Minority demands whereabout of US$47 million allotted to GNPC for some 10% oil block

Photo Credit: https://www.modernghana.com

The Minority in Parliament has demanded the whereabout of some US$47 million, approved by Parliament for the Ghana National Petroleum Corporation (GNPC), to acquire 10 percent shares in an oil block in Ghana’s Deepwater Tano Cape Three Point (DWT/CTP).


The Minority indicated that GNPC was, after September 2017, expected to effect payment for the 10 percent shares but failed, forcing Hess Energy, an American global independent energy company, to reclaim the 10 percent it had allocated to GNPC through its subsidiary company called Explorco.

In a press statement signed by the Minority Spokesperson on Energy, and Member of Parliament for Damongo, Mr. Mutawakilu Adam, it is pointed out that Ghana has lost a lot for not acquiring the additional 10 percent interest in the block, which Aker Energy now has 50 percent shares.

The Minority reiterated that the boundary dispute between Cote D’Ivoire and Ghana at the International Tribunal for the Law of the Sea (ITLOS) caused the execution of the assignment and assumption agreement to delay and also affected the petroleum operations of the DWT/CTP Block between 2014 and 2017.

This, the Minority said, has left GNPC with a paltry 10 per cent in the entire oil block leaving Hess Energy Ghana with 50 percent, LukOil with 38 percent and Fueltrade with 2 percent.

According to the Minority, when Hess Energy Ghana in 2018 opted to sell its 50 percent shares to Aker Energy, the then Minister of Energy, Boakye Agyarko proceeded to approve the transaction in spite of the several requests from the Minority to the government, to acquire the 10 percent paying interest to minimise the effects of the flaws in the fiscal package.

“This act of negligence and incompetence has made Ghana to lose 10 percent more shares in the block. The benefits that would have been accrued to Government by taking the 10 percent share would have been enormous,” the Minority averred.

The discoveries, agreements and matters arising

Ghana in 2006 signed a petroleum agreement with Hess Ghana for the exploration and production of DWT/CTP block for seven years, which was subsequently ratified by parliament the same year.

Per the agreement, GNPC had 10 percent and Hess Ghana, 90 percent.

At the expiration of the agreement on July 18, 2013, the exploration period had acquired a total of 300 Square kilometres of Seismic data and had drilled eight exploratory wells and made seven successive discoveries between 2011 and 2013. Five of the wells were for oil and two for gas.

In the 2015 and 2016 budgets, Parliament approved US$47 million to GNPC and same was released by the government in GNPC’s annual programme of activities for the two years, to pay for the additional 10 percent.

Following the high Exploration success rate at the license, Hess Energy Ghana organised a DataRoom to farm-down on its 90 percent interest in the Block.

In 2014, GNPC requested to acquire 10 percent commercial interest (additional Interest) for its fully-owned subsidiary company called Explorco on the same terms as the other parties, LukOil and Fueltrade; changing the shareholding structure to Hess – 40 percent , LukOil – 38 percent , GNPC – 10 percent , GNPC Explorco – 10 percent and Fueltrade – 2 percent .

To complete the deal on the 10 percent commercial interest, GNPC Explorco executed an agreement with Hess Ghana for which GNPC was expected to pay Hess Energy Ghana an amount of US$44 million in 2015.

GNPC received Parliamentary approval and support of US$47 million in the 2015 and 2016 budgets to pay up, and same released by Government to support GNPC’s Annual Program of Activities for 2015 and 2016.


Source: GhanaJustice/S.Ayisi


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