Accra, July 7, GNA - Reverend George N. Kotey, Director-General of Ghana International Institute for Bible and Evangelistic Ministry (GIIBRAEM) on Wednesday, called on Parliament to review the numerous lapses in the Petroleum Agreement with International Oil Companies (IOCs). He noted that the entire process is not transparent, and must be rejected to ensure that the nation derives maximum benefit from the oil and gas resources.

Rev Kotey made the call at a press conference in Accra on Tuesday to seek public support in a proposed peaceful demonstration scheduled for Thursday July 8. "All well meaning Ghanaians must support the Ministry to register disapproval of the agreement by presenting a Memorandum of Understanding to Parliament," he added.

The peaceful procession is expected to start from Kwame Nkrumah Circle and end at Parliament House. Rev Kotey argued that Ghana should not be allowed to be disadvantaged in future due to some negative decisions taken by the authorities, saying there are clear evidence that majority of Ghanaians are still lost in the dark as far as the oil deal is concerned.

He raised concerns about the option of the Royalty and Tax System as against the Production Sharing Contract System, due to the financial limitation of the country to embark on the latter, adding that this option gave the contractor rights to petroleum and gas at the surface. Rev Kotey explained that Ghana National Petroleum Authority (GNPC) in its desperation offered and later embodied in its Model Petroleum Agreement (MPA) 90 per cent as participation interest to the investor who dared to explore oil in Ghana's territorial waters and the remaining 10 per cent reserved for the State. He said GNPC also fixed royalty at 12.5 per cent, but was reduced into a scale of four 12.5 per cent through further negotiations with the IOCs depending on the depth of the oil well and value of the American Petroleum Institute gravity which says, "the deeper the well the less the royalty; the higher the API, the higher the royalty". Rev Kotey said it is humiliating to compare Ghana's case to that of Tanzania which operated a 45 to 72.5 per cent PSC and 20 per cent royalty tax and Angola which had a 50 to 90 per cent PSC. He argued that stabilisation clauses are normally introduced to protect interests of the investor against harsh and unfavourable state legislations, which might militate against their interest.

Rev Kotey said the clauses which appeared in the MPA are asymmetric, protecting the investor from adverse changes to the fiscal terms, but passing on benefits of economy-wide reductions in tax rates. He said since the MPA provided for a review by the parties under Article 26.2, parliament could initiate a review process and advised the concerned IOCs not to lose sight of the fact that GNPC is desperately acting under extreme circumstances, which dictated that they should provide every possible incentive just to make exploration possible. "The IOCs should not count the situation as an advantage, but rather display a spirit of magnanimity to the proposed review on a level field as advised by Mr Kofi Annan," he said. Rev Kotey said the only alternative to retaining the agreements could also be the imposition of a royalty tax of 20 per cent as obtained in Tanzania or 16 to 20 per cent as obtained in Angola to help insulate the IOCs from State interference during their respective periods of operation.