Of the 14 petroleum agreements, five have been affected by the ITLOS ruling, hence their inability to conduct the expected activities on the allocated block.

[contextly_sidebar id=”0QPDtQYHukYok9pwJ6dCUspKinGSk3zz”]The remaining nine have therefore flouted the rules and are also said to have evaded a penalty of 150 million dollars each.

In addition, the expected depletion of oil resources from the Jubilee oilfields by 2025, coupled with declining global oil prices, are expected to affect revenue from the sector.

The Executive Director of ACEP, Benjamin Boakye also argued that the overreliance on oil makes it necessary to ensure maximum benefit from the mineral resource.

According to him, the wanton extension granted the defaulting institutions is also unfortunate for the industry.

“The contract requires that if you do not spend your minimum program, you have to pay your minimum balance to GNPC. But these companies are not paying the differences between their minimum programs and their expenditure to GNPC and we are concerned that even as they are not paying, they are still getting extensions for the blocks,” he asserted.

Mr. Boakye added, “And how that happens, we have to continue to interrogate whether the politicians are behind them and just giving them the extension even though they are not performing, we have to continue to interrogate that to ensure that the country’s interest is rather served than that of the politicians.”

The companies were expected to have injected $923 million expenditure for the initial period contracts.

Meanwhile, all those agreements whose initial periods had expired were supposed to have spent $750 million.

Benjamin Boakye who was speaking at the launch of ACEP’s latest report, the Petroleum Contracts Monitor, 2017, further argued “that is why we are recommending that government should review all those contracts to see those that are not performing and cancel them so that those that can actually deliver on the contract are brought on stream to ensure that we can sustain the oil production that we have started.”

–

By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post ACEP demands cancellation of non-performing Petroleum deals appeared first on Citi 97.3 FM - Relevant Radio. Always.