The Public Interest and Accountability Committee (PIAC) has stated that the global shift towards sustainable energy sources is putting National Oil Companies (NOCs) under significant pressure.
According to PIAC, factors such as climate change awareness, energy security needs, and advancements in renewable technologies, are challenging the traditional oil and gas industry.
PIAC in its latest Issue Paper titled ‘The Role of The Ghana National Petroleum Corporation (GNPC) in the Upstream Petroleum Industry: Challenges and Prospects,’ stated that the transition can reduce the demand and value of their core products, expose them to environmental, social, and governance (ESG) risks and liabilities, and undermine their competitive advantage and market share.
“NOCs are facing unprecedented pressures from the energy transition, which is the long-term shift away from fossil fuels towards cleaner and more sustainable sources of energy.
“The energy transition is driven by various factors, such as the growing awareness of climate change and its impacts, the increasing demand for energy access and security, the declining costs and improving performance of renewable technologies, and the changing consumer preferences and social expectations. The energy transition poses an existential threat to NOCs, as it could reduce the demand and value of their core products, expose them to environmental, social, and governance (ESG) risks and liabilities, and undermine their competitive advantage and market share,” the report stated.
The report, thus, called for a review of the laws governing the operations of the Ghana National Petroleum Corporation (GNPC), which must be amended to reflect the current and international practices in the industry.
“To survive and thrive in the transition, NOCs need to rethink their strategies and business models and explore new opportunities and markets. It is worthy of note that the Law that established GNPC is almost 40 years old.
“The law was established at a time when there was no petroleum activity and GNPC was used as a special purpose vehicle (SPV) to begin prospecting for economic activities in the industry. The industry has since that time (40 years ago) evolved into a thriving one with three production fields (Jubilee, TEN, Sankofa), as well as new fields coming on stream (Jubilee South-East) and several other offshore explorations at various stages of development and onshore exploration (Voltaian Basin).
“After almost 40 years since its enactment, this law must be reviewed and amended to reflect the current role and international best practices of the industry. The review is also critical to direct and allow the NOC to be able to operate efficiently and effectively within the sector.
“GNPC’s role has evolved to become a key commercial player. It is expedient that the Law that established the Corporation be reviewed,” the report added.
Source: Citinewsroom