The Minority in Parliament has vowed to fight for a review of the deal between the Ghana National Petroleum Corporation (GNPC) and the Norwegian oil giant Aker Energy over the proposed US$ 1.3 billion acquisition of shares in their oil bloc.
The demand is contained in a press release signed by the Ranking Member for Mines and Energy, Hon. John Jinapor.
According to the release, the Minority is not against the GNPC acquiring more stake in the oil blocks per se, “however, it must be made clear that we have serious concerns about the proposed hyper-inflated purchase price of the blocks and demand that all the necessary due diligence, independent audits, valuation and appraisals must be conducted by GNPC to ensure value for money for the country before the deal is approved by Parliament.”
The Minority, some of whom have been accused of having been influenced by Aker Energy agents, claim they are not against the deal but are simply demanding transparency.
The Minority is consequently demanding that GNPC’s claim that Aker and AGM have added 267 million barrels to the blocks since they acquired it from Hess, be audited.
The confusion over GNPC’s proposed share buy-back in the oil blocs controlled by Aker and AGM started when on August 2, 2021, Energy Minister, Dr. Mathew Opoku laid before Parliament, a request for approval of the acquisition of 37% interest in Deep Water Tano/Cape Three Points (DWT/CTP) operated by Aker Energy Ghana Limited.
The money is to be given to Explorco, a commercial wing of the GNPC, to make the acquisition for the government.
In addition, Explorco was to acquire a 70% stake in the South Deep Water Tano (SDWT) operated by AGM Petroleum Ghana Limited and establish a Joint Operating Company between Aker Energy AGM, and itself (GNPC Explorco).
Dr. Opoku Prempeh also sought approval for himself, the Minister for Energy and the Minister for Finance to agree on a purchase price with Aker Energy/AGM and the provision of a loan not exceeding US$1.65 billion to finance the acquisition.
The acquisition was to comprise a purchase amount not exceeding US$1.3 billion for the two blocks and a Capital Expenditure share of GNPC Explorco of US$350 million for Peacan 1, the Minister said.
The request was subsequently referred by the Speaker of Parliament to the Joint Committee on Mines and Energy and Finance for consideration pursuant to Order 188 and 169 of the Standing Orders of Parliament.
However, the huge amount that the Energy Minister proposed raised alarm bells with CSOs, who poked holes in the deal and actually impugned possible underhand dealings to satisfy certain personal interests at the expense of the state.
One of the major concerns of the CSOs is the fact that in 2018, Aker Energy had bought what they are now selling (50% of the Deepwater Tano Cape Three Points block) from another company, Hess Energy for US$100million.
And at the time of this purchase, GNPC’s Explorco which had been set up by the Mahama government in 2015 with the aim of making it an operator in the future, had a purchase option for a 10% stake in the DWT/CTP block.
However, in 2018 the Akufo-Addo government decided not to exercise that option, but rather triggered major amendments to the Petroleum (Exploration and Production) Act, 2016 (Act 919), which sought to limit the regulatory powers of the National Petroleum Commission in their favor and also reduced GNPC’s stake in the oil block from 48% to some 18%.
“Here again, the Akufo-Addo/Bawumia Government took a reckless decision to reduce Explorco’s participation interest from 24% to just 0%, on the frivolous ground of making the deal “more attractive” to investors and increased the Carried Interest to 15%. They also reduced GNPC option to increase its Participating Interest on declaration of commerciality from 15% to 5%,” the Minority charged.
“In short, the People of Ghana’s stake through both GNPC and Explorco in the SDWT Bloc was significantly reduced from a potential 49% to a maximum of 20% by the Akufo-Addo/Bawumia government,” the Minority stated, saying that renegotiation was a “rip-off” which was inimical to the interest of Ghana.
Fast forward to three years later in 2021 and the bloc that Aker bought from Hess in 2018 at a price of US$100million and developed with an additional estimated amount of US$90million, is now being valued by the Akufo-Addo government which wants to buy part back at an estimated price of US$1.3billion.
The credibility of the claims by Aker that the value of the oil resources on their oil block has appreciated with an addition of over 200 million barrels has been called into question.
Critics are demanding demanded that GNPC as the buyer, should engage the services of an independent and reputable international financial institution to conduct a full appraisal and risk assessment of the Aker and AGM blocs to validate the claims of its stated value.
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