Introduction
The
recent
arbitration
between
ENI/VITOL
and
the
Government
of
Ghana
(GOG)
along
with
the
Ghana
National
Petroleum
Corporation
(GNPC)
has
highlighted
significant
issues
within
the
management
and
regulatory
practices
of
Ghana’s
petroleum
sector.
The
Attorney
General’s
press
release
following
the
tribunal’s
decision
framed
the
outcome
as
a
victory
for
Ghana.
However,
a
detailed
examination
of
the
tribunal’s
findings
reveals
notable
breaches
and
procedural
shortcomings
by
the
Ministry
of
Energy
(MoE).
This
write-up
seeks
to
expose
the
discrepancies
and
partial
truths
in
the
Attorney
General’s
press
release,
criticise
the
Ministry
of
Energy’s
conduct,
and
offer
recommendations
for
future
improvement.
Discrepancies
in
the
Attorney
General’s
Press
Release
1.
Assertion
of
Victory
The
press
release
positions
the
arbitration
outcome
as
a
“major
victory”
for
Ghana.
While
the
tribunal
did
deny
the
claimants’
requests
for
monetary
damages
and
other
forms
of
compensation,
it
also
found
significant
breaches
by
Ghana
concerning
the
Petroleum
Agreement,
specifically
regarding
the
unitisation
directives.
2.
Legal
Breaches
The
tribunal
found
that
the
unitisation
directives
issued
by
the
MoE
breached
the
Petroleum
Agreement
by
not
adhering
to
the
required
procedural
and
substantive
criteria.
This
crucial
detail
is
understated
in
the
press
release,
which
focuses
more
on
the
dismissal
of
the
claimants’
monetary
claims.
3.
Partial
Truths
The
press
release
claims
that
Ghana’s
right
to
unitise
oil
fields
was
affirmed.
While
this
is
accurate,
it
omits
that
the
tribunal’s
affirmation
was
contingent
upon
following
proper
legal
and
regulatory
procedures,
which
the
MoE
failed
to
do
in
this
instance.
4.
Financial
Implications
The
release
downplays
the
tribunal’s
criticism
of
the
MoE’s
methodologies
and
procedural
fairness.
The
tribunal
highlighted
flaws
and
biases
in
the
determination
of
initial
tract
participation
and
the
lack
of
transparency,
which
are
critical
issues
for
future
compliance
and
governance.
Criticisms
of
the
Ministry
of
Energy’s
Conduct
1.
Lack
of
Transparency
and
Procedural
Fairness
The
MoE
failed
to
ensure
procedural
fairness
and
transparency
in
its
decision-making
process
by
not
sharing
all
relevant
data
and
information
with
involved
parties.
This
lack
of
transparency
undermines
trust
and
adherence
to
international
best
practices.
2.
Unclear
Criteria
and
Evidence
The
MoE
issued
directives
without
basing
them
on
clear,
substantive
criteria
and
did
not
adequately
establish
the
existence
of
a
single
petroleum
accumulation
straddling
contract
areas
before
proceeding
with
unitisation
directives.
This
oversight
suggests
a
disregard
for
established
legal
and
procedural
standards.
3.
Improper
Appraisal
Processes
The
MoE
did
not
ensure
that
necessary
appraisals
were
conducted
and
validated
before
proceeding
with
unitisation,
neglecting
proper
procedural
requirements.
This
failure
compromises
the
integrity
of
the
unitisation
process
and
can
lead
to
erroneous
decisions.
4.
Insufficient
Stakeholder
Engagement
The
MoE
did
not
provide
adequate
opportunities
for
meaningful
engagement
and
response
from
all
stakeholders
involved,
leading
to
perceptions
of
bias
and
favoritism.
Inclusive
stakeholder
engagement
is
crucial
for
balanced
and
fair
decision-making.
5.
Non-Compliance
with
Legal
and
Contractual
Frameworks
The
MoE’s
actions
did
not
consistently
align
with
Ghanaian
law
and
the
specific
terms
of
existing
agreements,
potentially
contravening
stabilisation
clauses
and
other
contractual
provisions.
Ensuring
compliance
with
legal
frameworks
is
essential
for
maintaining
contractual
integrity
and
investor
confidence.
6.
Neglect
of
International
Best
Practices
The
MoE
did
not
sufficiently
consider
and
integrate
international
best
practices
into
its
decision-making
process,
failing
to
ensure
its
actions
aligned
with
global
standards
for
fairness,
efficiency,
and
transparency
in
petroleum
operations.
Recommendations
for
Future
Conduct
1.
Enhanced
Transparency
The
MoE
should
adopt
a
policy
of
full
transparency
in
its
decision-making
processes,
ensuring
that
all
relevant
data
and
information
are
shared
with
stakeholders
to
build
trust
and
credibility.
2.
Clear
Criteria
and
Procedures
Establish
and
adhere
to
clear,
substantive
criteria
for
unitisation
and
other
regulatory
actions.
This
includes
thorough
appraisal
processes
and
validation
of
critical
data
before
making
decisions.
3.
Stakeholder
Engagement
Develop
a
robust
framework
for
stakeholder
engagement,
ensuring
that
all
affected
parties
have
the
opportunity
to
provide
input
and
feedback.
This
will
help
mitigate
perceptions
of
bias
and
improve
the
quality
of
decisions.
4.
Compliance
with
Legal
Frameworks
Strictly
adhere
to
Ghanaian
law
and
the
terms
of
existing
agreements.
Regular
audits
and
reviews
should
be
conducted
to
ensure
compliance
and
address
any
discrepancies
promptly.
5.
Adoption
of
Best
Practices
Integrate
international
best
practices
into
the
regulatory
framework
to
ensure
that
Ghana’s
petroleum
operations
meet
global
standards
for
fairness,
efficiency,
and
transparency.
Continuous
learning
and
adaptation
from
global
trends
and
standards
will
benefit
the
sector.
6.
Independent
Oversight
Consider
establishing
an
independent
oversight
body
to
review
and
monitor
the
MoE’s
decisions
and
actions.
This
body
can
provide
an
additional
layer
of
accountability
and
ensure
that
procedures
are
followed
correctly.
Conclusion
While
the
arbitration
tribunal’s
decision
may
have
been
portrayed
as
a
victory,
the
underlying
issues
highlighted
by
the
tribunal
suggest
significant
areas
for
improvement
in
the
MoE’s
processes
and
governance.
By
adopting
these
recommendations,
Ghana
can
enhance
its
regulatory
framework,
ensure
fair
and
transparent
decision-making,
and
maintain
investor
confidence
in
its
petroleum
sector.
Edward
Abambire
Bawa
(MP
and
Member,
Mines
and
Energy
Committee)
Email:
abambirebawa@gmail.com
Tel:
+233540730845
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