Ghana: Energy Minister Defends Renegotiated AGM Contract

Energy Minister, Hon. John-Peter Amewu

Ghana’s Minister for Energy, John-Peter Amewu has mounted spirited defence for government’s decision to renegotiate a Petroleum Agreement (PA) the previous administration signed with AGM, a company affiliated to Aker Energy, a Norwegian Oil firm.

He held that the renegotiated Petroleum Agreement was done in the best interest of the West African country.

The Minister, and for that matter the President Akufo-Addo-led administration has come under fire for renegotiating the AGM contract.

Policy Think Tank, IMANI -Africa, Public Interest and Accountability Committee (PIAC), as well as a former CEO of Ghana National Petroleum Corporation Alex Mould, have criticised government for the renegotiated PA, which, they say, is bad compared to the previous one.

However, addressing investors at the ongoing Offshore Technology Conference in Houston, Texas, USA, Energy Minister John-Peter Amewu defended the government’s decision.

“The agenda for government for undertaking the current renegotiation of the AGM block is not to deny Ghanaians, the shareholders, the resource owners of what they ought to be due. We believe sincerely that 100% of nothing compared to 5% of 10. It is better to have 5% of 10,” he argued.

“Resources institute do not own any value unless they are brought to the world. It is clear that the current renegotiation that the government has achieved through the AGM block is something that will benefit all Ghanaians,” he added.

Reinforcing his message to Ghanaians, Mr Amewu said: “I want to use this opportunity to let everybody here understand that, the doubting Thomases that are of the view that, that era of sticking to the old gang that Petroleum Agreement will never be renegotiated, is gone.

“He was of the view that if Ghana should attract investors, then there was the need for the country to be dynamic and not hold on to the old way of doing things, which either drive away investors or scare them from coming.

“Gone are the days when companies will only work in challenging areas, and where there is conflict with the intention of increasing their returns on investments. Current dynamics and integrated companies are looking for peaceful environment, good governance and rule of law,” he stated.

Licensing Round

Touching on Ghana’s Licensing Round Bid for the five oil blocks, Mr Amewu said the ministry received 67 applications from more than 14 countries.

Amewu, who described the licensing round as the most competitive within the sub-region, said the interest in the licensing round clearly demonstrates the good governance, transparency, rule of law that the current government is practising.

“We’re currently going through our first ever licensing round to award Exploration and Production Rights, and soon after this, we will commence the second licensing round during which companies will be invited to express interest for the blocks that will be auctioned,” he said.

Capacity Building

The Government of Ghana, the Minister said, wants to take the oil and gas industry to a level where Ghanaian companies will be rendering to exploration companies in Ghana and beyond, all manner of services; be it equipment supplies, FPSO manufacturing, catering services et al.

“We want to bridge the gap between the oil and gas industry and the tertiary institutions and ensure that these institutions are well-equipped to churn out professionals who are both practically and theoretically competent.

He, therefore, charged the Petroleum Commission to collaborate with the International Oil Companies (IOCs) to create internship and research opportunities for undergraduate and postgraduate students in the oil companies.

He also appealed to International Oil Companies to help establish well-equipped laboratories in the universities, so that undergraduate and postgraduate students can familiarise themselves with the equipment and software being used in the oil and gas industry.

“This way, they can become readily employable and will require only minimal training when they come out of school and are employed by you (IOCs),” he said.

Invitation To Investors

The Minister made a passionate appeal to Ghanaians and international businesses to collaborate and explore the investment opportunities in Ghana’s oil and gas sector.

“I appeal to those in the diaspora to come home and invest in our oil and gas sector, for it is through investment that we can build local capacity for Ghana’s Oil and Gas sector.”