Mr. Speaker, I also rise to support the motion on the floor of the House and in so doing, I will make a few comments and observations.
Mr. Speaker, we are in times where we
ought to take our oil and gas exploration business very seriously. It is for this reason that I think this new Agreement is in order. Except that if you look at it carefully, you would note that it is the original contractor which is Devon Energy which is actually selling out its interest to Afren, and this is not a bad business deal. Except that the Devon Energy contract is about to expire at the end of this year, so they have a few months left for the whole Agreement to expire. I see that there is an urgent move by Afren to acquire the effects of Devon Energy and one would ask why would GNPC of Ghana not wait for the whole contract to expire so that we can now readvertise the block, so that we can have competition and value-for- money? Because of the revised Agreement - the amended Agreement -- Devon Energy was given more flexible terms from the original.
For example, royalty for oil was reduced from ten to four per cent. Royalty for gas from five to four per cent and indeed, all the other benefits that would have come to the people of Ghana were all reduced by certain amount.
The good thing about this Agreement is that, it offered us opportunity to take another look at these percentages and move back to the originals. That means, we have improved on our position. But what I want to say is that, we agreed to reduce these percentages because at that time oil had not been found, the perceived risk of doing exploration business in Ghana was high. But right after the discovery of this large result, risk perception has completely changed. Therefore, from now on, when we enter into petroleum agreements, we now enter from a position of strength rather than a position of weakness that we used to be.
For this reason, I thought we could have taken an advantage of the situation and moved a little higher than the percentages we offered in the originals. For example, instead of moving from four per cent back to ten per cent, we could have bargained and moved up to 13, 14 or 15 per cent and then the others by similar portions.
But at least, I must concede that this is progress made in comparison with the previous position. The Deputy Minority Leader has stated about the possibilities of companies that come to just partner others. I think there is another pheno- menon that is happening in the industry and the Ministry must be careful about it.
There are certain companies that we call speculators. They come in to hold concessions and then later when they see that things are good, they sell them and
for good money. It is not a bad thing but what it comes to do to us is that, it can delay our exploration activities so that by the time that we would discover oil, they would hold on to it until they get the best buyer for it.
But we cannot wait for them to be doing this type of delay tactics, we need to discover more fields because the two fields that we have are simply not enough to move into the bracket of big time oil producers as our neighbours like Nigeria. So at least, in the shortest period, we need to discover at least, two or three more of such oils, and there is an indication that perhaps this particular concession area that we are looking at may be the area that would give us another find. It is for that reason that I think this particular contract is being done in this case.
With these comments, I would say that there is nothing much wrong with this Agreement and I urge the House to support it.