The Ghana National Petroleum Corporation’s (GNPC) vision of becoming a stand-alone operator by 2019 cannot be achieved unless it can prove otherwise, the Executive Director of the African Centre for Energy Policy (ACEP), Dr. Mohammed Amin Adams, has said.
According to the ACEP boss, GNPC’s current investment plan towards achieving the stand-alone-operator status in seven years lacks the needed elements that would ensure the achievement of the set vision hence his difficulty to see its likely attainability within the given period.
“GNPC wants to be a stand-alone operator in seven years. What it means is that GNPC should be able to mobilize resources for investment, have the capacity to behave as an operator who will be able to compete with other operators. The question we should ask is that GNPC’s investment plan which runs for six years, what investment captured on the plan will take GNPC to become a stand-alone operator? With the kind of, capacity and leverage they need to be competitive, I do not see any kind of investment on their plan that would take them to that level. I don’t see it”, Dr. Amin opined.
At a discussion on GNPC’s investment strategy in Accra, Dr. Amin questioned the realistic nature of the state owned enterprise’s (SOE) investment plan to achieve its vision. He challenged GNPC to answer some key strategic questions to prove to Ghanaians its resolve to attain the set visions.
He explained that for GNPC to be a stand-alone operator, it needed the financial muscle to increase its participation in concessions and called on the SOE to prove it could achieve that considering the company’s current minority share in the Jubilee fields.
“If you (GNPC) have 3.7% and other companies have 25% like Kosmos, 30% like Tullow oil, Anadarko another 25-27%, can GNPC be an operator when it has minority interest?” he queried. “How can GNPC increase its participation? It’s money. They must have the money. If they don’t have the money to buy increased stake, there is no way they can”, Dr Amin added.
Explaining further, Dr. Amin questioned the capacity of GNPC to explore Ghana’s basins on its own since such a move would make it competitive and place it in a better position to negotiate higher interests, in blocs, with other international oil companies.
“I think that GNPC will have difficulties and that is why I support the kind of partnerships that they are building. That is how Brazil got to the state that they are”, he stated.
Though Dr. Amin hailed GNPC’s move to build strategic partnerships for its capacity building, he was quick to point out GNPC’s defect in developing strategies to protect its capital appreciation moves saying their decisions were “too exposed to risks”.
This defect, he said, also challenged the company’s vision of becoming a stand-alone operator by 2019.
He stressed that until GNPC could answer these strategic questions and prove to Ghanaians it could achieve its visions, it would be impossible to help place the company at its perceived level of being a stand-alone operator and world class operator by 2027.
Dr. Amin made these comments at a stakeholder discussion organised by the Natural Resource Governance Institute and Financial Accountability and Transparency Africa (FAT-Africa), both non-governmental organisations.
The discussion, attended by stakeholders in the petroleum industry and some governance experts, was aimed at supporting public dialogue on the role, ambitions and governance of the GNPC.
Background
The GNPC is the most active state-owned enterprise (SOE) in the country, participating in upstream petroleum activities on behalf of government with a vision of being a stand-alone operator in 7 years (by 2019) and a world-class operator within 15 years (by 2027).
The GNPC’s mandate has expanded in recent years, with the creation of GNPC ExploreCo and government’s decision to put the Ghana National Gas Company under its control.
Currently, the GNPC holds strategic investments in Airtel Ghana, Prestea Sankofa Gold, a mining firm, and also has investments in the hospitality industry in the country.
