The Politics of Ghana’s Oil Barons

…And Aker Was A Ghost Company
-Was not registered in Ghana at the time of Petroleum Agreement
Whilst no office of the EO Group, one of the partners in the Jubilee Field, could be located at their registered Darko Farms address, another company, led by another of Former President John Agyekum Kufuor’s buddy, was neither registered nor incorporated in Ghana as required by law.

Ghana’s Petroleum (Exploration and Production) Law, 1984 PNDC Law 84, which regulates exploration activities in the country, requires that a contractor (foreign company), registered an incorporated company in the country, with powers to carry out solely petroleum operations in respect of the petroleum agreement signed.

According to Article 23 (15) of the Law, such company incorporated “shall be a signatory to any petroleum agreement;”

On October 24, 2008 Aker ASA and Chemu Power Company Limited signed a petroleum agreement with GNPC and the Government of Ghana. Aker ASA at the time, had neither been incorporated in Ghana under the Companies Code 1963, (Act) 179, nor registered an incorporated company in Ghana, as required under Section 23(15) of the Petroleum Law, PNDC L. 84.

The contract area under the Aker ASA agreement was South Deepwater Tano, an area relinquished by Vanco Oil, and which Anadarko, a US oil company, noted for its deepwater expertise, had also applied for, together with another US oil giant Hess.

LOCAL REPS But it has become clear also that whilst the partners of the company that was favoured, Aker ASA, had Chemu Power Company as its local partners. Chemu’s Executive Chairman is Nik Amarteifio, a close buddy of Former President Kufuor, whilst the company that was muscled out, notwithstanding its superior technical and financial muscle, Anadarko, had named Nana Akufo-Addo’s protégé, Ken Ofori Atta as their local representative.

Even though other companies applied for the block, the GNPC and government eventually selected the two companies, based on their attractive technical and financial proposals. Both companies agreed also to take on local partners.

However, Aker ASA-Chemu Power team was chosen and a Petroleum Agreement signed with them on October 24, which was ratified by Parliament on November 5, 2008. Meanwhile, Aker ASA, got Aker Ghana Limited incorporated on October 29, 2008 with certificate of incorporation number, CA-51,646. It received its Certificate to Commence business on October 30, 2008.

Companies, such as Kosmos Energy, Tullow Oil, Anadarko, Sabre Oil and Gas Holdings have all registered their companies under Ghana’s Companies Code, to facilitate their compliance with the law before entering into petroleum agreements for their blocks.

Even though under the doctrine of subrogation one company can be substituted for another to succeed the rights and obligations of that other, the rights and obligations must be under a valid agreement.

Since Aker ASA had not complied with the requirements of the law before entering into the petroleum agreement for the South Deep Tano block, that contract cannot pass as a valid one, under which it could assign any rights under that flawed agreement.

Aker ASA therefore cannot assign its rights under the purported petroleum agreement to Aker Ghana Limited, which did not exist at the time of signing the petroleum agreement with GNPC and the Government of Ghana.

The relevant clauses under Section 23(15) of the petroleum law states that a contractor (foreign company):

“which is not an incorporated company in Ghana under the Companies Code, 1963 (Act 179) shall (a) register an incorporated company in Ghana under the provisions of the Companies Code, 1963 (Act 179) to be authorized to carry out solely petroleum operations in respect of which a petroleum agreement or petroleum sub-contract has been entered into under this Law and such signatory shall be a signatory to any petroleum agreement;”

“(b) maintain an office or establishment in Ghana to carry out petroleum operations and shall have in charge of such office or establishment a representative with full authority to act and to enter into binding commitments on behalf of the contractor or sub-contractor, as the case may be; and, continues with subsection (c) that:

“In respect of such petroleum operations, open and maintain an account with a bank in Ghana.”

The Minister of Energy, Dr. Oteng Adjei, by a letter to the President of Aker ASA in December last year, declined a request by the company to regularize the purported agreement, by assigning it to Aker Ghana Limited, which was registered after the signing of the agreement, declaring it as legally impossible, since the purported initial agreement did not comply with the law.

The minister, by a copy of that letter advised GNPC to reimburse Aker ASA with costs incurred in acquiring data, since such data acquired belonged to GNPC. He notified Aker ASA that it was going to reactivate negotiations which had commenced previously with the Anadarko/Hess application.

Coming up: Why Anadarko was denied license by the Kufuor regime.