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Business News of Wednesday, 12 September 2018

Source: citibusinessnews.com

PIAC probes GNPC over Takoradi assets & revenue losses

Dr. Steve Manteaw  PIAC Chairman Chairman of the Public Interest and Accountability Committee, Dr. Steve Manteaw

The Ghana National Petroleum Corporation (GNPC) has the next seven days to explain to the Public Interest and Accountability Committee (PIAC), circumstances surrounding the Corporation’s acquisition of properties in the Western region.

The move has been viewed by some as a conflict of interest which flouts administrative rules.

The Chairman of PIAC, Dr. Steve Manteaw explained to Citi Business News the basis for their action.

He says the inability of the committee to trace the use to which the 7.5 million dollars allocation was made, leaves more questions to be answered.

“You note that the transaction in question doesn’t have to do with refurbishment but has to do with acquisition. So we are not too clear what GNPC meant by what it reported to PIAC. So we are seeking further clarification as to whether indeed the amount in question was used for refurbishment or for the purchase of the properties in Takoradi,” he stated.

A statement on PIAC’s probe further said, “The Committee has written to GNPC to seek further clarifications of some of the issues that lie at the heart of the allegations. The responses and documentation provided by GNPC will enable PIAC come to an informed position on the matter.”

In August, an internal memo at GNPC and sighted by Citi News showed that the CEO, Dr. K.K. Sarpong ordered the payment of the said amount to Global Haulage, a company Dr. Sarpong had been associated with before.

According to the memo, the Chief Finance Officer was to transfer money for the payment of the six-block residential apartment in Chapel Hill in Takoradi.

GNPC has since dismissed any claims of conflict of interest.

In a related matter, the PIAC is suggesting the creation of an independent panel of experts to look into claims that the GNPC accepted lower end prices for Ghana’s crude oil from the TEN oilfields.

The situation is reported to have caused the country to lose millions of dollars as the prices were not pegged at competitive rates.

“We actually made a suggestion as to who should constitute this committee; GNPC itself, the Bank of Ghana, Ministries of Finance and Energy and the PIAC. We may co-opt other experts from outside these stakeholders to join in the investigations. This should be in our view, at the instance of the Finance Minister because he has overall responsibility for the management and use of petroleum revenue,” he observed.

PIAC’s position on lower crude oil prices

The PIAC report established that, in 2017, Ghana lifted four parcels of crude oil from the TEN Field.

These were in March, June, October, and December.

In all the four cases, the sales returns reported substantial price deviations from the Government’s benchmark price, Jubilee, and BRENT achieved prices.

The March lifting from TEN for instance, had a negative price differential of almost US$5/bbl against Jubilee, and slightly over $2/bbl against BRENT.

In October, the performance of the TEN crude was worse. It suffered a negative price differential of US$6/bbl against both Jubilee and BRENT.