Rédaction Africa Links 24 with Ghanaian Times
Published on 2024-04-10 10:10:09
The Public Interest and Accountability Committee (PIAC) is advocating for a significant overhaul of the legislation that established the Ghana National Petroleum Corporation (GNPC) 41 years ago. The committee believes that the Provisional National Defence Council Law (PNDCL) 64, which created GNPC in 1983, is no longer suited to the current state of Ghana’s thriving upstream sector.
In a recently published issue paper on its website, PIAC stated that the existing legislation needs to be updated to address GNPC’s challenges, enhance its efficiency within the sector, and align with modern international industry standards. The law was initially put in place at a time when there was minimal petroleum activity, and GNPC was used as a special purpose vehicle (SPV) to kickstart economic activities in the industry. However, the industry has since evolved into a booming sector with multiple production fields, including Jubilee, TEN, and Sankofa, along with new and ongoing explorations both offshore and onshore.
PIAC highlighted that revising the law would enable GNPC to strengthen its core business by optimizing operations to improve efficiency, productivity, and reliability while reducing costs and emissions. It would also facilitate the corporation’s diversification into new energy sectors like renewables and low-carbon technologies, leveraging its existing capabilities, accessing new markets, and enhancing its environmental, social, and governance performance.
Moreover, the review would transform GNPC into an energy provider by offering integrated energy solutions such as electricity generation, distribution, and energy management to meet market demands and expand its role in the energy sector. Another crucial issue raised by PIAC is GNPC’s time-limited funding from the Petroleum Holding Fund (PHF), emphasizing the need for the corporation to strategize for financial sustainability as access to PHF funds will cease after 15 years from the start of commercial production.
PIAC also criticized delays in releasing PHF funds to GNPC, leading to difficulties in meeting financial obligations to joint venture partners, impacting the corporation’s financial performance. The committee expressed concerns about GNPC’s governance structure, particularly regarding the appointment of the board solely controlled by the Energy Minister, potentially exposing GNPC to political influence and compromising technical competence and strategic direction.
In light of these challenges, PIAC underscored the necessity of revising the legal framework and enhancing institutional capacity to enable GNPC to operate as a robust standalone operator. Failure to address these issues could hinder Ghana’s ability to maximize its hydrocarbon resources amid the global energy transition. Overall, the review of the legislation governing GNPC is critical for the corporation’s sustainability and growth in the evolving energy landscape.
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