Ghana National Petroleum Corporation (GNPC) has strongly refuted allegations that it has breached the Petroleum Revenue Management Act by setting up an offshore company in the Cayman Islands to hold the 7% commercial interest instead of owning it directly or through a subsidiary in Ghana.
Responding to allegations made by the Africa Centre for Energy Policy (ACEP), the GNPC said it “continues to operate within the remit of the legal framework and has no intention of flouting any legal requirements and procedures.”
A statement issued by the GNPC Corporate Affairs Department said “all documents on the transactions are available for scrutiny and inspection,” saying “as the Corporation has always indicated, the Corporation welcomes engagement with any stakeholder in its operations.”
ACEP had said among others that the GNPC had not communicated how it intended to finance the US$199 million acquisition of 7% commercial interest purchase of offshore company in the Cayman Islands, and speculated that it was an illegality and a breach of the Petroleum Revenue Management Act, as amended.
Specific Response
But the GNPC said the funds used to acquire the 7% Joint Operating Agreement (commercial) interest of Anadarko WCTP Company in Jubilee, DWT and WCTP was advanced by the Ministry of Finance.
“As communicated to the Ministry of Finance, the advance would be fully repaid with interest by GNPC Explorco or Jubliee Oil Holdings Limited (JOHL) from proceeds of crude sales or funding raised on the debt market.”
According to the statement, the Corporation has not set up any offshore company, pointing out that the Anadarko Offshore Holding Company LLC (Anadarko Offshore) sought to wind up its operations in Ghana.
“Its subsidiary, Anadarko WCTP Company (Anadarko WCTP) (an offshore company registered in Cayman Islands that holds Anadarko’s interest in Jubilee, Deepwater Tano (DWT) and West Cape Three Points (WCTP)) was to be sold to Kosmos Energy Holdings Ghana Limited (Kosmos).
“The Corporation expressed an interest in acquiring part of Anadarko WCTP’s interest in the DWT and WCTP petroleum agreements and notified the Ministry of Energy. The Parties entered negotiations to determine the Corporation’s share, and it concluded with an offer to the Corporation to purchase the 7% commercial interest,” it explained.
The statement continued that to enable the negotiations with Kosmos for the sale of Anadarko WCTP to proceed, Anadarko Offshore incorporated a company called Jubilee Oil Holdings Limited (JOHL) in the Cayman Islands to hold the 7% commercial interest in the interim, while the parties negotiated and finalised the commercial terms of the transaction.
“The parties proceeded to negotiate the commercial terms of the sale and purchase of the 7% commercial interest. The headline purchase price as of 1st April, 2021 was quoted as US$199million.
“This price was adjusted to US$165 million effective 30th September, 2021, following adjustments for cash calls, taxes and other expenses incurred as well as sales made by Anadarko WCTP within the period,” GNPC stated.
It noted that Anadarko Offshore, the seller, was eventually paid US$164,798,691.00 on October 19, 2021 in full settlement of the acquisition.
It said Anadarko Offshore thereafter assigned JOHL to GNPC, as JOHL holds the 7% commercial interest, adding that the Corporation is currently in the process of transferring JOHL to GNPC Explorco.
“It was never a ploy by the Corporation to live unto itself, not the law and the nation’s strategy for its existence as claimed by ACEP,” the statement stressed.
On the ownership of Jubilee Oil Holdings Limited, the statement indicated that the Corporation was in the process of registering JOHL as an external company in Ghana.
Blay, Sarpong Connection
GNPC explained that Anadarko Offshore incorporated JOHL with its own directors, and that at the time of the sale and purchase, the Corporation was required to nominate two directors to take over after the transfer was effected.
“The Board of Directors of the Corporation therefore nominated the Board Chairman, Honourable Freddie Blay, and the Chief Executive Officer, Dr. K.K. Sarpong, as initial board directors to replace the directors of JOHL appointed by Anadarko,” the statement continued.
It said the “Corporation holds one hundred percent of the shares in JOHL. The beneficial ownership of JOHL can be ascertained by conducting a general search with the Cayman Islands Registry.”
“Further, the Share Purchase Agreement entered into on 13th October, 2021, between Anadarko Offshore and Ghana National Petroleum Corporation shows that the shares of JOHL belong to the Corporation as the Buyer.”
“JOHL was duly incorporated under the law of the Cayman Islands by Anadarko Offshore in line with the legal framework under the governing petroleum agreements. The Corporation is in the process of registering JOHL as an external company in line with Ghanaian law,” the statement added.
By Ernest Kofi Adu