Ghana: Secret Behind GNPC, Aker Energy Deal Revealed
Credible information available to energyneswafrica.com suggests that the planned acquisition of stakes in the Aker Energy and AGM Petroleum Ghana oil blocks is a calculated move by some persons in the Akufo-Addo-government to enrich themselves at the expense of the West African nation.
According to information intercepted by energynewsafrica.com, should the deal go through, it would enrich persons who, our sources describe as a ‘gang of three’.
“For the record, if this deal is approved, Ghana will suffer because the government just taxes and enjoys royalties and not investment in a risky exploration. Now, the ‘gang of three’ wants to get wealth and collapse the portion Ghana enjoys without much risk,” the source explained.
Multiple sources of information obtained from persons in Government and people close to the country’s energy Ministry confirmed that the deal would not be in the interest of the nation and the citizenry, as claimed by GNPC in their memorandum but would only benefit few people in government who want to amass wealth.
Ghana’s Minister of Energy, Dr. Matthew Opoku, recently, submitted a memorandum to Parliament of Ghana on behalf of GNPC, seeking approval for a loan of $1.65 million to enable Ghana acquire stakes in two oil blocks.
In the memorandum, GNPC, through its exploration company, Explorco, wants to acquire 37 percent interest in Deep Water Tano/Cape Three Point (DWT/CTP) operated by Aker Energy Ghana Limited; and 70 percent stake in the South Dee Water Tano SDWT operated by AGM Petroleum Ghana Limited.
According to the memorandum, GNPC is proposing the establishment of a joint operating company between Aker Energy and AGM Petroleum Ghana Limited, and GNPC Explorco.
‘’An Operator Joint Venture (JV) will be formed between GNPC Explorco and Aker Energy/AGM,’’ the Parliament Memorandum said.
The joint operator company is expected to hold 40 percent stake with Aker Energy /AGM holding the remaining 60 per cent.
The Minister for Energy and the Minister for Finance are supposed to agree on a purchase price with Aker Energy/AGM.
Valuation
According to the document submitted to Parliament by the Energy Minister, the Aker Energy/AGM interests in the respective blocks have been valued by number of sources, including GNPC, Aker Energy/AGM, Artic Securities, Pareto Securities and Lambert Energy Advisory.
The valuations range between US$2.0 and US$2.55 billion, with prospects for the total share of Aker and AGM in the two blocks.
GNPC and Aker Energy/AGM jointly commissioned the independent Lambert Energy Advisory valuation report and agreed to use outcome as a reference point for the negotiation price.
Based on this report, the total share of Aker and AGM in the two blocks is US$2.55 billion.
The pro rata value of the GNPC Explorco share being acquired based on Lambert Energy Advisory is $US2.0 billion.
Value for money
In a statement issued last week, Alliance of Civil Society Organisations made up of 15 CSOs working in the extractive sector, good governance and anti-corruption raised concerns regarding the value of the assets as claimed by GNPC and Aker Energy/AGM.
The CSOs took issues with claims by Aker Energy that it had invested about US$800 million so far on the blocks in a document submitted to Parliament.
While GNPC claims it has verified the expenditures, the CSOs have doubts about the figures, insisting that it “appears inflated if juxtaposed against the amount of work done by Aker and the value of its acquisition three years ago.”
Aker Energy acquired Hess’s interest in the DWT/CTP for US$100 million in 2018. Before selling its interest to Aker, Hess had appraised the field with estimated recoverable oil of 450 million barrels.
In total, Hess drilled 12 wells (seven exploratory wells and five appraisals well). With that amount of work done, the highest valuation Hess got was about US$400 million in 2016 when it farmed out 40 percent to Lukoil and Fuel Trade for the entire field.
Aker claimed it has spent about US$420 million on five well drilled on the two blocks.
“In another document presented to the country’s Economic Management Team (EMT), the US$420 million relates only to the three wells on DWT/CTP. Given that the DWT/CTP cost is shared among the partners of the block the total expenditure claims for the wells could be in the region of US$600 or US$750 million compared with US$400 million by Hess for 12 wells, depending on which of the documents used. This is very high regardless of which of the information is used.
“The remaining US$280 million must be accounted for properly. GNPC claims that money was used for “certain activities essential for establishing resource in the blocks”. This is overly ambiguous and cannot be accepted as a cost with this kind of description which questions the distinction between that activity and data acquisition and studies done as part of exploration and appraisal,’’ the CSOs said.
According to energynewsafrica.com sources, Aker Energy is cash trapped and that explains their inability to develop their oil block.
Energynewsafrica.com’s sources indicated that Aker Energy was going to relinquish their stakes and walk away from the shores of Ghana just as ExxonMobil did.
One of the sources in Government remarked that “Aker Energy lied to the NPP government. We bend the rules to make it easier for them, but they have not been able to develop their oil block.
“What have they done with their own block?” the source quizzed.
The source concluded that “Aker does not have money.”
Another source in Government, who is angered by the GNPC’s to acquire stakes in Aker Energy and AGM blocks, wondered why the government now wants to buy stake in SDWT block when it reduced GNPC Explorco’s 24 percent from to 18 percent.
“First, why are we now paying for something we gave away for free? We also cannot be haphazard in the way we do things. We have to decide firmly on what type of National Oil Company we must have; either an asset manager or an exploration company. It is when that decision has been made that these investments decisions can make sense,’’ energynewsafrica.com’s source stated.
“Besides, Aker has proven they cannot develop the block so after a while, they will have to relinquish. So, why are we a poor nation bailing them out? Why is Aker not going to the capital markets to raise money as all others do?
“Those who got the free shares are now selling them back to government,” the source said.
Source: https://energynewsafrica.com
OTC: More Jobs For Ghanaian Youth In The Energy Sector-Egbert Faibile Promises
The Chief Executive Officer of the Petroleum Commission, Ghana’s petroleum upstream regulator, Mr. Egbert Faibille, has disclosed that as part of government’s local content agenda in the petroleum sector, the Commission is to sponsor a 10-month training course of 150 technicians at the Takoradi Technical University.
Mr Faibille made this known during an event dubbed ‘Around the World Series’ at the ongoing Offshore Technology Conference (OTC) in Houston, Texas, USA.
Mr Faibille is among a government delegation led by the Minister for Energy, Dr Matthew Opoku Prempeh. Others include senior officials of the Ministry as well as heads and senior managers of various energy sector agencies.
Tracing the background to this development, Mr Faibille stated that in the Commission’s engagements with International Oil Companies (ICOs) on local content engagements, it had emerged that there were deficiencies in the skill sets and qualifications of the mid-level technicians that the Commission sought to get engaged by the IOCs.
He stated that the Commission, under the leadership of the Ministry of Energy, was seeking to reverse this by rolling out a number of training programmes for high-end international certification for Ghanaian youth, and that in the instant case, the 150 candidates had been selected from a total of over 2,000 young Ghanaians who had been examined.
Speaking on this issue, the Public Relations Officer for the Ministry of Energy, Mr Kwasi Obeng-Fosu explained that, these candidates would, on the completion of their training, be issued City and Guilds certification and come out as process technicians, instrumentation technicians and mechanical technicians.
He quoted Mr Fabille: “When we started our journey, we were looking at the high-end engineering and geoscience training. But over the period, we forgot, possibly, that we would have FPSOs in our waters, for which you would still need mid-level specialist technicians to perform key roles, just as a hospital needs both doctors and laboratory or dispensing technicians.”
The result, he noted, was that when the FPSOs berthed, a certain deficiency came to light, and the idea now is that if a person is coming into the country as an expatriate technician for say 2-3 years, then by the time the person leaves, there should be in his or her place, a Ghanaian technician who has understudied the expatriate and has been trained up to their standard both in terms of certification and practical experience and ready to take over. Ultimately, he noted this would drive down the cost of running the FPSO.
Touching on service provision and in-country spending as part of the local content conversation in the sector, Mr Faibille stated that this hovered around 67-70 percent and lauded international oil companies like Tullow for their commitment to this. However, he called for diversification of the supply base, noting that it is the same companies that supply the same services for the same oil companies and he called that a market failure.
“Tullow and others must be more welcoming of other suppliers so that the chain of monopoly is broken, else the local content story will remain stagnant,” he remarked.
This year’s OTC, which started on Monday 16th August, 2021, will end today.
Source: https://energynewsafrica.com
Libya’s Oil Industry Desperately Needs A New National Budget
Libya will struggle to keep its oil production at current levels if the country fails to resolve a long-running dispute over its budget, according to Libya’s oil minister.
Mohamed Oun, Libya’s oil minister told Bloomberg that it plans on raising its crude oil production to 1.5 million barrels per day. This is up from the current 1.3 million barrels per day.
Back in July, Oun told media that it was shooting for 1.6 million bpd by the end of next year.
OPEC pegs Libya’s July crude oil production at 1.165 million bpd, according to secondary sources. Libya’s direct reported crude oil production came in at 1.273 million bpd, according to OPEC’s latest Monthly Oil Market Report.
But this plan’s success remains in jeopardy due to disagreements over the nation’s budget—Libya’s first national budget in nearly a decade.
“If the budget is not approved, there will be an impact and perhaps great difficulties in maintaining oil production rates,” Oun said.
Currently, Libya is exempt from OPEC’s output cuts.
Libya installed a unity government in March, and appointed a petroleum minister for the first time in five years.
Libya’s oil production was seriously disrupted for eight long months after a port blockade that began in January 2020.
But even after the blockade was lifted in September, Libya’s crude oil production has failed to be consistent, in part because of the Petroleum Facilities Guard strikes over unpaid salaries and a lack of funds needed to restore and maintain its infrastructure.
The most recent oil production disruption came from a leaky pipeline, which took 70,000 bpd offline while it assessed the damage and made repairs.
The latter highlights Libya’s growing need for funds to maintain its critical infrastructure.
Source: Oilprice.com
INNOVATION: Nuclear Scientists Hail US Fusion Breakthrough
Nuclear scientists using lasers the size of three football fields have revealed that they had generated a huge amount of energy from fusion, possibly offering hope for the development of a new clean energy source.
Experts focused their giant array of almost 200 laser beams onto a tiny spot to create a mega blast of energy — eight times more than they had ever done in the past.
Although the energy only lasted for a very short time — just 100 trillionths of a second — it took scientists closer to the holy grail of fusion ignition, the moment when they are creating more energy than they are using.
“This result is a historic advance for inertial confinement fusion research,” said Kim Budil, the director of Lawrence Livermore National Laboratory, which operates the National Ignition Facility in California, where the experiment took place this month.
Nuclear fusion is considered by some scientists to be a potential energy of the future, particularly because it produces little waste and no greenhouse gases.
It differs from fission, a technique currently used in nuclear power plants, where the bonds of heavy atomic nuclei are broken to release energy.
In the fusion process, two light atomic nuclei are “married” to create a heavy one. In this experiment scientists used two isotopes of hydrogen, giving rise to helium.
This is the process that is at work in stars, including our Sun.
“The NIF teams have done an extraordinary job,” said Professor Steven Rose, co-director of the center for research in this field at Imperial College London.
“This is the most significant advance in inertial fusion since its beginning in 1972.” But, warned Jeremy Chittenden, co-director of the same center in London, making this a useable source of energy is not going to be easy.
Ghana: Prof Nyarko Appointed Chairman Of Nuclear Power Ghana Board“Turning this concept into a renewable source of electrical power will probably be a long process and will involve overcoming significant technical challenges,” he said. Source: Energyworld.com
Texas: Ghana’s Energy Minister Woos Investors To Gas Sector At OTC
Ghana’s Minister for Energy, Dr Matthew Opoku Prempeh, has stated that the country’s huge gas reserves make it imperative for her to exploit and monetise it for industrialisation.
“I can feel the pressure on African countries to conform to the energy transition agenda, even though Africa has contributed marginally to the phenomenon that is driving this agenda. We have so much gas that we need the cooperation of Houston and its domiciled energy giants,” Dr Opoku Prempeh said.
The Minister made this call when he led a Ghanaian Delegation to pay a courtesy call on the Mayor of Houston, Sylvester Turner, at his office in downtown Houston, Texas, USA.
The Minister is in the United States for this year’s Offshore Technology Conference (OTC) which is currently taking place in Houston, Texas.
In attendance at the meeting were Ghana’s Ambassador to the USA, H.E Hajia Alima Mahama, Deputy Minister, Egyapa Mercer, the CEO of the Ghana Investment Promotion Centre (GIPC), Mr Yoofi Grant, as well as senior officials from the Ministry and some of its agencies.
Their discussions focused on the energy sector in the context of energy transition, Ghana’s investment climate, international trade and empowerment of Africa in the global scheme of things.
Emphasising the significance of Houston and, for that matter US, Dr Prempeh said Ghana’s first oil find in commercial quantities was spearheaded by Kosmos, a Houston-based company, which left the country but is back.
He further emphasised on Ghana’s huge gas reserves which must be monetised for the benefit of our industrial agenda whilst making the case for companies to invest in Ghana.
He noted that energy transition did not mean an abandonment of “our natural oil and gas resources, which is why Ghana is at this year’s OTC to encourage investment flows into the country’s energy sector.”
In agreeing with the Minister, Mayor Turner noted that from Senegal all the way to Angola, huge gas reserves in the Gulf of Guinea made it imperative to discuss ways in which the continent can benefit from them within the framework of the energy transition conversation, noting that through clean technology, investments in carbon sequestration etc., it was possible to make good progress towards clean energy and called on African leaders to be more involved in this.
“My commitment to Africa is very real, and people like me want to do everything we can to make it happen, which is why I think it is important to have the continent’s leaders engage with the energy companies,” he stated.
In response, Dr Prempeh revealed that West African energy leaders intend to meet ahead of the next World Congress on Petroleum in December 2021 to ensure synergies and coordination of their views and strategies for the industry.
On her part, Ghana’s Ambassador to the United States, H.E Hajia Alima Mahama stated that Africa is going through some reforms and recognises that she must develop through trade.
She disclosed that the AU recently ratified the AfCTFA, which was hosted in Ghana, so investing in Ghana is by extension an opening to a whole continental market. On job creation in the petroleum sector, she remarked that “the downstream sector will play a key role in the stability of the continent as it is a greater job creation tool.”
The OTC, which started on Monday, will end on Thursday 19th August, 2021. Among the Minister’s other engagements during the event are a keynote speech at a West African Oil and Gas Forum, an encounter with the Ghanaian community in Houston and several private engagements with various key players in Houston’s energy space.
Source: https://energynewsafrica.com
“My commitment to Africa is very real, and people like me want to do everything we can to make it happen, which is why I think it is important to have the continent’s leaders engage with the energy companies,” he stated.
In response, Dr Prempeh revealed that West African energy leaders intend to meet ahead of the next World Congress on Petroleum in December 2021 to ensure synergies and coordination of their views and strategies for the industry.
On her part, Ghana’s Ambassador to the United States, H.E Hajia Alima Mahama stated that Africa is going through some reforms and recognises that she must develop through trade.
She disclosed that the AU recently ratified the AfCTFA, which was hosted in Ghana, so investing in Ghana is by extension an opening to a whole continental market. On job creation in the petroleum sector, she remarked that “the downstream sector will play a key role in the stability of the continent as it is a greater job creation tool.”
The OTC, which started on Monday, will end on Thursday 19th August, 2021. Among the Minister’s other engagements during the event are a keynote speech at a West African Oil and Gas Forum, an encounter with the Ghanaian community in Houston and several private engagements with various key players in Houston’s energy space.
Source: https://energynewsafrica.com
Fuel Prices To Go Down Marginally-IES Predicts
The Institute for Energy Security (IES), a think- tank in the Republic of Ghana, has predicted a marginal reduction in fuel prices on the domestic market at the various pumps for the second pricing-window of August 2021.
The Institute said this will be due to the various changes in prices of the commodities on the international market which are expected to affect local market prices in Ghana.
“For this window, with the 1.49% reduction in the price of the International Benchmark- Brent crude, the 2.17% decrease in price of Gasoline, the 1.77% decrease in Gasoil price and the marginal depreciation of 0.17% of the local currency against the US dollar,” the IES said in a statement.
Local fuel market performanc monitored on a 15-day rolling basis, the price of fuel on the local Ghanaian market remained stable within the window under assessment.
Price of petroleum products within the first pricing-window of August 2021 saw the Oil Marketing Companies (OMCs) continue to maintain prices at the pump from the first pricing window of July.
The current national average price of fuel per litre at the pump remains pegged at Gh¢5.97 for both Gasoline and Gasoil on account of the relative price stability.
Prices dipped in this Windows in response to fears that the rising COVID-19 cases will affect demand for oil and its products. The rise in cases has been fueled almost entirely by the Delta Variant of the virus and the new Delta Plus variant both of which have highly contagious infection rates.
The place of concern was largely China which is the world’s largest importer of oil where cases continued to rise amid the Delta Variant spread from its shores.
The prices bounced back as the market seemed to shrug off the fears brought on by the lockdowns in China and other parts of Asia. The rise in demand across the Atlantic outweighed the impact from the COVID restrictions. The increase was also boosted by the passage of the $1.2 trillion infrastructure bill in the US Senate which is assumed will increase demand in oil products and improve the economic performance of US in the short-to-mid-term, providing the much needed support for prices.
The rebound in fuel demand in India following the lifting of restrictions on New Delhi in July, the highest since April this year also incentivized the markets hope of rebound in demand for oil products. The country’s crude oil imports in June-July dropped to an average of the 2014-2015 levels of 3.5 million barrels per day (mbpd) but saw a leap in the July-August loading of 4.2 mbpd on the back of the demand recovery.
The refined products, Gasoline and Gasoil prices as monitored on Standard and Poor’s global Platts platform show that price of the two international commodities experienced marginal dips within the period. For Gasoline there was a decrease in price by about 2.17 percent to close the window at $726.15 per metric tonne from an earlier price of $742.25 per metric tonne. For Gasoil, the price saw marginal decrease of 1.77 percent to close trading at $588.67 per metric tonne from the earlier window’s price of $599.25 per metric tonne.
Local Forex
IES Economic Desk data from the Foreign Exchange (Forex) market shows that the Cedi marginally depreciated against the U.S. Dollar by 0.17 percent to close trading in the window at Gh¢5.867 to the US Dollar from the previous window’s Gh¢5.86 to the US Dollar.
PROJECTIONS FOR AUGUST 2021 SECOND PRICING-WINDOW
The various change in prices of the commodities on the international market is expected to affect local market prices in Ghana. For this window, with the 1.49 percent reduction in the price of the International Benchmark- Brent crude, the 2.17 percent decrease in price of Gasoline, the 1.77 percent decrease in Gasoil price and the marginal depreciation of 0.17 percent of the local currency against the US Dollar; the Institute for Energy Security (IES) projects that price of fuel on the domestic market at the various pumps are set to dip as we enter the second Pricing-Window of August 2021.
The downward adjustment may however be offset by the adjustments from the largest local market shareholder, GOIL, TOTAL and Shell.
Signed:
Fritz Moses
Research Analyst, IES
Prices dipped in this Windows in response to fears that the rising COVID-19 cases will affect demand for oil and its products. The rise in cases has been fueled almost entirely by the Delta Variant of the virus and the new Delta Plus variant both of which have highly contagious infection rates.
The place of concern was largely China which is the world’s largest importer of oil where cases continued to rise amid the Delta Variant spread from its shores.
The prices bounced back as the market seemed to shrug off the fears brought on by the lockdowns in China and other parts of Asia. The rise in demand across the Atlantic outweighed the impact from the COVID restrictions. The increase was also boosted by the passage of the $1.2 trillion infrastructure bill in the US Senate which is assumed will increase demand in oil products and improve the economic performance of US in the short-to-mid-term, providing the much needed support for prices.
The rebound in fuel demand in India following the lifting of restrictions on New Delhi in July, the highest since April this year also incentivized the markets hope of rebound in demand for oil products. The country’s crude oil imports in June-July dropped to an average of the 2014-2015 levels of 3.5 million barrels per day (mbpd) but saw a leap in the July-August loading of 4.2 mbpd on the back of the demand recovery.
The refined products, Gasoline and Gasoil prices as monitored on Standard and Poor’s global Platts platform show that price of the two international commodities experienced marginal dips within the period. For Gasoline there was a decrease in price by about 2.17 percent to close the window at $726.15 per metric tonne from an earlier price of $742.25 per metric tonne. For Gasoil, the price saw marginal decrease of 1.77 percent to close trading at $588.67 per metric tonne from the earlier window’s price of $599.25 per metric tonne.
Local Forex
IES Economic Desk data from the Foreign Exchange (Forex) market shows that the Cedi marginally depreciated against the U.S. Dollar by 0.17 percent to close trading in the window at Gh¢5.867 to the US Dollar from the previous window’s Gh¢5.86 to the US Dollar.
PROJECTIONS FOR AUGUST 2021 SECOND PRICING-WINDOW
The various change in prices of the commodities on the international market is expected to affect local market prices in Ghana. For this window, with the 1.49 percent reduction in the price of the International Benchmark- Brent crude, the 2.17 percent decrease in price of Gasoline, the 1.77 percent decrease in Gasoil price and the marginal depreciation of 0.17 percent of the local currency against the US Dollar; the Institute for Energy Security (IES) projects that price of fuel on the domestic market at the various pumps are set to dip as we enter the second Pricing-Window of August 2021.
The downward adjustment may however be offset by the adjustments from the largest local market shareholder, GOIL, TOTAL and Shell.
Signed:
Fritz Moses
Research Analyst, IES
Nigeria: Two killed In Fuel Tanker Explosion; 14 Buses Burnt
Two Nigerians lost their lives while several others got injured following a fuel tanker accident at the International Building Materials Market, Ogidi, in Idemili North Local Government Area of Anambra State last Sunday night.
Report says about 14 buses and other properties worth millions of naira were also burnt in the fire incident.
According to report filed by Vanguard, the incident happened when an articulated lorry rammed into a stationary tanker laden with fuel and both caught fire.
“Several luxury buses parked around the area immediately went up in flames. Shops and buildings within the vicinity also caught fire and so much damage had been done before the arrival of the men of the state fire service,” an eye witness said as carried by Vanguard.
Nigeria Commissions LPG Plant At Oredo (Photos)The State Chief Fire Officer, Mr Martin Agbili confirmed that two people lost their lives, while 14 buses and other properties, including houses, were burnt. He said the fire could have escalated to other parts of the heavily built-up area if not for the prompt arrival of firemen and assistance from other fire stations, including the one inside the market. Source: https://energynewsafrica.com
Nigeria: Buhari Signs Historic Oil Overhaul Bill Into Law
Nigerian President Muhammadu Buhari has signed into law an oil overhaul bill that has been in the works for nearly two decades.
According to a presidential spokesman, the Nigerian leader sign the bill on Monday.
The package overhauls nearly every aspect of the country’s oil and gas production. The legislature cleared it for his signature last month.
Ghana: Gov’t In Talks With Lukoil For DWCTP Oil Block After EXXONMOBIL QuitThe bill has been in the works since the early 2000s, but the sensitivity of potential changes affecting Nigeria’s key source of revenue and foreign exchange has undermined all previous attempts at an overhaul. Major fuel marketers and other observers had been alarmed by a provision that they said could give Africa’s richest man, Aliko Dangote, an effective monopoly on fuel sales in Nigeria while the communities where oil and gas is produced had pressed for a larger share of oil money. Analysts say the bill’s approval this year was essential to attracting a shrinking pool of capital for fossil fuel development. Amendments to the package allowed a series of concessions for oil companies to lure investment. Source: https://energynewsafrica.com
Ghana: GNPC Fires Auditor-General… Urges Them To Be Diligent To Avoid Embarrassment
Ghana’s national oil company (GNPC) is accusing the Auditor-General of lacking understanding about the legal framework governing the affairs of the corporation.
The corporation believes it is about time the Auditor-General and his staff cultivated extreme diligence in their duties to avoid embarrassing themselves and the state entities they audit.
The Auditor-General, in its 2020 Report captured in paragraphs 683 to 691 a finding that the Ghana National Petroleum Corporation (GNPC) entered into five significant international business contracts totalling US$34,165,235.15 and £464,963.13 without parliamentary approval, contrary to the provisions of Article 181 of the 1992 Constitution.
But, the corporation, in a statement issued by the CEO, discounted the Auditor-General’s claims.
“This finding is entirely wrong as it has no factual or legal basis,” he said.
According to the corporation, “The Auditor-General made these flawed findings because his officers failed to apprise themselves accurately with the legal framework governing GNPC’s affairs.”
Giving a legal explanation to the issue, GNPC quoted Article 181(5) of the 1992 Constitution pertaining to Parliamentary approvals to mean that international business transactions strictly relates to “Government” business and not generally to statutory corporations set up for commercial purposes.
The statement noted that the Ghana National Petroleum Corporation Act (PNDCL 64) establishes GNPC as a distinct legal entity and, as such, it is not legally considered to be part of Government.
“The meaning of “Government” under Article 181(5) was settled in the case of Klomega (No.2) versus 1. The Attorney-General 2. Ghana Ports and Harbour Authority & 2 Others [2013-2014] SCGLR 581. In that case, the Supreme Court of Ghana stated as follows:
“In our view, “Government” in the context of Article 181(5) should mean, ordinarily, the central government and not operationally autonomous agencies of government. Where an agency has a separate legal personality distinct from central government, it usually comes under sectoral ministerial supervision.
“The Board of the corporation and the appropriate Ministry should then exercise oversight over its international business or economic agreements. That oversight should be exercised within the context of the procurement laws of this country.”
The Supreme Court, thus, interpreted Article 181(5) of the 1992 Constitution as meaning that generally, the contracts of statutory corporations were not within the ambit of the provisions.
However, in exceptional circumstances, the contracts of Ghanaian statutory corporations could be brought within the ambit of Article 181(5) through the alter ego doctrine. (See, p. 17)
In 2016, the principles enunciated in the Klomega decision were affirmed by the Supreme Court in the case of Dr Mark Assibey Yeboah versus 1. The Attorney General 2. The Electricity Company of Ghana 3. Ghana National Petroleum Corporation [2016] DLSC3187.
“It is important to point out that the said paragraphs 683-691 do not suggest that GNPC acted as the alter ego of Government. Indeed, the description of the contracts captured in the Table in paragraph 686 of the Auditor-General’s report shows that these contracts involve GNPC’s commercial activities and could not have been entered into as alter ego for Central Government.
“The requirement to seek parliamentary approval for the five transactions referred to in the report does not apply to GNPC and we request that the Auditor-General corrects his findings and conclusions as soon as possible. We urge the Auditor-General and his staff to cultivate extreme diligence in their duties to avoid embarrassing themselves and the state entities they audit,” the statement concluded.
Source: https://energynewsafrica.com
Ghana: GNPC Proposal For Aker Questionable –Energy & Associates
The Energy & Associates, an energy think-tank in the Republic of Ghana, has raised questions with the proposal by the Ghana National Petroleum Corporation (GNPC) to acquire a 70 percent stake in the South Deep Water Tano (SDWT) oil block and a 30 percent stake in Deep Water Tano/Cape Three Points (DWT/CTP) oil block operated by Aker Energy Ghana Limited.
Ghana’s national oil company, GNPC, is seeking parliamentary approval for a loan not exceeding $1.65 billion to enable the company buy stakes in the two oil blocks.
However, a statement issued by the energy think-tank described the move as shocking.
“As to what valuation this amount is based on is yet to be known,” it said.
“Our sources at the Petroleum Commission explains that valuations in the books of the Petroleum Commission is a little over $400 million, however, we are told Aker’s valuation is some $800 million.”
It also described as “quite worrying” the government’s decision to go ahead with the proposal when the valuation report that precipitated the decision to acquire this stake is not ready.
It noted how about $1 billion allocated GNPC over the past 10 years as the total amount in its exploration in Explorco is yet to ‘yield any prospects’.
“Increasing GNPC’s reserves and producing through GNPC Explorco by principle is laudable, however, this proposed deal with Aker is questionable and must be looked at for public interest purposes.”
Source: https://energynewsafrica.com
Schlumberger Withdraws Staff From Offshore Technology Conference As Covid Rates Climb
Reuters reports that oilfield services provider Schlumberger has withdrawn its staff from the Offshore Technology Conference, which commenced today, Monday 16, and is expected to end on August 19.
The annual conference attracts up to 60,000 attendees from around the world.
The decision was made as Houston reports near-record Covid-19 infection rates and hospitalizations.
In a statement reported by Reuters, Schlumberger spokesperson Moira Duff said “As the Houston hospitalization rates increase rapidly, Schlumberger has taken the decision to withdraw from the Offshore Technology Conference.”
An OTC spokesperson did not have an immediate response to Schlumberger’s withdrawal, according to Reuters.
A number of other companies who traditionally participate in the Offshore Technology Conference are not exhibiting at this year’s event, traditionally held in the first week of May.
Ghana: NPA Explains Variations In Fuel Prices
Ghana’s petroleum downstream regulator, National Petroleum Authority (NPA) has given reasons for the variations in fuel prices at the pump of the various Oil Marketing Companies retail outlets across the West African nation.
Ghana’s petroleum downstream was deregulated on 1st July, 2015.
Prior to the implementation of this policy, the regulator, NPA, set and published the Ex-Refinery and Ex-Pump prices of all petroleum products.
With the introduction of the deregulation policy, prices of fuel are now determined by market forces.
However, this seems not to be understood by consumers who keep wondering why there is no uniformity in fuel prices.
There are some consumers and industry players who hold the view that those OMCs, which are selling fuel at lower prices, were engaging in illegalities.
Currently, GOIL,Total and Shell, which are the market leaders, sell fuel at GHS6.23 per litre, with other OMCs selling between GHS5.70 and GHS5.90 per litre.
In a presentation by Abass Ibrahim Tasunti, Head of Pricing at NPA, during a media engagement on Pricing Of Petroleum Products in Ghana last week, he enumerated a number of key components which make up the price build up of petroleum products.
He mentioned Special Petroleum Tax, Energy Debt Recovery Levy, Road Fund Levy, Energy Fund Levy, Price Stabilisation & Recovery Levy, Energy Sector Recovery Levy and Sanitation & Pollution Levy as the components.
He further mentioned Primary Distribution Margin, Unified Petroleum Price Fund (UPPF), BOST Margin, Fuel Marking Margin, Distribution Compensation Margin, Marketers Margin, Dealers/Retailers Margin and LPG filling Plant/ Premix/ MGO-Local Administrative Margin as other components that make up the price build-up of petroleum products.
Mr Tasunti said though NPA does not rule out any illegalities in downstream petroleum sector, their monitoring of the transaction between Bulk Import Distribution and Export Companies (BIDECs) formerly BDCs and OMCs, shows that the former sell their products to the OMCs at different prices based on a number of factors.
That, he explained, is the reason why some of the smaller OMCs could be selling their fuel at prices lower than that of GOIL, Total, Shell and other leading OMCs.
“For example, you and I can go to the same BDC and buy at different prices based on several factors. The volume of product you are buying, your payment track record, your credit terms, etc could be factors that determine the price.
“There are instances we have seen variations of up to 50 pesewas between an OMC prices from BDCs. In a free market as we have now, if you’re a smaller brand and you want to compete with a bigger brand, you will have to come up with strategies to attract customers by making the product cheaper to be able to sell,” he pointed out.
He added that the Price Build-Up formula is such that the only component that the OMCs have control over is the price at which they buy from the BDCs and the OMC Margin.
Under this circumstance, Mr. Tasunti said some of the OMCs reduce their margins in order to increase their sale volumes.
He said NPA monitors the situation to ensure that no OMC sells fuel at unrealistically low prices.
Source: https://energynewsafrica.com
Ghana: ECG Cuts Electricity To 16 Companies In Tema Over GHS27.8M Debt
Ghana’s southern electricity distribution company, ECG, has cut power supply to 16 companies in Tema for failing to settle their indebtedness.
The companies owed ECG to the tune of GHS 27,857,498.59 as at June 2019.
This is contained in the 2020 Auditor General’s Report.
The companies are Eastern Quarry, 605,827.26, Nelplast Ghana Limited, Bigleb Company, Special Steel Ltd, Wahome Steel Ltd, Western Steel/Forgings,Movell Comp. Ltd, Sekyere Kwaku Badu, Yeeco Plastie and J D Preservation.
The rest are International Pack Ghana, Ds Plastic Ltd, Inter Pack, Bio-Plastic Co Ltd ,Heavens Ice Company Ltd and Zin Jin Industry
The companies fall in the category of Special Load Tariff (SLT).
“We noted during our audit that 16 Special Load Tariff (SLT) Companies in the region had not paid their debts amounting to GH¢27,857,498.59.
“Our further review indicated that Management had disconnected the meters of these Companies,” portion of the report said.
According to the Report, the Revenue Management Unit of Tema Region ECG explained that the names of the Companies have been submitted to Head Office Legal department to pursue for the recovery.
The Auditor-General warned that ECG could face financial challenges as a result of the nonpayment of debt by customers.
The Auditor-General recommended to management to expedite action on legal proceedings to recover the debt.
“Management is urged to ensure that companies do not reconnect the meters secretly,” the Auditor-General advised.
ECG said the accounts of the companies are monitored on monthly basis to prevent illegal reconnection.
Source: https://energynewsafrica.com
According to the Report, the Revenue Management Unit of Tema Region ECG explained that the names of the Companies have been submitted to Head Office Legal department to pursue for the recovery.
The Auditor-General warned that ECG could face financial challenges as a result of the nonpayment of debt by customers.
The Auditor-General recommended to management to expedite action on legal proceedings to recover the debt.
“Management is urged to ensure that companies do not reconnect the meters secretly,” the Auditor-General advised.
ECG said the accounts of the companies are monitored on monthly basis to prevent illegal reconnection.
Source: https://energynewsafrica.com
OTC: Energy Minister To Launch Ghana’s Pavilion
Ghana’s Minister for Energy, Dr Matthew Opoku Prempeh will, today, cut the ribbon to launch the West African nation’s Delegation Pavilion at the Offshore Technology Conference (OTC) 2021 in Houston, Texas, USA.
The OTC, an annual event which gathers over 3,000 oil and gas industry players, starts today and runs until Thursday, August 19, 2021.
The global event provides energy professionals with the opportunity to meet to exchange ideas and opinions to advance scientific and technical knowledge for offshore resources and environmental matters.
Dr Prempeh will be joined by one of his deputies, Mr Agyapa Mercer, senior officials from the Ministry, Ghana’s Ambassador to the U.S, CEOs of some sector agencies, as well as leading executives from operators in Ghana’s oil and gas industry.
The global event provides energy professionals with the opportunity to meet to exchange ideas and opinions to advance scientific and technical knowledge for offshore resources and environmental matters.
Dr Prempeh will be joined by one of his deputies, Mr Agyapa Mercer, senior officials from the Ministry, Ghana’s Ambassador to the U.S, CEOs of some sector agencies, as well as leading executives from operators in Ghana’s oil and gas industry.