Policy Brief - Simplified Contract


For a country to benefit from its petroleum wealth, its government must take decisions that will ensure that an appropriate share is received from petroleum production. The government’s challenge then is to ensure that exploration and production are carried out in an efficient manner through a robust petroleum contract. The provisions of a petroleum contract such as fiscal terms, local content, amongst others are therefore of absolute relevance as they define government’s take and citizens’ benefits.

It is quite interesting that most citizens of Ghana, as primary owners of the country’s petroleum resource, are not privy to the terms of petroleum contracts signed with oil companies. Petroleum contracts, even if accessible, are quite technical and complex to understand. Yet, if governments will succeed in managing such a resource for current and future generations, citizen participation is crucial. This simplified analysis is therefore intended to equip Ghanaians with relevant information on the petroleum contracts entered into on their behalf; to deepen public oversight and accountability. The analysis examines the terms and provisions in the petroleum contract signed in 2014 with A-Z Petroleum Products Ghana Limited and Eco Atlantic Oil and Gas Ghana Limited (Contractor Parties/Contractor); taking into consideration the contract area, fiscal provisions, local content and participation, and other important provisions. With a comparison of other contracts from previous years, the analysis will address the changes in the provisions, the implications and possible reasons for the changes.