Minority calls for urgent review of GNPC-GENSER agreement to ensure transparency

The minority in parliament have called for an immediate review of the Ghana National Petroleum Corporation (GNPC)-GENSER agreement.

The purpose of this review, according to them, is to establish a level playing field for all industry players and ensure transparency in gas pricing in Ghana.

In a statement dated August 23, 2023, and signed by the Deputy Minority Leader, Emmanuel Armah-Kofi Buah, indicated that the call for a thorough review is rooted in several key concerns raised by the minority side of parliament.

They based their argument on the lack of transparency, the shift from Ghana Gas Company and unexplained discounts.

“The Minority Group is concerned that the agreement combines the Gas Sales Agreement (GSA) and the Gas Transmission Agreement (GTA), which does not ensure transparency in the pricing of gas.

“The shifting of the agreement from Ghana Gas company and the signing of the agreement by GNPC when Ghana Gas is supposed to be the national gas transmission utility.

“The discount given to GENSER by GNPC for the gas transmission agreement and GNPC’s inability to explain satisfactorily how this discount will be recovered,” parts of the statement read.

The minority also commended the timely intervention of the speaker of parliament, Alban Bagbin, for directing the Finance Committee to collaborate with the Mines and Energy Committee to address the concerns of the agreement.

“We appreciate the timely intervention by the Rt. Hon. Speaker to rope in the finance committee to work jointly with the Mines and Energy Committee to deal with these outstanding issues to ensure that Ghana is not shortchanged.


“The Minority believes that the issues are now appropriately presented before Parliament and demand thorough appraisal,” the statement added.


In light of their concerns, the Minority Caucus has requested an urgent meeting convened by the chairpersons of the Finance and Energy Committees to address the Speaker's referral.

They have assured Ghanaians that they are committed to protecting the trust bestowed upon them.

“It is, therefore, unfortunate that the Chairman of the Mines and Energy Committee rushed with the report to the public domain while a new referral was pending. Transparency and accountability should be the guiding principles in this process, especially as any premature public statements can potentially compromise the integrity of the new referral which is in the pipeline.

“On behalf of the Minority colleagues on the joint committee of Finance and Mines and Energy, we pledge to unravel all the flaws in the agreement to guarantee value for money. We take this position with a firm conviction that the heart and soul of Ghana’s future lies in our energy security and all the critical issues related to it, including transparent gas pricing,” the statement included.

This comes after the Ghana Gas Senior Staff Association refused to accept the report from the Parliamentary Committee on Mines and Energy on a gas supply agreement between Ghana National Petroleum Authority (GNPC) and Genser Energy Ghana Limited.

Background:

The Parliamentary Select Committee on Mines and Energy endorsed the agreement between the Ghana National Petroleum Corporation (GNPC) and Genser Energy Ghana Limited.

In a report sighted by GhanaWeb, the committee outlined eleven reasons why it believes the deal will serve the interest of GNPC and Ghana.

The committee also said that it found no evidence of any losses from a deal between the Ghana National Petroleum Corporation (GNPC) and Genser Energy Ghana Limited (GEGL)

The investigation was initiated in response to claims made by the African Centre for Energy Policy (ACEP) and the IMANI Center for Policy and Education in July 2022 alleging incorrectly that the deal incurred a loss of $1.5 billion for the nation. The Committee’s report instead found benefits for Ghana far exceeding that sum.

The ACEP and IMANI reports raised concerns over a Gas Sales Agreement (GSA) between GNPC and Genser Energy Ghana Limited (GEGL), asserting that Ghana stood to lose the “whopping and galactic sum of $1.5 billion” due to this arrangement.

The allegations raised by ACEP and IMANI claimed GNPC sold gas to Genser at significantly reduced rates compared to its purchase price, resulting in a perceived subsidy.

Following an 11-month-long investigation, the Parliamentary Committee has refuted the claims made by ACEP and IMANI, stating that the GSA is not a "sweetheart contract."

The Committee found the computation methods used by ACEP and IMANI faulty. The CSOs calculated a hypothetical loss based on the contractual sum of $2.79/MMBtu. But that price reflects offsets from a capacity charge of $3.29/MMBtu.

The Committee found the arrangement much to the Nation’s benefit, presenting 11 key economic advantages associated with the deal ranging from energy security to job creation; from the development of future industries to foreign direct investment.

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NW/OGB

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