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Business News of Friday, 14 February 2020


Government denies compromising Aker AGM agreement

Government has denied claims by the opposition National Democratic Congress (NDC) that the AKER/AGM Energy Petroleum agreement is the highest level of betrayal by the current administration.

In the said agreement Ghana National Petroleum’s interest dropped from 24 percent to zero.

Concerns had also been raised about transparency and accountability in that energy deal.

At a press briefing to respond to claims by the NDC, Deputy Energy Minister, Dr Mohammed Amin Adam said his outfit followed due process in signing the agreement.

He added “the agreement and all its contents were scrutinized and approved by Parliament which included the minority therefore, it is curious for the NDC to allege any wrongdoing.

“The allegation therefore betrays the NDC’s understanding of transparency. The NDC has as yet not mentioned any corrupt act involving any official of the government in the Aker contract. We challenge them to do so”.

On the incentives provided to Aker Energy, Dr. Amin Adam said “we should understand that project economics can be enhanced with incentives when market conditions adversely affect the prospects of profitability and the NDC knows this well”.

While urging the public to treat the NDC’s allegations with absolute contempt, he said government’s stake has been renegotiated from 10 percent to 15 percent.

“Not only this. We successfully negotiated local participation from 2.5 percent to 5 percent,” he added.

Dr. Adams noted that the incentives were not new and that the “renegotiation is allowed under the law and also under the petroleum agreement itself.”

Aker Energy eventually drilled three wells instead of the two outlined in the agreement and eventually struck oil after exploration in the deepwater Cape Three Points bloc.

“What this simply means is that the objectives of these incentives have been achieved and Ghana is better off,” the Deputy Minister said.

“Given its many commitments and the need to prevent it from being overexposed, GNPC decided to divest part of its bidding interest.”

The government also rubbished claims by the National Democratic Congress that Quad Energy, the consortium partnering AGM Ghana Ltd in its oil and gas exploration, was created under questionable circumstances.

The opposition party questioned why a company only incorporated in 2019 was purportedly granted a 5 percent stake in the deal.

“The qualification to be an indigenous company is that the company must be incorporated in Ghana… nobody says register the company 10 years before you can participate in whatever activity. There is no such provision”, Dr Amin Adam retorted.

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