GOVERNMENT HAS asked the opposition National Democratic Congress (NDC) not to inappropriately claim credit for efforts invested by the ruling government into Ghana’s energy sector which are beginning to yield good results.
The warning comes in the wake of a press conference organised by the NDC on Wednesday in Accra during which the opposition made a number of claims on developments in the country’s energy sector.
According to the NDC, among other things, it adopted policies and programmes to ensure Ghana consistently increased its share in most of the petroleum agreements that were negotiated.
It also claimed that Ghana’s share in the three oil-producing fields kept increasing from 13.6% to 20% during its tenure.
However, Energy Minister John Peter Amewu, addressing the media on Friday in Accra, said the NDC could not claim credit for the growth in the energy sector.
Describing the NDC’s claim as unsubstantiated, Mr. Amewu noted “these petroleum agreements were all negotiated and signed by the NPP government under President Kufuor, and that these are currently producing crude oil in Ghana.”
NPP’s feather in cap
He said, “The government of President Akufo-Addo has demonstrated significant commitment and resolve to manage the energy resources of our country efficiently for the benefit of our people. As a government, we take criticisms, but such criticisms should be constructive and not based on propaganda deliberately packaged to deceive the people of Ghana for political advantage.
“There is no doubt that the NDC showed extreme recklessness in negotiations of oil contracts and power contracts, which today are suffocating our country, over-burdening our national budget and adversely affecting the pace of national development.”
Assurance
The minister gave an assurance to Ghanaians that his outfit would not relent in ensuring that the vision of President Akufo-Addo in applying the country’s energy resources to build and expand Ghana’s industrial base to secure sustained economic transformation and create wealth and jobs for its people was achieved.
Further explanation
Reacting to other claims by the NDC that all the 13 petroleum agreements came to force during its term of office and that these had enhanced fiscal terms and increased national stake, Mr. Amewu stated that the NDC failed to understand conditions of the market at the time it signed the agreements, adding that “the increased fiscal terms achieved in the petroleum agreements have taken us nowhere for most of them.”
He said the 13 agreements signed by the NDC were signed between 2013 and 2016, adding that “out of these, the only companies that have met their minimum obligations are ENI and Springfield.”
Failed expectation
Additionally, he said “AGM had to change ownership under the NPP government before it could meet its obligations. The remaining 10 companies were to drill 11 wells. They have not drilled a single well. They were to spend $700 million, but they spent only $30 million. These are the contracts with the so-called enhanced fiscal terms.”
“We have always said that zero per cent of 100 is zero. So if you have the highest fiscal terms in contracts that do not lead to production, it amounts to nothing,” he added.
On the NDC’s ITLOS provisional judgment claim, he said it was important to note that only three of the agreements the NDC signed were affected by ITLOS – AGM, AMNI International and ERIN Agreements. Even one of the companies affected by ITLOS – AGM – had recently announced crude oil discovery.”
Toothless PIAC
He continued that the NDC created a weak Public Interest & Accountability Committee (PIAC) without teeth to bite, except to merely produce semi-annual and annual reports, whose adverse findings could not be enforced.
“PIAC cannot prosecute or summon officials. The NPP government is currently holding consultations with stakeholders on a draft natural resources governance bill, which is going to empower PIAC to enforce its findings,” he said.
“The NPP government passed the General Petroleum Regulations which provided significant transparency reforms including a requirement to disclose beneficial ownership information in petroleum agreements, and disclose marketing contracts signed by GNPC, as well as corporate social responsibility projects.
“The Petroleum (Exploration and Production) Act provided for the establishment of a Register of Petroleum Agreements and the application of Open and Competitive bidding of oil blocks. However, it took the commitment of the NPP government to establish the register and to conduct Ghana’s first open bidding round for oil block,” he added.
BOST, TOR
Responding to another claim that the NDC repositioned BOST and TOR to become strong companies only for the NPP government to weaken them, after it secured 2 million barrels of Ghana’s crude oil from the TEN fields for TOR to process, he noted that NDC rather almost collapsed TOR and BOST.
“The claim that BOST and TOR were strengthened cannot be true. Contrary to the NDC’s claim that BOST was making profits during their time, the facts do not support this,” he stressed.
BOST debt legacy
“BOST in January 2017 when the NDC handed over power owed $624 million to suppliers, BDCs and related parties in respect of crude oil imports for processing at TOR and refined products which got lost from BOST tanks. But as of February 2020, the outstanding amount to settle to clear the books now stands at $57 million.”
“An audit on BOST accounts shows that between the periods 2013 and 2016, there was a significant rise in the net losses by the company with the highest net loss of GH¢569 million recorded in the year 2016,” he said.
Cut in losses
He said the 2018 management account showed a 70% reduction in losses from the previous year – 2017. Similarly, the 2019 management account indicated a further 41% reduction in the loss level from the year 2018.”
Expected profit
According to him, “This steady decline in the loss level of the company from 2017 to 2019 shows that during the year 2020, the company will likely make a profit. BOST under the NPP government is in a better position.
“We want to assure the people of Ghana that unlike the NDC’s time when we had long queues at petroleum stations for three days in June 2014 due to fuel shortage, the Akufo-Addo government will never expose Ghanaians to such a crisis,” he emphasised.
Better economic managers
“The NPP government has proven to be better managers of the oil and gas sector. This is because we have renegotiated the domestic gas price from $8.8 per mmBtu to $6.08 per mmBtu. The gas price would have been lower if Sankofa gas price had been less expensive,” he added.