Petroleum Exploration and Production Act (2011)

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The petroleum sector is regulated by the Petroleum Exploration and Production Act of 2001 which was amended in July 2011.[1][2] Under this Act, Sierra Leone developed a model petroleum agreement.[3]

Content

The amendment improves transparency in the industry, especially requirements that:[4]

  • oil contracts be awarded only through competitive auctions
  • contracts be published
  • payments be disclosed in accordance with the terms and procedures of the Extractive Industries Transparency Initiative (EITI)

The Act also establishes a system of sector management composed of the Ministry of Mines and Mineral Resources, the Petroleum Directorate and the state-owned Sierra Leone National Petroleum Company.[5] which must be granted a 10 percent stake in any oil block.[6]

Critique

According to the Revenue Watch Institute (RWI) the amended Act provides the legal basis to make the implementation of the EITI compulsory as it requires the reporting, disclosure and dissemination of information related to revenues and payments by both mineral rights holders and the government.[7] The law does not oblige license holders to fulfill these requirements.[8]

Civil society groups and the political opposition in Sierra Leone criticised the manner in which the parliament ratified the amendment.[9] The main opposition party, the Sierra Leone People’s Party (SLPP) and civil society groups working on the extractive sector, criticised particularly that the ratification happened too quickly leaving little time for debate and that citizens were not given the opportunity to comment on the act.[10]

External links

Revised Petroleum Exploration Act (2011)

References

  1. Sierra Leone: Extractive Industries”. Revenue Watch Institute, retrieved 22 October 2013.
  2. Sierra Leone Amends Petroleum Act Granting Government Stake”. Bloomberg, 12 July 2013.
  3. Sierra Leone: Extractive Industries”. Revenue Watch Institute, retrieved 22 October 2013.
  4. Political Economy of Extractives: Governance in Sierra Leone”. Fanthorpe, R. and Gabelle C., 2 July 2013.
  5. Sierra Leone Petroleum Act (2011)”. Revenue Watch Institute, 1 July 2013.
  6. Sierra Leone Amends Petroleum Act Granting Government Stake”. Bloomberg, 12 July 2013.
  7. Sierra Leone: Extractive Industries”. Revenue Watch Institute, retrieved 22 October 2013.
  8. Sierra Leone: Extractive Industries”. Revenue Watch Institute, retrieved 22 October 2013.
  9. Sierra Leone: Controversy over passing of Petroleum Bill”. West Africa Democracy Radio, 14 July 2013.
  10. Sierra Leone: Controversy over passing of Petroleum Bill”. West Africa Democracy Radio, 14 July 2013.