You are here: HomeBusiness2021 08 28Article 1343392

Business News of Saturday, 28 August 2021


GNPC has not been available for engagements on Aker deal – Ben Boakye

Benjamin Boakye, Executive Director of the Africa Centre for Energy Policy (ACEP) Benjamin Boakye, Executive Director of the Africa Centre for Energy Policy (ACEP)

The Executive Director of the Africa Centre for Energy Policy (ACEP), Mr Ben Boakye has said the Ghana National Petroleum Corporation (GNPC) has not been available for discussions on the deal with Aker energy.

He said on the Key Points on TV3 Saturday, August 28 that claims that Civil society organizations are being unfair to the GNPC with the flak against the deal because they failed to engage the corporation on the deal, is inaccurate.

Br Boakye told host Dzifa Bampoh that “The claim that GNPC has been available and Civil society doesn’t want to engage, we just want to criticize the corporation, is inaccurate. They have not been available.

“We issued a statement cataloguing the issues with the transaction and ordinarily you would want to see the corporation respond to us. Do you know what they did? They rather responded to the Norwegian embassy, to Parliament and to the IMF because we copied them. So where is the engagement from their end? There hasn’t been any engagement.”

The GNPC through its Exploration and Production Company Limited (GNPC Explorco) intends to buy 37% stake in Deep Water Tano/Cape Three Points (DWT/CTP) operated by Aker Energy Ghana Limited and 70% stake in the South Deep Water Tano (SDWT) operated by AGM Petroleum Ghana Limited.

To that end, Energy Minister Dr. Mathew Opoku Prempeh has requested parliament to make an approval that will enable the GNPC to purchase stakes in oil blocks of Aker Energy and AGM Petroleum.

This transaction has divided the front of Civil society Organisations in Ghana with some saying the deal is bad whereas others are for it.

In an earlier statement, Mr Ben Boakye indicated that the GNPC presents this single transaction as the silver bullet on steroids for Ghana to effectively deal with energy transition uncertainties.

“But is Aker leaving because of the energy transition? With all the theatrics around energy transition in the narrative to spend over a billion dollars, why have the deal’s supporters fail to tell us why Aker is selling the assets.

“We struggle to filter the arguments made by proponents of the transaction on stranded assets. We will isolate the deeper issues on why companies are leaving Ghana in subsequent writeups. However, the posturing that if Aker is exiting, GNPC must acquire its stake at any cost, and the worse part, Aker must linger on as the operator extraordinaire to lead GNPC to the promised land of operatorship is just camouflage."

“So, CSOs have been trying to demystify the narrative and policy inconsistencies embedded in the transaction and to show that fundamentally;

“GNPC does not need Aker to become an operator. In a series of writeups and public statements, we have shown that GNPC is just refusing to be an operator. The Corporation that holds three oil blocks as an operator has turned around to convince the executive and Parliament that it lacks capacity,” he said.

“Why is it holding on to the blocks if it is incapable of exploring them? To become an operator, you learn by doing from the basics. Drill a well, learn from the service companies to be able to control future drilling operations."

“Ghana has been producing oil for almost eleven years. GNPC has been party to drilling campaigns by all the producing companies. Is GNPC saying that those workers it attaches to the oil companies are not engineers, or they did not learn anything from Eni and Tullow? Our position is that the Corporation should advance serious arguments than this apprenticeship expedition."

“GNPC has not behaved like a company that wants to be an operator in its past expenditures and choices. For example, with about $1 billion (excluding its expenses on cash calls) of Ghana’s oil money disbursed to GNPC between 2011 and 2020, the Corporation did not drill a single well. Instead, the Corporation has signed on to a long-term importation of Gas, on a take-or-pay basis to suppress domestic gas production and now wants to convince the government that it requires budgetary support to become a commercial oil and gas operator. We are saying that the foremost responsibility of the state is to ensure proper diagnosis of the past before linking the national budget to the abysmal performance of the Corporation on expenditures."

“There are significant defects in the structure of the transaction which do not correlate with the claim that GNPC will learn to become an operator through the transaction. If the transaction succeeds, Aker will become a minority party with 10% interest in the Pecan and AGM blocks, then manages to stay on as an operator through a joint operating company (JOC). Essentially, GNPC will keep Aker as its boss in this transaction after paying them off. CSOs are at a loss how the JOC will transmit capacity to Explorco since Explorco itself will be a passive participant through its 40 percent stake in the JOC. A similar arrangement with Technip since 2014 is in clutches today by the same GNPC."

“GNPC's valuation of the Aker stake at $2 billion is baseless. It only supports the claims being made by Aker that it can simply multiply preproduction barrels by a given price and sell to the resource owner, even when it quotes the value of its assets at about $214 million to the shareholders of the company. Oil in the ground belongs to the state and means nothing until it is extracted. Therefore, the science of assuring investors that oil can be produced at a projected rate is much more rigorous than what Aker and GNPC are pushing down the throat of Ghanaians."

“So, let it be clear that CSOs’ challenge with the transaction is not simply about valuation. If anybody wants to understand the position of CSOs, it is important to pay attention to the details while reading the statement issued by the Alliance of CSOs, other individual activists and experts who have spoken and written in support of the CSOs position. It is not enough to refer and draw conclusions on structured interviews where specific questions are answered.”