IMANI Africa justifies stance on Aker Energy oil discovery
Franklin Cudjoe
Policy think tank, IMANI Africa says there is no need for it to apologise over its recent comments on the Aker Energy oil discovery in Ghana.
IMANI at a press briefing indicated that the country could lose 30 billion dollars due to the nature of the agreement covering the discovery and pointed to a potential conflict of interest involving GNPC Boss, Dr K.K Sarpong.
Government has denied the allegations and Dr K.K Sarpong and Fuel Trade have asked for an apology.
However, speaking to the issue, President of IMANI Africa, Franklin Cudjoe said they do not have to apologise for asking questions about the deal.
“What are we apologizing for? For asking a question? How do you apologize for asking a question from which someone has provided an answer? It is not a falsehood at all,” Mr. Cudjoe said.
In justifying the position of the policy think thank, Mr. Cudjoe said: “First of all, let us know that, the Petroleum Agreement expires in 2036 but the programme of development that Aker submitted is based on an extension of the term of the current concession they had [from 2036 to 2049] and that is when Aker projects that they will cease production of the wells.”
Dr. KK Sarpong had early on asked IMANI Africa to apologise for peddling falsehood against him over Ghana’s agreement with Aker Energy.
IMANI had alleged that Dr. Sarpong had ties with Fuel Trade, a partner agency of Aker Energy citing a clear case of possible conflict of interest against him.
But in a statement, KK Sarpong insisted that the allegations levelled against him were untrue because the involvement of Fuel Trade in the Aker agreement was sealed even before he was appointed.
“I wish to state emphatically that neither I nor my family own Fuel Trade as claimed by IMANI Ghana. Consequently, I, Dr.KK Sarpong, Chief Executive of GNPC cannot be accused of conflict of interest in dealing with Aker Energy as stated by IMANI Ghana. Indeed, Fuel Trade’s 2% stake in the Deepwater Tano Cape Three Points Block was acquired in 2014 long before my appointment in 2017 as Chief Executive of GNPC.”
Describing the act as unacceptable, he further chided IMANI for not doing proper background checks before publicly accusing him.
Mr. Sarpong thus demanded a retraction and a subsequent apology from the policy think thank or it risks facing a possible legal action.
“It is surprising to me that IMANI Ghana, a think tank of its sort could not carry out due diligence on the ownership of Fuel Trade Limited before arriving at its erroneous conclusion, causing me serious embarrassment and jeopardizing my standing in the international business community. No doubt, I have incurred immense economic, political and social coast by IMANI Ghana’s unjustifiable claim.
“This, I find unacceptable and hereby demand a retraction of the said claim and an unreserved apology from IMANI Ghana and its Deputy Director, Mr. Kofi Bentil within two weeks. The retraction should be given as much prominence as the press conference. Meanwhile, I reserve my rights to seek legal redress.”
Source: citinewsroom.com
Exxon Mobil’s first-quarter profit misses estimates on lower oil, gas prices
Exxon Mobil Corp on Friday reported a 49 percent fall in first-quarter profit that missed forecasts due to lower oil and gas prices and weakness across its major businesses that outweighed modest production gains.
The largest U.S. oil producer saw its first loss in its refining business since 2009 due to higher maintenance costs and what it called the worst refining margins in a decade.
Exxon also saw lower profits in chemicals and oil and gas production.
“It was a tough market environment for us this quarter,” Exxon Senior Vice President Jack Williams said on a call with analysts.
First-quarter profit fell to $2.35 billion, or 55 cents a share, from $4.65 billion, or $1.09 a share, a year ago.
Cash flow from operations of $8.3 billion was offset by capital spending and dividend payments of $10.4 billion.
“They had a large $2 billion cash flow shortfall that I don’t think investors will be comfortable with,” said Jennifer Rowland, analyst with Edward Jones.
She added that the share repurchases carried out by other oil majors seemed unlikely for Exxon. She expects the company to invest heavily and outspend cash flow for the next few years.
Shares were down about 2.8 percent in morning trading on Friday.
Irving, Texas-based Exxon also took a $115 million impairment charge in its U.S. oil and gas operations.
Analysts had expected Exxon to earn 70 cents per share, according to Refinitiv Eikon estimates.
Maintenance and production curtailments in its Canadian oil production, as well as weak oil and natural gas prices, pushed profits down in its oil and gas unit by 10.3 percent, the company said.
“Clearly this is a weak set of results,” RBC Capital Markets said in a client note, adding that, given the company’s solid fourth-quarter performance, it had seemed Exxon was turning a corner. “Clearly, the corner is further away than we expected and we expect this to lead to underperformance in the near term.”
Exxon’s oil and gas production rose 2 percent overall to 4 million barrels per day (bpd), up from 3.9 million bpd in the same period the year prior.
The company’s growing output in the Permian Basin, the largest U.S. shale basin, was a bright spot, rising to 226,000 barrels of oil equivalent per day in the first quarter, up 19 percent from the previous quarter and doubling the production level from the year prior.
Exxon is running 46 drilling rigs in the basin and plans to increase to 55 rigs by the end of the year.
A takeover battle between rival oil major Chevron Corp and Occidental Petroleum Corp for Anadarko Petroleum Corp has prompted speculation about other Permian Basin mergers and acquisitions.
“I would be surprised if over time we did not pick up some more Permian acreage,” Williams said when an analyst asked about possible acquisitions, but added that Exxon “doesn’t need to.”
The refining business lost $256 million in the first quarter, compared with a profit of $940 million in the same period last year. Exxon said refining margins were “improving” this quarter on higher gasoline demand.
Its chemicals business earned $518 million, down 53 percent from profits of $1.1 billion during the same period last year, while its upstream business, which pumps oil and gas, had a profit of $2.9 billion, down 18 percent.
Exxon Mobil’s first-quarter profit misses estimates on lower oil, gas prices
Exxon Mobil Corp on Friday reported a 49 percent fall in first-quarter profit that missed forecasts due to lower oil and gas prices and weakness across its major businesses that outweighed modest production gains.
The largest U.S. oil producer saw its first loss in its refining business since 2009 due to higher maintenance costs and what it called the worst refining margins in a decade.
Exxon also saw lower profits in chemicals and oil and gas production.
“It was a tough market environment for us this quarter,” Exxon Senior Vice President Jack Williams said on a call with analysts.
First-quarter profit fell to $2.35 billion, or 55 cents a share, from $4.65 billion, or $1.09 a share, a year ago.
Cash flow from operations of $8.3 billion was offset by capital spending and dividend payments of $10.4 billion.
“They had a large $2 billion cash flow shortfall that I don’t think investors will be comfortable with,” said Jennifer Rowland, analyst with Edward Jones.
She added that the share repurchases carried out by other oil majors seemed unlikely for Exxon. She expects the company to invest heavily and outspend cash flow for the next few years.
Shares were down about 2.8 percent in morning trading on Friday.
Irving, Texas-based Exxon also took a $115 million impairment charge in its U.S. oil and gas operations.
Analysts had expected Exxon to earn 70 cents per share, according to Refinitiv Eikon estimates.
Maintenance and production curtailments in its Canadian oil production, as well as weak oil and natural gas prices, pushed profits down in its oil and gas unit by 10.3 percent, the company said.
“Clearly this is a weak set of results,” RBC Capital Markets said in a client note, adding that, given the company’s solid fourth-quarter performance, it had seemed Exxon was turning a corner. “Clearly, the corner is further away than we expected and we expect this to lead to underperformance in the near term.”
Exxon’s oil and gas production rose 2 percent overall to 4 million barrels per day (bpd), up from 3.9 million bpd in the same period the year prior.
The company’s growing output in the Permian Basin, the largest U.S. shale basin, was a bright spot, rising to 226,000 barrels of oil equivalent per day in the first quarter, up 19 percent from the previous quarter and doubling the production level from the year prior.
Exxon is running 46 drilling rigs in the basin and plans to increase to 55 rigs by the end of the year.
A takeover battle between rival oil major Chevron Corp and Occidental Petroleum Corp for Anadarko Petroleum Corp has prompted speculation about other Permian Basin mergers and acquisitions.
“I would be surprised if over time we did not pick up some more Permian acreage,” Williams said when an analyst asked about possible acquisitions, but added that Exxon “doesn’t need to.”
The refining business lost $256 million in the first quarter, compared with a profit of $940 million in the same period last year. Exxon said refining margins were “improving” this quarter on higher gasoline demand.
Its chemicals business earned $518 million, down 53 percent from profits of $1.1 billion during the same period last year, while its upstream business, which pumps oil and gas, had a profit of $2.9 billion, down 18 percent.
Statement: Energy Ministry’s response to IMANI’s ‘false’ claims
PRESS STATEMENT READ BY THE HON. MINISTER OF ENERGY AT A PRESS CONFERENCE HELD AT THE MINISTRY OF INFORMATION ON 26th DAY OF APRIL 2019
BACKGROUND
Ladies and Gentlemen, yesterday, a public advocacy think-tank – IMANI held a press conference at which it sought to challenge what it thinks are various acts of omissions and/or commissions on the part of the Government of Ghana in respect of the plan of development (PoD) submitted by Aker Energy for and on behalf of all the contracting parties in the Petroleum Agreement (PA) covering the Deep Water Tano/Cape Three Points (DWT/CTP) contract area.
The Ministry of Energy has called this press conference to set the record straight, particularly to the extent that IMANI put out total falsehoods.
The PA covering the DWT/CTP contract area operated by Aker Energy was executed on 8thFebruary, 2006between the Government of Ghana -GNPC, AMERADA HESS Corporation. Lukoil and FUELTRADEsubsequently farmed in 2015. Fueltrade’s participating interest was set at 2% for which it paid about 9 million USD with a performance guarantee of 2 million USD.
The contract area has 7 discoveries namely pecan north, almond, cob, beech, pecan, paradise and hickory north. The first five are oil discoveries while paradise and hickory north are gas discoveries.
Aker Energy acquired the interest of AMERADA HESS Ghana Limited in February 2018 and proceeded to continue the unfinished works under the programme of appraisal to HESS.
IS GHANA LOSING $30 BILLION?
Imani tried to alarm Ghanaians about a potential loss of $30 billion to the country if the government failed to negotiate a new petroleum agreement with new terms with the DWT/CTP partners. This is absolutely false.
Aker Energy, on behalf of its partners announced after a successful appraisal of the Pecan Field discovery, a significant oil find as captured below: “Based on existing subsurface data from seismic, wells drilled and an analysis of the Pecan -4A well result, the existing discoveries are estimated to contain gross contingent resources (2C) of 450 – 550 million barrels of oil equivalent (mmboe)”.
How did IMANI arrive at valuation of the field at $30 billion?
It simply multiplied the assumed price of $65 per barrel by 450 million barrels. This exposes the weaknesses in IMANI’s analyses as well asits poor understanding of petroleum economics.
The 450 million barrels of oil equivalent are gross contingent resources, which are the potential resource available all of which cannot be recovered under current technology. IMANI wants us to believe that all the 450million barrels of oil equivalent will be produced but fails to explain how that can be.
In Ghana, our average crude oil recovery rate is 25%. At this rate, the field value will be estimated at $7.3 billion assuming a price of $65 per barrel. We are working with Aker Energy to enhance oil recovery mechanismto achieve a recovery rate of 40%, which will be the highest in Ghana’s oil and gas history and which occurrence will appreciate the value to $11.7 billion. This will be a significant gain for both Ghana and the partners.
IS GHANA LOSING MONEY AS CLAIMED BY IMANI?
It is curious how IMANI reasoned that Ghana stands to lose $30billion if we do not negotiate a new petroleum agreement. There is no basis for a new petroleum agreement. This is because the work that was done by Aker Energy formed part of an appraisal programme based on the existing petroleum agreement.
These works: the drilling of Pecan 4a, Pecan South and Pecan South Eastwells were part of the appraisal programme submitted by Hess and inherited by Aker Energyand partners but had to be postponed for two and a half years as a result of the provisional ruling of the Special Chamber of the International Tribunal of the Law of the Sea (ITLOS), that amounted to an injunction, freezing new drilling activities within the disputed area part of which was the Pecan field. This provisional ruling, which was delivered on 25th April 2015, affected 69% the current DWT/CTP contract area and parts of other contract areas as well.
Following this development, the then Minister for Petroleum reached an agreement with the parties to the DWT/CTP contract area that the PoD should be submitted 10 months after the final ruling on the ITLOS case. This was also further delayed by 8 months in order to include the results of the entire Pecan appraisals in the PoD.
The continuation of the appraisal programme has led to a significant gain for Ghana because it has established a new find which forms part of the existingPecan oil pool missed by HESS.
IMANI stated with certainty in its presentation that there was no dynamic communication, without providing a shred of evidence.As we speak now, we can confirm that the wells drilled encountered the same geological reservoir system as the Pecan field. AKER Energy is still evaluating how the wells are connected.
Therefore, we wonder the basis for IMANI’s conclusion that there is no dynamic communication between the wells. IMANI was also not truthful when it stated that AKER drilled HICKORY WEST as an exploration well. HICKORY WEST has not been drilled.
It must be stated that as a country we operate within the laws governing petroleum agreements, therefore any petroleum find when produced will be shared according to the terms of the applicable petroleum agreement.
The DWT/CTP PA provides a crude oil sharing mechanism in addition to other benefits such as taxes, of which under the existing agreement, Ghana’s share is estimated at about 55-60% of the net oil produced. It is important to state thatthese benefits are spread over the field life.Therefore, for anybody to contend that these were exploration wells drilled outside the exploration period hence any petroleum find from these works require a new petroleum agreement with new terms is grossly misinformed.
The finds from these appraisal wells drilled just confirmed the areal extent of the original pecan discovery. That is why their names are Pecan 4A, Pecan South 1A and Pecan South East 1A; showing their relation.
IMANI’s CURIOUS TRENDS
IMANI’s CLAIM OF FAILURE BY GOVERNMENT TO OBTAIN ADDITIONAL SHARES
GNPC Explorco was given the opportunity to exercise its right to acquire a 10% commercial interest in the block. GNPC Explorco failed to exercise the right when it was due in 2015. We are equally curious why GNPC did not exercise this right at the time. Records show that provision was made in the GNPC budget for 2015 and repeated in 2016 for the acquisition of this interest. However, for whatever reason, the then GNPC administration did not apply the funds to pay for the interest.
POD ISSUES
AKER ENERGY’S POD & ACTIONS TAKEN SINCE IT WAS SUBMITTED
Aker Energy submitted a Plan of Development & Operations (PoD) to the Ministry of Energy on the 28th day of March, 2019. On receipt of the PoD, the Ministry of Energy wrote to the Petroleum Commission requesting it to review the PoD and make a recommendation to the Honourable Minister of Energy.
The reference of the PoD to the Commission was done pursuant to Section 28(1) of the Petroleum (Exploration and Production) Act, 2016; Act 919 which provides “The Minister shall not approve a plan of development and operation unless…the Minister has received recommendation from the Commission and relevant agencies…”
The Petroleum Commission, proceeded to do a thorough review of the PoD and submitted an Advisory Paper to the Hon. Minister of Energy by a letter dated the 17th day of April, 2019.
In reviewing the PoD, the Petroleum Commission relied on the provisions of Sections 27 and 28 of Act 919 and also Article 8.11(a)-(l) of the Deepwater Tano/Cape Three Points (DWT/CTP) Petroleum Agreement. The provisions of the law and the PA cited constitute 29 conditions-precedent/checklist that had to be satisfied by Aker Energy’s PoD for same to be passed as approved on the recommendation of the Petroleum Commission.
Based on a thorough study and review of the Aker Energy’s PoD, the Commission came to the conclusion that Aker Energy’s PoD cannot be approved in its present form. As indicated earlier, the Commission by a letter dated the 17th day of April, 2019 transmitted an Advisory Paper made up of the reasons why the PoD cannot be approved; to the Honourable Minister stating among others that Aker Energy must be made to review the PoD to comply with the necessary provisions of the law and the DWT/CTP PA.
The Honourable Minister, considered the Petroleum Commission’s Advisory Paper and agreed with all the reasons it gave. Subsequently, by a letter dated the 24th day of April, 2019 communicated to Aker Energy that its PoD cannot be approved in its present form further to which it was directed to review the PoD based on the reasons which were attached to the letter and submit a revised PoD within 45 days of its receipt of the letter.
These are matters of record, yet Imani, without checking whether any such steps had been taken since the PoD was submitted claimed at its press conference yesterday that even though it is aware that a recommendation had been made to the Honourable Minister, it did not know whether Aker Energy had been written to. Imani’s fear as it claimed yesterday was that if the Honourable Minister does not write to Aker Energy, the 30-day time limitation by which any failure to direct a revised PoD to be submitted, will mean that the PoD shall be deemed approved. Well, the Ministry of Energy received the PoD on the 28th day of March, 2019 and wrote to Aker Energy on the 24th day of April, 2019 directing it to submit a revised PoD in 45 days because its PoD cannot be approved in its present form. A simple calculation of the passage of time between 28th March, 2019 and 24th April, 2019 shows that it was 28-days within the 30-day limitation. In any event, a PoD is a very important document and it is only fair, just and equitable that in asking for it to be reviewed, the reasons must be cogent and well-reasoned.
Aker Energy has as of the 24th day of April, 2019 received the decision of the Ministry of Energy for it to submit a revised PoD and thus, the fear of Imani as expressed is most unfounded. A simple phone call to the Ministry of Energy will have allayed this fear but alas! Imani failed to do this and sought to lead the people of this country astray in a move bereft of true facts and proof.
For the avoidance of doubt it is provided at Article 8.13 of the DWTCP/PA thus:
“After thirty (30) days following its submission, the Development Plan shall be deemed approved as submitted, unless the Minister has before the end of the said thirty (30) day period given Contractor a notice in writing stating:
that the Development Plan as submitted has not been approved; and
the revisions proposed by the Minister, to the Development Plan as submitted, and the reasons thereof….”
The Petroleum Commission rightly advised the Honourable Minister of this time limitation in its Advisory Paper and the Honourable Minister fully agreed with that advice and accordingly wrote with the full reasons why the Aker PoD ought to be revised and submitted. Once again, Imani did not check with the Ministry of Energy whether it is aware of this provision and if so, what it was doing about it?
It is disappointing that Imani has acted in the manner it has in this matter, especially when there had been an engagement with them a few weeks ago on these matters and the knowledge they have that the Ministry of Energy is open for all manner of enquiries and engagements.
IRREGULAR EXTENSION
IMANI accuses AKER Energy of having unilaterally determined in the Plan of Development when it will cease production without permission from Government. It also alleges that AKER has extended the period of the Petroleum Agreement from 2036 to 2049. This is not true. Extension of the period of a Petroleum Agreement is the preserve of Parliament. Not even the Minister for Energy has the power to grant such extension.
CONDITIONS-PRECEDENT IN PLAN OF DEVELOPMENT
IMANI stated that a contractor cannot give pre-conditionsin a Plan of Development. A simple check by IMANI would have indicated that the Petroleum commission had already made this observation to the Hon Minister in a letter dated 17th April 2019 and this has already been communicated to the contractor, Aker Energy. It is in fact only the Minister who give conditions precedent when approving a PoD under Section 27 (7) of Act 919.
REQUEST TO RENEGOTIATE ALREADY FAVOURABLE TERMS
IMANI sought to create the impression that the old law under which the DWT/CTP PA was signed in 2006 had favourable terms, hence the passing of the new Petroleum Law Act 919. A historical review of oil producing countries will show that countries that are frontier usually provide favourable terms to attract investors. As they mature, and their basins are geologically de-risked, and they resort to fiscal graduation to capture more benefits. Ghana is no exception.
Notwithstanding this, we wish to state categorically that AKER ENERGY and the Government of Ghana are not in negotiation over the DWT/CTP PA, and the impression created that the PA is being renegotiated to give AKER Energy favourable terms is false.
The reference to the letter signed by the former Energy Minister is in respect of a different South Deep Water Tano (SDWT) Petroleum Agreement commonly known as the AGM block. The attempt to relate the current AKER Energy project to a different agreement is therefore misleading if not mischievous.
AKER ENERGY CONDUCTING EXPLORATION AND APPRAISAL IN THE CONTRACT AREA AND HAS SUBMITTED A PLAN OF DEVELOPMENT
AKER Energy drilled Pecan South and Pecan South East in March and April 2019 before submitting a Plan of Development. This is allowed under the Petroleum Agreement. However, these were not drilled as exploration wells. They were drilled as appraisal wells.
Article 8.19 of the PA provides that any area which forms part of a discovery area in respect of which a contractor has given the Minister a separate notice indicating that such discovery merits appraisal or confirmation that same merits appraisals, need not be relinquished, contrary to what IMANI is claiming; and shall be drilled as appraisal wells. This is where the issue of dynamic communication comes in.
FUEL TRADE LIMITED – CONFLICT OF INTEREST
IMANI alleges that Fuel Trade is owned by Dr. K.K. Sarpong/ his family. Dr. K.K. Sarpong has already denied this allegation in a press release yesterday.
However, we wish to inform you that Fuel Trade came into the Petroleum Agreement during the NDC regime at the time that Dr. K.K. Sarpong did not know if ever he would be the CEO of GNPC. We wish to state that we have not renegotiated the AKER Petroleum Agreement and we are at a loss how Dr. K. K. Sarpong could be the chief negotiator over what does not exit.
THANK YOU
Amewu shoots down IMANI’s claim; says Ghana rather gains in Aker Energy deal
Ghana’s Minister for Energy John-Peter Amewu, says Policy Think Tank IMANI-Africa goofed when it sought to question portions of the contractual agreement between the government of Ghana and Norwegian Oil firm, Aker Energy.
IMANI-Africa at a public advocacy program on Thursday, 25th April, 2019 challenged what it says were various acts of omissions on the part of the Government of Ghana in respect of the plan of development submitted by Aker Energy and on behalf of all the contracting parties in the Petroleum Agreement (PA) covering the Deep Water Tano/Cape Three Points (DWT/CTP) contract area.
But the Energy Minister John-Peter Amewu at a news briefing in Accra Friday described the claims by IMANI as total falsehood.
In providing some background information on the agreement, Mr. Amewu said the PA covering the DWT/CTP contract area operated by Aker Energy was executed on 8thFebruary, 2006 between the Government of Ghana -GNPC, AMERADA HESS Corporation, Lukoil and FUELTRADE subsequently farmed in 2015.
He disclosed that Fueltrade’s participating interest was set at 2% for which it paid about 9 million USD with a performance guarantee of 2 million USD.
“The contract area has 7 discoveries namely pecan north, almond, cob, beech, pecan, paradise and hickory north. The first five are oil discoveries while paradise and hickory north are gas discoveries. Aker Energy acquired the interest of AMERADA HESS Ghana Limited in February 2018 and proceeded to continue the unfinished works under the programme of appraisal to HESS” he added.
Is Ghana losing $30 billion?
The Energy Minister criticised IMANI for misinforming Ghanaians on a potential loss of $30 billion to the country if the government failed to negotiate a new petroleum agreement.
“IMANI tried to alarm Ghanaians about a potential loss of $30 billion to the country if the government failed to negotiate a new petroleum agreement with new terms with the DWT/CTP partners. This is absolutely false” he said.
Mr. Amewu revealed that Aker Energy, on behalf of its partners announced after a successful appraisal of the Pecan Field discovery, a significant oil find as captured below “Based on existing subsurface data from seismic, wells drilled and an analysis of the Pecan -4A well result, the existing discoveries are estimated to contain gross contingent resources (2C) of 450 – 550 million barrels of oil equivalent.
How did IMANI arrive at valuation of the field at $30 billion?
In questioning the valuation of the field at $30 billion, the Energy Minister said IMANI simply multiplied the assumed price of $65 per barrel by 450 million barrels.
“This exposes the weaknesses in IMANI’s analyses as well as its poor understanding of petroleum economics. The 450 million barrels of oil equivalent are gross contingent resources, which are the potential resource available all of which cannot be recovered under current technology. IMANI wants us to believe that all the 450million barrels of oil equivalent will be produced but fails to explain how that can be” Amewu said.
He added that “In Ghana, our average crude oil recovery rate is 25%. At this rate, the field value will be estimated at $7.3 billion assuming a price of $65 per barrel. We are working with Aker Energy to enhance oil recovery mechanism to achieve a recovery rate of 40%, which will be the highest in Ghana’s oil and gas history and which occurrence will appreciate the value to $11.7 billion. This will be a significant gain for both Ghana and the partners”.
He announced that there was no basis for a new petroleum agreement as claimed by IMANI because the work that was done by Aker Energy formed part of an appraisal programme based on the existing petroleum agreement.
“It must be stated that as a country we operate within the laws governing petroleum agreements, therefore any petroleum find when produced will be shared according to the terms of the applicable petroleum agreement” said Amewu.
The Minister in his concluding presentation denied allegations by IMANI that Fuel Trade is owned by the Chief Executive of the Ghana National Petroleum Authority Dr. K.K. Sarpong and his family.
AECF launches $20m solar fund for Ghana, Nigeria and others
The Africa Enterprise Challenge Fund (AECF) in partnership with United Kingdom Government has launched the Household Solar Round 2 competition worth $20,600,000 (£16m).
The competition seeks to accelerate access to transformative solar home systems to the rural poor households in Ethiopia, Somalia, Ghana, Nigeria, and Senegal.
“The increasing demand for electricity, high cost of power generation and limited supply of electricity to rural areas in sub-Saharan African is a narrative that constantly repeats its self across the continent,” said Dr Christian Rogg, Head of Office, DFID Ethiopia.
“Although the situation persists, initiatives promoting household solar systems through the private sector have started to offer affordable solutions to rural communities for lighting and economic use.”
In Ethiopia, approximately 11 million rural households do not have access to electricity, making the off-grid market attractive for private sector.
In his speech, H. E. Dr Frehiwot Woldehanna, State Minister of Water, Irrigation and Electricity, said: “We are committed to working with AECF and DFID to support companies provide access to electricity to our rural populations. Rapid growth and transformational development requires reliable energy production, supply and efficiency. Without adequate and reliable supply of energy, no industrialisation, agricultural value additions, job creation, economic and sustainable growth are achievable.”
AECF explained that the REACT Household Solar-Round Two funding will provide a mix of interest free loans, repayable grants and technical assistance to the private sector. As a critical component of Africa Clean Energy (ACE) Programme, the competition seeks to increase the supply of household systems to rural markets at affordable costs, facilitated through innovative financing models, operating and distribution models such as PAYGO and micro-financed interventions.
“Renewables provide just 18% of Africa’s current power generating capacity, therefore developing off-grid alternatives could create many more opportunities and transform millions of lives. Solar home systems are a simple solution that do not appear in the macro-economic statistics yet they have the ability to transform the lives of millions of school children,” Daniel Ohonde, CEO, The AECF.
Over the past seven years AECF has funded private sector companies that take advantage of market drivers like mobile network and data services, mobile payment systems, growing micro- finance networks and an appreciation of social collateral to accelerate access to solar home systems in rural sub-Saharan Africa. Read: SANEDI encourages green loans to develop renewable projects
“With REACT Household Solar Round One investing a total of $7 million in 10 companies spread across 4 countries, the additional funding for Round Two will enable AECF to continue investing in private sector companies to deliver business models which accelerate access to transformative solar home systems to rural markets in sub Saharan Africa,” Daniel Ohonde, CEO, AECF.
GNPC Boss denies IMANI-Ghana’s claim; demands retraction and apology
The Chief Executive Officer of Ghana National Petroleum Commission (GNPC) Dr. K. K Sarpong, has denied a claim by IMANI- Ghana citing him for potential conflict of interest over an agreement between the GNPC and a private firm.
His denial follows a news conference by the policy think tank Thursday, where it called on government to take proactive steps to protect the state’s interest recently discovered oil wells in the Deepwater Tano Cape Three Points (DWT/CTP) block offshore Ghana.
At the said event, the IMANI Vice President, Kofi Bentil, alleged that the GNPC boss may be involved in a potential conflict of interest situation after he connected Dr. K.K Sarpong with Fueltrade Ghana Limited, the private firm which holds a 2% interest the DWT/CTP block.
Kofi Bentil said if this interest still obtains, the position of Dr K.K. Sarpong as head of GNPC which is the government’s chief negotiator on oil matters, raises questions.
However, the GNPC Boss has described the claim as false.
“…I wish to state emphatically that neither I nor my family own Fuel Trade as claimed by IMANI Ghana,” Dr. K.K Sarpong stated in a statement Thursday.
According to him, the 2% stake Fueltrade holds in the new discovery, was acquired in 2014, pre-dating his appointment as Chief Executive of the state entity in 2017.
He expressed surprise that a credible organisation as IMANI Ghana, could not carry out due diligence on the ownership of Fueltrade Limited “before arriving at its erroneous conclusion, causing me serious embarrassment and jeopardising my standing in the international business community.”
The “unjustifiable claim” he indicated, had caused him “immense economic, political and social cost which he described as “unacceptable” and thereby “demand a retraction of the said claim and an unreserved apology” from IMANI and Kofi Bentil not later than “two weeks”.
Source: Myjoyonline.com
FPSO Shuts Down for Routine Maintenance
The TEN partners have announced the shutdown of the TEN FPSO Professor John Evans Attah Mills for routine maintenance.
This is in consultation with the Ministry of Energy and Ghana National Gas Company.
The routine shutdown began on Monday 22nd April and is intended to enable the completion of outstanding work scopes from the project phase.
According to a statement from Tullow Oil, “this routine shutdown is intended to enable the completion of outstanding work scopes from the project phase.
“In addition, the Operator, Tullow Ghana Limited, will carry out essential maintenance works, consistent with the facility’s design specification, to ensure ongoing reliability of the production process.”
“The shutdown is projected to last approximately two weeks and has been adequately planned to avoid any interruption of gas supply to the Ghana National Gas Company (GNGC),” the statement added.
The shutdown ends on the 2nd of May, 2019.
TEN Partners include Tullow Ghana Limited, Kosmos Energy, Ghana National Petroleum Corporation, Anadarko Petroleum and PetroSA
Ghana Oil Company Limited changes to GOIL Company Limited
The Board and Management of Ghana Oil Company Limited (GOIL) will soon change their name to GOIL Company Limited.
The proposed change of name from Ghana Oil Company Limited to GOIL Company Limited would be among other issues to be tabled at the 50th Annual General Meeting slated for May 23.
A Notice of AGM to shareholders signed by Nana Ama Kusi-Appouh, Company Secretary and made available to the media said as a result of the change of name, the AGM would empower the Board to alter its regulations to reflect the change of name.
The notice also indicated that the GOIL Board of Directors would receive the 2018 Accounts, receive and consider the reports of the Directors and Auditors and the financial statements of the company from January to December 31, 2018; and declare dividend for the year.
It would also elect by rotation Directors retiring by notation; and also authorise the Directors to fix the remuneration of the Auditors in accordance with Section 134 (6a) and Section 134 (11a) of the Companies Act 1963, Act 179 as well as fix the remuneration of the Directors.
The AGM would also consider a proposal for GOIL to be the local content partner of Exxon Mobile Exploration and Production Ghana (Deepwater) Limited through its wholly-owned subsidiary GOIL Offshore Company Limited in its exploration activities in respect of Deepwater Cape Three-point Block Offshore of Ghana.
Meanwhile, in an interview, Mr Patrick Akpe Kwame Akorli, GOIL Group Chief Executive Officer expressed gratitude to its cherished customers for their loyalty to the GOIL brand.
“As the foremost indigenous Ghanaian OMC, GOIL is proud of its achievements. We are now the country’s leading OMC. We have been recognised by the Ghana Investment Promotions Centre, the Chartered Institute of Marketing Ghana, Association of Ghana Industries, Ghana Entrepreneurs Association, and many other prestigious bodies and national organizations.
“We have achieved these without sacrificing health and safety standards as well as the quality of our products. GOIL means business and we have taken a significant step in attaining ISO certification and ratification.
“The future looks bright as we take giant steps in expanding aviation fuel facilities, investing in Bunkering storage, and the building of Liquefied Natural Gas and Bitumen plants.
Mr Akorli who is also the GOIL Managing Director explained that, the Board and Management believed that with the continued support of Ghanaians through the use of their purchasing power, “GOIL will continue to grow to become a successful Multinational Oil Company”.
Source: GNA
Ghana’s NPA, Korea Petroleum sign MoU
Hassan Tampuli and Son Joo-Suk exchanging documents
The Chief Executive of the National Petroleum Authority (NPA) of Ghana,Hassan Tampuli, and his counterpart at the Korean Petroleum Quality and Distribution Authority (K-Petro), Son Joo-Suk, have pledged their commitment to work together to promote quality petroleum products, while contributing to efforts to curb carbon emissions.
In this regard, K-Petro has agreed to assist the NPA with the needed support to improve mechanisms for promoting petroleum quality and distribution in the country.
Speaking through an interpreter at the signing ceremony of a memorandum of understanding (MoU) Son Joo-Suk, Chief Executive of K-Petro, said his outfit was very much committed to details in the document, and everything would be done to ensure the quality of petroleum products distributed to consumers were of the best quality.
“We are committed to contributing to climate change and this signing is another demonstration of our commitment,” he said.
“Moreover, as the world has adopted Paris agreement, I wish today’s MoU will also lead to global goal of reducing gas emission”
According to him, his outfit will cooperate further with NPA in interchanging petroleum resources and information technology to enhance the activities of both agencies.
On his part, Mr. Tampuli said improving the petroleum quality and distribution systems were critical to the operations in the downstream sector.
“Collaborating with K-Petro will ensure petroleum products consume by the public are of the highest quality” he said.
Energy Ministry armed to respond to IMANI Ghana’s claim of Ghana losing $30b oil find
Energy Minister, John-Peter Amewu
The Ministry of Energy is expected to hold a press conference tomorrow, Friday, 26th April, 2019, to respond to claims by IMANI-Ghana that the country would lose a colossal US$30 billion oil find to Norwegian oil firm Aker Energy, if government fails to act quickly.
The presser is intended to respond to IMANI Ghana’s threat of going to court, should government fail to respond to a letter it sent to the sector Ministry, seeking clarity over the Aker Energy petroleum agreement.
Early this year, Aker Energy announced the discovery of oil in the Pecan South-1A well in the Deepwater Tano Cape Three Points (DWT/CTP) block offshore Ghana.
The find, which is touted as the biggest oil find in Africa, is estimated at 450 million to 550 million barrels.
But speaking at a forum in Accra Thursday, 25th April, 2019, Vice President of IMANI-Ghana, Kofi Bentil argued strongly that the find being claimed by Aker Energy is without a legal basis.
Aker Energy acquired the 51% stake in an earlier well in the area found by another Norwegian company, Hess Oil.
Hess Oil operated under a Petroleum Agreement with the Government of Ghana signed in 2006, which granted the company seven years within which to undertake oil exploration in a given area, the Contract Area.
This Exploration Period ended in 2013.
Kofi Bentil argued by the laws governing oil exploration and production in Ghana that, any oil find made outside of the exploration period could not be claimed by the company that found it, saying, “It belongs to the state.”
He said, Aker Energy, after having inherited the well from Hess Oil at a time the exploration period had ended, was not permitted by law to continue any exploratory activities.
He warned that IMANI Ghana would be compelled to go to court to seek clarity on the matter if government failed.
IMANI fears Ghana may lose $30 billion oil find to Aker Energy
Vice President of IMANI-Ghana, Mr Kofi Bentil
Ghana’s Policy Think Thank, IMANI Ghana, has expressed fears that Ghana could lose about US$ 30billion oil find to a Norwegian oil firm Aker Energy if government fails to act quickly to protect the interest of the state.
Early in the year, Aker Energy announced the discovery of oil in the Pecan South-1A well in the Deepwater Tano Cape Three Points (DWT/CTP) block offshore Ghana.
The find which is touted as the biggest oil find in Africa is estimated at 450 million to 550 million barrels.
Speaking at a forum in Accra Thursday, 25th April, 2019 Vice-President of IMANI-Ghana, Kofi Bentil argued forcefully that the find is being claimed by Aker Energy without a legal basis.
Aker Energy acquired the 51% stake in an earlier well in the area found by another Norwegian company Hess Oil.
Hess Oil operated under a Petroleum Agreement with the government of Ghana signed in 2006 which granted the company seven years within which to undertake oil exploration in a given area, the Contract Area.
This Exploration Period ended in 2013.
Kofi Bentil argues by the laws governing oil exploration and production in Ghana, any oil find made outside of the exploration period cannot be claimed by the company that found it – it belongs to the state.
In fact, he said, Aker Energy, having inherited the well from Hess oil at a time the exploration period had ended, was not permitted by law to continue any exploratory activities.
They were only required to do appraisal work on the Pecan find made by its predecessor company – Hess Oil.
Why were they permitted to engage in exploration in flagrant violation of the laws? Kofi Bentil wondered.
Assuming that Aker Energy accidentally stumbled on a new well in the course of the appraisal, it was legally obligated to announce this to the government for a negotiation on who controls what stake.
Kofi Bentil said that has not happened in this case.
Instead, he said, the company has claimed the new wells as though they formed part of the stake acquired from Hess Oil.
He emphasized the new wells could not be said to be part of the original well because an assessment showed that there is no dynamic communication between the new wells and the existing one. Dynamic communication is the basis for determining whether an oil find is independent of an existing one.
Plan of Development
Kofi Bentil read copiously, documents suggesting that Aker Energy has submitted to the government its Plan Development in respect of the new wells.
By law, the Minister of Energy is expected to assess that Plan of Development (PoD) and either disagree or endorse it.
Where the minister fails to respond in 30 days, the proposals submitted by the company are deemed as accepted.
The IMANI Vice-President said by Friday, April 26, 2019, if the Energy Minister John Peter Amewu fails to respond – the Petroleum Commission has advised him to – the $30 billion oil find would become the sole property of Aker Energy.
He does not understand why the ministry appears to be lax while the country stands on the cusp of losing a resource that rightfully belongs to the people of Ghana.
Appropriation of working area
The two new oil wells are not the only resources Aker Energy is claiming ownership of.
According to Mr Bentil, in clear violation of the laws, the company has refused to relinquish the rest of the contract area back to the state.
In fact, the company has claimed the 30% relinquished by Hess before its stake was acquired by Aker Energy.
The company has actually indicated it will continue to explore for oil in the Deepwater Cape Three Point/Tano South area.
This is in spite of the fact that there is no petroleum agreement permitting it to continue conducting any exploration.
Kofi Bentil insists that having made a find and having conducted appraisal of the wells, the remaining parts of the Pecan field should have been relinquished.
Potential conflict of interest
IMANI is concerned that Aker Energy may be disregarding Ghana’s laws because it is politically connected.
One of the original partners of its predecessor company, Fueltrade Ghana Ltd., is owned by the Chief Executive of Ghana National Petroleum Corporation (GNPC), he said.
Kofi Bentil said if this interest still obtains, the position of Dr K.K. Sarpong as head of GNPC which is the government’s chief negotiator on oil matters, raises questions.
While maintaining that IMANI is not interested in making allegations and accusing people of wrongdoing, he insisted the government must protect the national interest by claiming its share of the newly discovered oil wells.
He is surprised that government did not pay the $140 million it was required to pay to retain a stake in the Pecan well.
“Ghana needs the money,” he said, “God knows we need it so government must act quickly and claim it.”
Tutu Agyare leaves Tullow today; Khama, Sangudi appointed
Tullow Ghana has announced the appointment of Sheila Khama and Genevieve Sangudi as Non-Executive Directors with effect from Friday, 26 April 2019 following the resignation of Mr Tutu Agyare as a Non-Executive Director.
Mr Agyare will officially resign after the company’s Annual General Meeting (AGM) today, Thursday, 25 April 2019. Mr Agyare joined Tullow in 2010 as a Non-Executive Director and has been a member of several Board committees, including chairing the Remuneration Committee for the past two years. “Both Sheila and Genevieve will stand for re-election to the Board at the 2020 AGM,” a statement said. Sheila Khama is a policy adviser on the mineral, oil and gas industries at the World Bank in Washington focusing on host government relations with commercial companies. She also represents the bank as an observer on the International Board of the EITI. Ms Khama took up her position at the World Bank in 2016 having worked in a similar role for three years at the African Development Bank. Earlier in her career, Shelia spent eight years with Anglo-American in Botswana as their Corporate Secretary before joining De Beers as their CEO in Botswana for five years until 2010. Sheila was educated in Botswana before obtaining an MBA from Edinburgh University. Upon appointment, Sheila will join the Environment, Health and Safety Committee. Genevieve Sangudi is a Managing Director for The Carlyle Group based in South Africa. She has over 15 years of investment experience in Africa in the healthcare, financial services, oil & gas, petrochemicals, agribusiness and telecommunications sectors. Ms Sangudi joined Carlyle in 2011 and played a lead role in launching Carlyle’s maiden sub-Saharan Africa fund, including fundraising, strategy, origination and execution. Prior to joining Carlyle, Genevieve was a Partner and Managing Director with Emerging Capital Partners where she established and managed the firm’s Nigeria operations. Genevieve started her career in business development at Procter & Gamble in Boston. Genevieve received an MBA from Columbia Business School, a Masters in International Affairs from Columbia University School of International and Public Affairs and a B.A. from Macalester College. Upon appointment, Genevieve will join the Remuneration and Audit Committees. Tullow ahead of the AGM also noted that the Board will be asking Tullow shareholders to approve the Group’s first dividend payment since 2014. “This 2018 final dividend and our new dividend policy, which is expected to deliver at least $100 million per year to shareholders, reflect the financial and operational progress that Tullow has made over the past few years. Oil production from our West African portfolio is currently running at 95,000 bopd after a short-term production issue in the first quarter and is due to grow in the second half of the year and beyond,” the statement noted.
Tullow Oil cuts 2019 output guidance
Tullow Oil downgraded its 2019 output guidance to 90,000-98,000 barrels of oil per day (bpd) due to problems at its Ghana fields and sees final go-aheads for its Uganda in the second half while its Kenya project timeline was “ambitious”.
“(Ghana) performance was below expectations due to gas compression constraints on Jubilee during February and a delay in completing the Enyenra-10 production well at the TEN field. Both issues have now been resolved,” Tullow said on Thursday.
It had previously expected to produce between 93,000 and 101,000 bpd.
“The ~3 percent reduction in 2019 net production guidance provides a headline, but should not concern investors in our view,” Barclays said in a note.
With much focus on Tullow’s three-well drilling programme offshore Guyana, this year is also crunch time for Tullow’s East African projects.
Final investment decisions for its Ugandan project had been planned around mid-year and Kenya by the end of the year, which Tullow called “an ambitious target” on Thursday.
The shipment of a first cargo of Kenyan oil to test the market, which was originally planned in the first half as well, is expected to sail in the third quarter, Tullow said.
In Uganda, a $208 million payment after selling a stake in its onshore fields to Total in a so-called farm-down deal was delayed last year because the country asked for more tax on the deal than expected.
“These discussions are expected to conclude shortly and will enable completion of the farm-down,” Tullow said.
It has reduced its debt from $3.1 billion at the end of 2018 to $3 billion at the end of March.
It has hedged 56,000 bpd this year at a floor price of $56.40 per barrel and 31,000 bpd at $58.68 a barrel for 2020.