Secret Oil Deal: Ministry Rebuffs Charges

The Deputy Minister of Energy, K.T. Hammond has debunked allegations that government could be secretly producing and selling oil from the Saltpond Oilfields in the Central Region.

The Minority Spokesman on Energy, Moses Asaga on Thursday asked Parliament to investigate what he said could be a secret production and sale of oil from the Saltpond Oilfield.

But K.T. Hammond said about 80,000 barrels of oil has so far accumulated from the oilfield operated by an American company, Lushann Eternit Energy Limited with which the Government of Ghana and the Ghana National Petroleum Corporation have an agreement. The oil, he said, has not been sold yet.

Moses Asaga had said his investigations showed that Lushann Eternit had secretly been lifting oil from the field for over a year and asked the Parliamentary Select Committee on Energy to establish where monies accruing from the oil lifted from the field was being kept.

According the spokesman, although the agreement required the establishment of an account into which monies accruing from the production should be put, the Ministers of Energy and Finance were not aware of the existence of such an account while his checks showed a lot of production had gone on.

“The average daily production is between 500 and 700 barrels a day so if you compute it with maybe 300 or 365 days for even one year you should be able to come out with a figure but for now when I was using my 18 months at 60 dollars per barrel on the average, I got almost 10.9 million dollars as revenue that would be coming from the field.”

Moses Asaga also charged that there was no transparency in the operations of the oilfield.

“We don’t know how much the contractor is taking, we don’t know how much the production cost is, we don’t know how much royalty is going to government, we don’t know how much the current interest the GNPC has accumulated so far, and we don’t know how much the lifting, that is a tanker, how many barrels of oil its lifting is worth.”

But K.T. Hammond told Joy News, the field in question was one the National Democratic Congress regime and Tsatsu Tsikata, then Chief Executive Officer of the National Petroleum Corporation had decided to give to Lushaan Eternit for free.

“There was no royalty to the Government of Ghana, the papers are there and unlike Moses I have studied the papers and I know that at the time we came to government this field was to be drilled and the proceeds taken for free from the country. We came in there, we realised that there was something fundamentally rotten with the system and I think yesterday Hon. Asaga conceded in Parliament that they were wrong and I think that we put matters right.”

He said it was not true that the company was producing 500 to 700 barrels of oil and explained that when the agreement was signed in July 2004 , production levels were very low: “300, 400 or so”.

“It’s only in May of this year when the company said that they had finished some problem that we asked them to undertake – a work programme on the well. At a point in time the wells were capped so nothing at all was coming out of it and they reactivated it, did the work programme and we were told that there were now drilling about 700.

“Not really seven, just about 600 something, close to 700 and that has actually not been sold. It is still sitting in a barge or a ship on the sea. You see, it trickles, 700 or whatever, you’ve got to get a container, produce whatever there is that you can, put it in there, store it for the maximum time that it takes for the tanker to be full before you look for a purchaser. That’s what has been going on. It’s just this last May that they finished with the work programme and that is when they started producing but that has not been sold.”

The Deputy Minister also disagreed with Asaga on his claims that the Energy and Finance ministers did not know much about the operations of the oilfield and the operational account, and said there was nothing secret about it. He said Asaga could have found out about the status of the account without necessarily raising any false alarms about it.