The Public Interest and Accountability Committee (PIAC) has issued a warning regarding the challenges faced by National Oil Companies (NOCs), including the Ghana National Petroleum Corporation (GNPC), due to the global shift towards sustainable energy.
This transition, according to the PIAC in a Joy News report, threatens to diminish the demand for fossil fuels, impacting NOCs’ market value and exposing them to various risks.
The PIAC, in a report titled, “The Role of GNPC in the Upstream Petroleum Industry: Challenges and Prospects”, highlighted the need for NOCs to adapt by innovating and revising their strategies to remain viable in the changing energy landscape.
“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 said.
The committee has also recommended a review of the nearly four-decade-old law that established GNPC, suggesting amendments to align with the industry’s current dynamics and international standards.
Originally, the GNPC was tasked with commercial responsibilities and some regulatory roles.
However, since the creation of the Petroleum Commission in 2011, GNPC has refocused solely on commercial activities, representing the state in petroleum agreements and joint ventures, with the Commission now overseeing regulatory functions.
The PIAC believes that updating the legal framework is essential for NOCs to operate effectively in this new era.
ID/BB
Source: www.ghanaweb.com