After Protracted Shadow Boxing Over Mirage

…As Tullow Buys Its $300m Jubilee Stake Whiles Gov’t Wins International Praise

After months of unrelenting attempts by some elements in the ruling government to cause commercial and collateral damage to EO Group, the only Ghanaian partners in the Jubilee oil field with planned prosecution of the group by the Attorney-General's office, reason has finally prevailed, thereby fine-tuning government’s earlier posture on the issue.

The twirl of controversies that surrounded EO group’s share in Jubilee fields attracted major concerns from industry players, who argued vehemently that protracting the issue could gravely affect investment flows into the country’s oil sector.

The group was subjected to an incomprehensible campaign of character assassination, false allegations of misconduct, and abuse.

However the Ghanaian partners made a major stride yesterday following the approval and conclusion of an agreement with British firm, Tullow Oil for the acquisition of EO’s stake in the oilfield.

The deal, which required consent by the government, gives Africa-focused Tullow an extra 1.75 percent stake in the field, leaving it with a holding of 36.5 percent. Subsequent to an announcement made on 26 May 2011 in relation to the conditional acquisition of the Ghanaian interests of EO Group Limited for $305 million, Tullow Oil plc announced yesterday that all of the conditions to the acquisition were satisfied, thereby completing the deal.

The company in a latest release said “This acquisition, with an effective date of 1 December 2010, will increase Tullow's interest in the West Cape Three Points licence offshore Ghana by 3.5% to 26.4% and increase the Group's interest in the Jubilee field, which Tullow operates, by 1.75% to 36.5%.”

With the completion of the deal, the company said “10,137,196 ordinary shares of 10p each in the capital of Tullow (Shares), are expected to be admitted on 26 July 2011 to the official list of the UK Listing Authority and the official list of the Irish Stock Exchange and to trading on the main markets of the London Stock Exchange and the Irish Stock Exchange. The shares satisfy approximately $216 million of the consideration and the balance, which includes certain working capital adjustments, has been paid in cash”.

The company went on to say that “Following Admission, the total number of Shares in issue is 900,315,402, and the total number of voting rights in the Company is 900,315,402. The Company holds no Shares in treasury”.

In conclusion the statement explained that, “the above figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in or a change to their interest in, the Company under the FSA's Disclosure and Transparency Rules”. Meanwhile the transaction has been met with loads of commendations pouring in from international watchers who are of the view that government had shown good faith in the face of intense pressure from within and without its fold. Industry players are optimistic that the completion of the deal would cause critics to alter widely held perceptions that the NDC government was anti-business and spiteful of businessmen who were perceived to be aligned to opposition parties.

“Government has been handed an exclusive chance to not only win hearts within the business community by granting the approval of the deal, but to also score points in the area of political harmony and promotion of private sector participation”. A business mogul told this paper after the announcement He said the question of local content was an important strategic issue in the oil and gas industry, adding that governments everywhere and other stakeholders of many oil and gas producing states were seeking to secure greater local benefits from oil and gas production, “and my point simply is that this deal will encourage more indigenes to go into the sector if they know their investments would be secured and not unnecessarily exposed to politicization” A leaked charge sheet from the AG’s office revealed series of charges the AG was contemplating filing against EO group.

The leaked charge sheet indicated 25 charges have been leveled against the EO Group and its directors.

They included causing financial loss of several billions of dollars to the GNPC, money laundering and conspiracy to forge official documents among others. But EO group has since maintained that it acquired the oil block fairly and thus entitled to receive the same benefits any business venture could achieve through innovation, dedication and risk tolerance, when the effort results in a huge discovery of petroleum.