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Business News of Saturday, 13 December 2014

Source: Daily Guide

$8bn Oil project ratified

Parliament on Thursday ratified an agreement for the development of the Sankofa and Gye Nyame oil and gas project offshore Cape Three Points.

It will cost $8 billion, with the controversial $700 million loan being contracted by the Ghana National Petroleum Corporation (GNPC) as a counterpart or equity funding.

Some minority members strongly opposed the ratification saying that the issue of the $700 million GNPC loan had to be critically scrutinised and analysed before the ratification so as to allow the project, which is to be undertaken by ENI Exploration & Production Company and VITOL Upstream Ghana Limited, to take off.

The New Patriotic Party (NPP) Member of Parliament (MP) for Old Tafo and a ranking member of the Finance Committee, Dr. Anthony Akoto Osei; NPP MP for Assin Central, Kennedy Ohene Agyapong; NPP MP for Manhyia South, Dr. Matthew Opoku Prempeh and NPP MP for Dormaa Central, Kwaku Agyeman-Manu, argued strongly that parliament ought to be cautious and do more due diligence before approval was given to the project which was going to cost so much and which would also involve the future of the country’s oil and gas industry.

The MPs were also exceedingly worried about the fact that the GNPC counterpart funding had not been sanctioned by parliament and the fact that there is no sovereign guarantee attached to the loan.

According to Dr. Anthony Akoto Osei, the agreement is too complex and that members would have to be given ample time to study it and make meaningful inputs, since it is the biggest project to be undertaken in the country’s oil industry.

The NPP MP for Assin Central, Kennedy Agyapong wondered why a loan of that magnitude should not be approved by parliament, adding that money for GNPC operations under the budget, which is far less than the loan, had to be brought to parliament for scrutiny and approval.

“We cannot trust the GNPC people with this loan because even the budget that they always present to parliament for approval which is meant for their operations for the year, some monies are set aside without spending,” he said.

He stressed that he was able to detect that $60 million of the money budgeted for expenditure last year had been set aside for no apparent reason and when he raised the alarm, the GNPC quickly withdrew their budget and brought a new one with lower expenditure without the $60 million that had been set aside.

According to him, from the above action, officials of the GNPC must not be trusted and that was the reason why the minority MPs were calling for more scrutiny of the $700 million.

“It may be that the money will be too big for that project or less than what is required for the project and parliament could make recommendations after the scrutiny and approval for the money to be either reduced or increased,” he observed.

The MP for Manhyia South said parliament had allowed GNPC to become untouchable.

“Mr. Speaker, it is time we exercised our power to let GNPC account to the people of this country,” he said, adding that operations of GNPC must be subjected to parliamentary scrutiny.

The deputy minority leader, Dominic Nitiwul and the majority leader, Alban Bagbin, strongly supported the argument that there should be some level of parliamentary oversight over operations of GNPC.

The speaker, Edward Doe Adjaho, also agreed with them and asked the leadership of both the majority and the minority to find a parliamentary avenue where officials of GNPC would be summoned before the House to account to the people of the country.

The speaker said that in view of the importance of the agreement and the current energy crisis that the country is facing, early ratification of the project would help solve the problem since the Sankofa and Gye Nyame fields abound in huge gas reserves.