John Abdulai Jinapor
The National Democratic Congress (NDC) is giving conflicting signals on the Deepwater Tano Oil Blocks purchase from Aker Energy and AGM being led by the state-owned Ghana National Petroleum Corporation (GNPC).
In one instance, their Members of Parliament (MPs) say the request by the Minister for Energy, for Parliament to grant “a blanket approval” for the Ghana National Petroleum Corporation (GNPC) to proceed with the acquisition of 37% and 70% shares in the Aker and AGM blocks respectively is improper.
The same opposition political grouping is saying however, that they are not against the deal, saying in a statement over the weekend that “the NDC Minority is not against the policy or decision for GNPC to acquire higher stakes in the said oil blocks per se.”
“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.
“This must be done with a high sense of transparency, while taking on board the views of stakeholders, particularly civil society organisations in the extractive industry.”
According to the Minority MPs, GNPC should be made to go back and renegotiate the deal into one agreement that addresses value for money concerns raised by them and some civil society organisations (CSOs) in the extractive industry before it is presented to Parliament for consideration and approval.
In a statement jointly signed by the Ranking Member for Mines and Energy Committee, John Abdulai Jinapor and the Ranking Member of the Finance Committee, Cassiel Ato Forson, the NDC MPs indicated that in the event that the negotiated deal is approved, “the Minority demands that the loan agreement to purchase the shares therein should also be presented to Parliament for consideration and approval.”
They said the Minority demanded that GNPC, as the buyer, must engage the services of an independent and reputable international financial institution to conduct a full appraisal and risk assessment of the Aker and AGM blocks before the purchase.
“The presentation from GNPC indicated that Aker and AGM have added 267 million barrels to the blocks since they took over. The Minority equally demanded for a full audit of this claim and the expenditure incurred by Aker and AGM following the acquisition of the oil blocks by a reputable and independent audit firm,” the statement continued.
It said the Minority both at the committee level and plenary raised “serious concerns” about the decision by Aker Energy to use a projected benchmark price of $65 per barrel for the valuation, as adopted by the independent technical consulting firms, namely, Pareto Securities, Arctic Securities and Lambert Energy Advisory.
The statement noted that “the minority finds GNPC’s proposed benchmark price of $65 per barrel unrealistic and insists that the same should be reviewed downwards to a more realistic price thereby reducing the hyper-inflated proposed purchase price significantly.”
The NDC MPs said their side demanded that “all the relevant technical and financial documents relevant to the Agreement, particularly the necessary appraisal, valuation and/or audit reports must be submitted to Parliament by the Minister prior to the presentation and consideration of the final negotiated Agreement.”
For them, the average international market price of crude oil over the next 30 years cannot be more than US$65 as suggested by the government, indicating that they would not accept that benchmark price, which to them, appears to have been adopted by the independent valuation agencies.
“For the avoidance of doubt, both the negotiated Acquisition Agreement and the Loan Agreement consequent upon the same, will have to be laid before Parliament by the Minister for Energy for consideration and approval.”
They indicated in the statement that on Monday, August 2, 2021, the Minister of Energy, Matthew Opoku Prempeh, laid before Parliament a request for approval of the acquisition of additional shares by GNPC Explorco of 37% interest in DeepWater Tano/Cape Three Points (DWT/CTP) operated by Aker Energy Ghana Limited and 70% stake in the South DeepWater Tano (SDWT) operated by AGM Petroleum Ghana Limited.
According to them, the Energy Minister again laid before the House the establishment of a joint operating company between Aker Energy and AGM, and GNPC Explorco, as well as the approval to mandate the Minister for Energy and the Minister for Finance to agree on a purchase price with Aker Energy/AGM.
They disclosed that these were besides the provision of a loan not exceeding US$1.65 billion to finance the acquisition, consisting of 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.
By Ernest Kofi Adu