sharing in governance of extractive industries
From NRGI website, link here
In October, Guinea’s National Petroleum Office published two production-sharing contracts, the country’s only hydrocarbons pacts to date, on its website.
One was signed in 2006 with SCS Corporation, a subsidiary of Hyperdynamics, and another with Summa Energy in 2008. Although these two contracts expired in September 2017 and January 2015, respectively, it is encouraging to see the young institution incorporate the contract disclosure requirement of the recent Petroleum Code as it develops its website. Article 21 of the 2014 Petroleum Code makes the publication of contracts obligatory.
The National Petroleum Office, or ONAP, is playing an increasingly active role in promoting oil exploration in Guinea. It might sign more contracts in the years to come.
ONAP’s are the latest in a wave of contract disclosures taking place in resource-rich countries around the world. There are now more than 40 governments that have officially published extractive industry contracts, with 17 jurisdictions now publishing all or nearly all contracts. The 2017 Resource Governance Index and Past the Tipping Point—an NRGI report on contract disclosure practices within the Extractive Industries Transparency Initiative—indicate that there are now at least 25 countries with laws requiring contract disclosure, compared with less than 10 in 2007.
In Guinea, the Ministry of Mines and Geology is currently updating its website to host all mining contracts. The ongoing update will also make PDF documents easier to search and allow for annotations to contract documents, making terms easier to locate.
ONAP was created by presidential decree in August 2015, following Guinea’s adoption of a new Petroleum Code in December 2014, and is placed under the authority of the president’s office. This reporting structure makes the institution’s openness even more welcome—as does the company’s wide mandate, which includes developing, implementing and monitoring the Guinean government’s petroleum policy in oil and gas exploration and production (known as upstream), and the import, storage and distribution of petroleum products (downstream). ONAP is also mandated to play a regulatory role; commercial responsibilities will be added once viable oil discovery is made.
Although different companies working with the Guinean government began to collect on- and offshore geological information as early as the 1960s, oil exploration has remained limited to date. The few exploration activities undertaken in recent years have not led to any discoveries of commercially viable oil and gas reserves.
The discovery of important hydrocarbon reserves off the coast of Senegal and Mauritania by Kosmos Energy in 2015 may have raised hopes in Guinea. But a more careful geographical and geophysical understanding of Guinea’s offshore prospects is needed. The Natural Resource Charter’s Precept 3 underlines the importance of countries building a sound understanding of their resource base during the pre-licensing phase. More geological information and knowledge can increase the interest of capable investors and attract higher bids for the country.
Today, ONAP is working to attract more investors to the sector, undertaking efforts to gather more offshore geological information that could in turn increase exploration activities. In October 2017, for instance, it signed an agreement for seismic evaluation with Total, which could potentially lead to the exploration of three blocks in a year’s time. ONAP is also working on the bidding terms to award exploration licenses for 22 blocks that remain unexplored.
As ONAP’s scope of activities expands, the company’s openness to transparency is an opportune window for oversight actors in Guinea to engage with ONAP and ensure public accountability early on. A number of civil society organizations and journalists in Guinea work on promoting transparency practices in the mining sector, monitoring contracts and the use of extractive revenues. They are also beginning to join the global open data movement, deepening their knowledge about the importance of publishing information in an easily searchable and usable format. It will be vital for Guinea to transpose such experiences to the hydrocarbons sector as ONAP applies international standards and best practices on contract management and bidding.
Sun-Min Kim is a Guinea/Africa program officer with the Natural Resource Governance Institute (NRGI).
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