The Ghana National Petroleum Corporation (GNPC) risks losing revenue from gas if it is not directly involved in key commercial decisions in the power sector, the Africa Centre for Energy Policy (ACEP) has warned.
ACEP Executive Director, Mr Benjamin Boakye, said GNPC should consider establishing a subsidiary focused on gas commercialisation and the power sector to give the corporation a stronger role in power project negotiations.
Speaking at a forum on GNPC in Accra, Mr Boakye said the subsidiary should complement, rather than compete with, GNPC’s existing operations.
He said GNPC needed to be involved in negotiations over power tariffs because decisions in the power sector could affect its ability to recover money owed for gas supplied to power producers.
“If the tariff is too high on the power side, it has implications for your money,” he said.
Mr Boakye said GNPC should not be left to deal with the financial consequences of power sector decisions taken without its involvement.
He also called for better documentation of decisions affecting the corporation, particularly those involving government policy.
According to him, GNPC should maintain a clear record of how major decisions are reached, including the approvals and recommendations that support them.
He said this would help the corporation assess political and policy decisions, manage the associated risks and find ways to protect its commercial interests.
PIAC calls for legal reforms
The discussion also raised concerns about the legal framework governing GNPC and petroleum sector oversight.
Technical Officer at the Public Interest and Accountability Committee (PIAC), Mr Mark Agyeman, said the GNPC Act, the Energy Sector Management Programme Act and the Petroleum Revenue Management Act (PRMA) should be reviewed and aligned.
He said inconsistencies among the laws sometimes make it difficult for GNPC to fully operationalise its mandate and create challenges for PIAC in determining the information it should request.
Mr Agyeman said PIAC’s last three statutory reports had recommended a review and alignment of the legislation.
He also disclosed that GNPC had, for the first time, submitted its data to PIAC within the stipulated period this year.
However, he said the bigger challenge was turning disclosures into accountability.
Mr Agyeman said GNPC reports to 23 regulatory institutions, including PIAC, and that PIAC had not been denied any information it had requested from the corporation.
He said PIAC was working with GNPC through recommendation implementation sessions to ensure that issues identified in its reports were addressed.
The discussions underline the need for GNPC to strengthen its commercial role in the gas and power value chain while improving the systems used to document and account for decisions affecting the corporation.
