business and the economy, digitization has an enormous role to play. One of the lessons the pandemic has taught us is that digitization is the future; a future that perhaps started yesterday. Businesses will by necessity have to integrate appropriate digital technologies in their operations and service delivery in order to increase productivity and output.”

Dr Bawumia emphasized: “The pandemic has presented a much-needed opportunity with which we can reset the economy, while still building upon the solid foundation already laid. It has also taught us that businesses are intimately connected with society, and such intimate connection will require businesses to be responsive to the needs of all stakeholders.”

“The government of President Nana Akufo-Addo,” Dr Bawumia pledged, “remains focused on building an economy that is underpinned by digitization. We have made progress on our enablers. We are beginning to see the dividends in Passport services, Driving License, the integration of the National ID with Health Insurance, with the implementation of initiatives like mobile money interoperability, the paperless port systems, digital property addressing system and many others.

 

 

 

Adnan Adams Mohammed

In the next weeks, banks operating in the country will start accepting the National Identification Authority’s cards (ECOWAS card) for any financial transactions.

According to the Ghana Association of Bankers, it is in talks with other stakeholders to consider the implementation of a parallel system that will see banks accept the new National Identification Authority’s cards for financial transactions.

The Association indicated that the talks also includes considering other ID cards which are not being accepted currently by various financial institutions.

“The National Identification card is coming on stream and in the background, we are working with the National Identification Authority and the third party provider of that system to ensure that we can have a parallel system where over the coming weeks, you will hear that you can go to a bank with your National ID card, and you can be positively identified”, Deputy Chief Executive Officer of the Ghana Association of Bankers, John Awuah disclosed in an interview last week.

“Once that comes on stream and the parallel phase runs out, by the law that set up the National Identification System, that becomes the primary form of identifying customers for banking transactions and then as banks, you will have no choice but to comply”.

Mr Awuah further reiterated that discussions are still ongoing to ensure that the new voter’s ID card becomes part of the ID cards accepted by banks for financial transactions even as government works towards implementing the use of the national ID cards.

“The point is that, the voter’s ID cards is one of the many cards accepted by banks for financial transactions. Unfortunately, since we came up with new cards, the third party that has a relationship with the Electoral Commission to have that database refreshed or updated so that the banks could positively identify customers who produce voters ID cards for banking transmissions, that kind of discussion has not been concluded”.

“It is sad that as banks we do not have a say in that discussion because we are not a party to that deliberation. The message I want customers to know is that, if you go to a bank and your voter’s ID card is not accepted, it is not because the bank doesn’t want to accept it but because the bank has no mechanism for authenticating the new voter’s ID cards. Can you imagine if somebody presents a card to conduct a transaction and then on the flip side you find that the card is a duplicate or something else, we don’t want to be in such a situation? We do these things to protect our customers, and we hope that they will bear with us during this time where we are going through the process of integrating the new voter’s ID card into our operations for identifying customers”.