QP Takes Stake of ENI Block Offshore Mozambique
Government aims at 100% power penetration – Peter Amewu
Minister of Energy, John Peter Amewu, says the government is aiming at 100 percent electricity penetration and to also ensure that there is affordability. Currently, about 83 percent of the population have access to power. He added that a lot would be needed to be done to achieve the goal of universal access. He was speaking at a forum on Power Purchase Agreements (PPAs) in the oil and gas sector which was organized by the American Chamber of Commerce Ghana (AmCham). The Minister put the nation’s power demand at 2,600 megawatts and said it was presently generating close to 5,000 megawatts. Ghana was paying between US$30 million and US$35 million for the excess capacity.
By year 2020, this could reach in excess of US$400 million per annum, and this, he said, gave cause to worry. There was a higher capacity and higher excess charges and that was why no PPAs were going to be signed. He announced that 11 of the PPAs had been put on hold and that other producers were also taking another look at their rates. Mr Amewu underlined the government’s unswerving determination to ensure that there was transparency in the oil and gas industry.
Government aims at 100% power penetration – Peter Amewu
John-Peter Amewu, Minister for Energy
Minister of Energy, John Peter Amewu, says the government is aiming at 100 percent electricity penetration and to also ensure that there is affordability.
Currently, about 83 percent of the population have access to power. He added that a lot would be needed to be done to achieve the goal of universal access. He was speaking at a forum on Power Purchase Agreements (PPAs) in the oil and gas sector which was organized by the American Chamber of Commerce Ghana (AmCham). The Minister put the nation’s power demand at 2,600 megawatts and said it was presently generating close to 5,000 megawatts. Ghana was paying between US$30 million and US$35 million for the excess capacity. By year 2020, this could reach in excess of US$400 million per annum, and this, he said, gave cause to worry. There was a higher capacity and higher excess charges and that was why no PPAs were going to be signed. He announced that 11 of the PPAs had been put on hold and that other producers were also taking another look at their rates. Mr Amewu underlined the government’s unswerving determination to ensure that there was transparency in the oil and gas industry.
LPG Cylinder Re-circulation Model will guarantee our safety – Dr Amin
Deputy Minister for Energy in-charge of Petroleum, Dr Mohammed Amin Adam, is urging Ghanaians to embrace the changes government is introducing in the LPG distribution and marketing in the country, saying the new policy seeks to protect lives and property. It will, additionally, create more jobs as compared to the current model. He explained that the current model where consumers send their empty LPG cylinders to refilling stations to get it refilled is not the best. He argued that it had become necessary to implement the Cylinder Re-circulation Model (CRM) policy, which seeks to introduce innovation in handling LPG due to the numerous gas explosions which has destroyed many lives and properties. He explained that the CRM policy would lead to the establishment of LPG bottling plants where cylinders would be refilled and distributed to distribution points. Customers would, therefore, have to go there with their empty cylinders to exchange for a filled one. Speaking at a stakeholders engagement at the NPA head office in Accra, Dr. Amin Adam noted that the decision to introduce CRM was tough and difficult one but government had to do it in the interest of the safety of the citizens. “Change is difficult and people do not readily accept, but change is a necessity. It brings value. Change will bring innovation and change, if it is positive, will bring improvement in our lives. “And so when you have changed, that is not intended to destroy but to innovate, to reform and get things better. I want to appeal to all of you that you must accept the change for our good and the betterment of our children,” he said. Dr. Amin Adam also disclosed that the first bottling plant is expected to be in operation this year, insisting that safety remains a major component in the policy. The National Petroleum Authority (NPA), the downstream regulator, has been soliciting the inputs of members of the public at various forums in some parts of the country. So far, the NPA has engaged with the Asantehene Otumfuo Osei Tutu, Members of the Council of State, residents of Nima and Maamobi, Sunyani and Koforidua, as well as the media. The Chief Executive of NPA, Hassan Tampuli, said the policy gives room for enormous job opportunities in several key areas. He maintained that the policy will provide jobs for between 4,000 ad 4,500 people. “There will also be a number of indirect jobs created for installations, maintenance, fabrication and other services. New investment opportunities such as bottling companies, bottle transportation, manufacturing of cylinders and cylinder re-distributors will also be available for grabs.” Mr. Tampuli said the policy would be fully implemented and assured stakeholders there would be no turning back. “The relevant licences will be issued and safety protocols will be keenly observed to ensure the safety of the good people of Ghana, while increasing access to LPG for domestic, commercial and industrial use from the current 25% level to 50% by 2030.” On her part, the Second Lady, Samira Bawumia, expressed her commitment to the policy and promised to advocate for its implementation. “The CRM will go a long way to encourage the safe use of LPG in domestic, commercial and industrial places. Under the new policy, LPG Marketing Companies (LPGMC) will ensure that the cylinders are in good condition before they are handed over to the end user.” According to her, using LPG product should not result in the lost of lives.
$735 million VRA’s debt is seriously affecting our operations – Ghana Gas
The Ghana National Gas Company (Ghana Gas) has expressed worry over the inability of the Volta River Authority(VRA) in paying for the gas supplies, which has accumulated, to a whopping US$735 million.
The situation, according to the Ghana Gas, is having a toll on its finances, thereby, compelling them to even borrow from banks in order be able to undertake some infrastructural projects.
The Chief Finance Officer at Ghana Gas, Mr Emmanuel Essel, made this known at a press briefing to inform the public about developments in the Ghana Gas company.
“We do give VRA Lean Gas for power production and so it is expected that we will receive monies for the supplies that we give them for power production.
“Unfortunately, over the years payment has not been forthcoming. Sometimes last year we were able to make an arrangement with them where they were paying US$3 million. They started payment from April but ceased in October. And so altogether last year we received US$20million as against the US$30 million we give them every month,” he said.
Mr. Essel noted that per their records VRA as at last year is owing Ghana Gas to the tune of US $735 million.
“At the end of last year we have recorded a debt US$ 735 million that would have been higher but for the intervention of Ministry of Finance by taking a bit around US$230 million through a balance sheet restructuring exercise,” Mr Essel noted.
According to him, some discussions are currently ongoing at the Board level to see how the debt can be restructured to enable VRA to be able pay their debt.
Difficulties
Touching on how the situation is affecting the operations of the company, Mr Essel said: “it is a tough one for us in terms of finances.
” You are aware that as a young organization we have to embark on a number of capital expenditures to be able to grow the company. Unfortunately, we have to rely on external borrowing to fund our capital expenditure projects.
Eskom clamps down on criminal activity
South Afican utility company, Eskom, has focused efforts on the removal of illegal connections, conducting meter audits, repairing faulty or tampered meters and, of critical importance, curbing the illegal selling of prepaid electricity vouchers, or ghost vending as it is commonly known.
While more still needs to be done, notable strides are being made. Late last year, a joint operation between the Hawks, Eskom and the Asset Forfeiture Unit, resulted in the confiscation of two illegal pre-paid credit dispensing units (CDUs) from a residential estate in Pretoria.
“The investigation on the matter is ongoing and we anticipate making a further breakthrough and successful criminal prosecutions,” said Advocate Karen Pillay, Acting General Manager for Eskom’s Security Division.
“Eskom would like to remind consumers that buying illegal electricity vouchers is a crime and a punishable offence. Those found using illegal prepaid electricity vouchers could face disconnection, fines and even legal prosecution,” added Pillay.
South Africa loses about R20 billion a year due to electricity theft in the form of illegal connections, non-payment of accounts, meter tampering, meter bypassing and ghost vending.
Don’t approve GNPC’s $ 43m CSR budget for 2019-ACEP tells Parliament
The Africa Centre for Energy Policy (ACEP) is urging Ghana’s Parliament not to approve about US$43 million Ghana National Petroleum Corporation(GNPC) has planned to spend on its Corporate Social Responsibility (CSR) in 2019.
The energy think tank is wondering why GNPC is spending $20 million on its operations in the Voltain Basin which is less than 50% of the amount it is blowing on CSR programmes.
“Parliament should not approve any CSR budget for the Corporation until the end of the fifteen-year financing window provided in the PRMA has elapsed. This should free up funds for the Corporation to deliver on its core mandate as an upstream oil player,” ACEP made the recommendation in a detailed report that analysed the GNPC’s work programme for the 2019 financial year, which is currently awaiting parliamentary approval.
GNPC plans to spend $43.05 million on CSR but only $20.3 million on its operations in the Voltaian Basin and its subsidiaries in the sector.
“This is less than 50% of what GNPC wants to spend on CSR. In recent times, the Corporation has become more popular in delivering development projects rather than its core mandate.
“While GNPC, like any corporate entity, has a responsibility towards society, it is unusual for sound corporate organisations to spend more than 10% of its cash flow (not profit) on corporate social responsibility,” ACEP said.
ACEP stated that spending that much on corporate social responsibility gives a cause for concern particularly, when it is juxtaposed against GNPC’s “operations expenditure beyond the traditional cash call on the producing fields.”
“In 2019, GNPC proposes to spend $20.3 million on its operations in the Voltaian Basin and its subsidiaries in the sector. This is less than 50% of what GNPC wants to spend on CSR,” the energy policy think tank stated.
ACEP noted that GNPC in recent times has become more popular in delivering development projects rather than its core mandate.
ACEP in its analysis said the CSR budget of the Corporation represents 2819%, 270%, 240%, 629% of the capital budget of the Ministries of Justice and Attorney General, Energy, Agriculture and Finance respectively.
“In relation to the total budget of the mentioned ministries, GNPC’s CSR budget represents 210%, 254%, 47%, and 65% respectively,” ACEP added.
Turf war at GNPC
GNPC has been in the news in recent times over a seeming turf war between the Chief Executive, Dr. K.K Sarpong and Board Chair, Freddie Blay over the corporation’s procurement functions.
Dr. K. K. Sarpong has been accused of trying to assume the procurement function of the Corporation’s Chief Finance Officer.
But Board Chair of GNPC, Freddie Blay mounted Pressure on Dr. K. K Sarpong, to reverse the decision with immediate effect.
Nana Addo must call K.K. Sarpong, Blay to order – IES
A policy think tank, Institute for Energy Security had also called on President Nana Akufo-Addo to call the Board Chairman and Chief Executive of the Ghana National Petroleum Corporation (GNPC) to order.
The civil society body believes this friction undermines the smooth operations of the national oil company.
The IES Executive Director, Paa Kwasi Anamua-Sakyi who spoke to Citi News, said the troubles at GNPC could affect investment in Ghana and must be resolved as soon as possible.
“It is important that the President who has the power to appoint leading personnel in these functional areas should step in and stop this because it can deter investors and so it is important for the number one gentlemen of the land to make a statement on this and bring these two gentlemen to order,” he added.
NPA inaugurates taskforce to fight fuel smuggling
A joint national taskforce to oversee the export of petroleum products across Ghana’s borders has been inaugurated.
In an effort to curb the menace, the National Petroleum Authority in collaboration with other bodies have initiated measures to conduct swoop-exercises on trucks suspected to be involved in dumping products meant for export into the country.
The joint taskforce comprises the National Petroleum Authority (NPA), Ghana Revenue Authority (GRA), Ministry of Energy, Association of Oil Marketing Companies (AOMC), Bulk Oil Distribution Companies in Ghana (CBOD), and a representative from the security services.
The export guidelines were developed by the NPA to address concerns about malpractices in the export system, which have negatively impacted revenue meant for the state.
Speaking at the inauguration, Esther Anku-Chief Inspector of NPA, said the taskforce is expected to review operational activities of the committee, “as relates to curbing leakages within the current export system.”
She implored members of the committee to work assiduously in order to win the ‘fight’ against the smugglers.
Also, members of the committee will ensure export products are duly dispatched out of the country and in the appropriate order.
The committee is one of several measures the NPA is taking to address the menace of fuel smuggling in the petroleum sector, which has a negative impact on the country’s finances.
It has so far collaborated with state security to effect swoops at various landing beaches, the high seas and border points, where several cartels operating in the petroleum industry used to fuel their operations.
The NPA’s Chief Executive, Hassan Tampuli, reiterated his outfit’s resolve to fight the canker and do everything possible to ensure nothing is left unchanged.
In a meeting with the Chief of Naval Staff, Rear Admiral Seth Amoama at his office, Mr. Tampuli reinforced the NPA’s commitment to assist the security agencies deal with the cartels behind fuel smuggling.
Electricity tariffs already high, no need for upward review – AGI
Ghana’s electricity tariffs are among the highest in West Africa, the Association of Ghana Industries (AGI) has said – noting that any upward adjustment will be detrimental to the fortunes of industry.
While calling for reliable and efficient service delivery, the AGI noted that the imminent takeover of ECG by Meralco Consortium should not bring about an increase in tariffs. It said any tariff adjustment must take into consideration competitiveness of the industry comparative to the sub-region.
“While expecting reliability and efficiency in service delivery and competitive tariffs from the new company to take over operations of the distribution network in southern Ghana, we do recognise the need for a tariff regime that is structured in a manner so the utility service providers can recover cost in order to remain viable,” the AGI said in a communique.
The communique was issued following a recent meeting of the association’s National Council in Accra. It said ongoing discussions on a possible review of electricity tariffs should, therefore, mirror the plight of industry.
More importantly, it argued that a competitive tariff regime will spur existing industries to become competitive in the sub-region while attracting new ones.
The communique further noted that the current arrangement wherein residential consumers are subsidised by industry is counterproductive because it burdens manufacturers and lessens competitiveness.
“The AGI expects that ongoing discussions on review of the electricity tariff should take the competitiveness of Ghanaian industry into account. The Council is of the strongest view that industry should not be made to subsidise residential consumers of electricity as is currently prevailing,” added the communique signed by AGI’s President, Dr. Yaw Adu Gyamfi.
ECG takeover
In August 2014, the government of Ghana signed the Power Compact II with the Millennium Challenge Account (MCC) (MiDA) – an independent United States government agency – on August 5, 2014. And part of the contract was to allow ECG to be managed privately for a period of 20 years.
Pursuant to this, MiDA awarded the operations, investment and management of ECG to Meralco Consortium in April last year, following the completion of an international competitive procurement process and evaluation of the proposals received for the ECG Concession
‘Dangerous’ GNPC turf war’ will hurt economy – IES
The Institute for Energy Security (IES) has said it is alarmed at the complete breakdown of control at the top hierarchy of the Ghana National Petroleum Corporation (GNPC), as evident in the war of words between the Chief Executive Officer (CEO), Dr K.K. Sarpong and the Board Chair, Mr Freddie Blay, over procurement-related issues.
According to the IES, “The turf war is ugly, undesired and greatly undermines the smooth running of Ghana’s oil company, the GNPC.”
The heated misunderstanding between Mr Blay and Dr Sarpong is in connection with the recruitment of a Procurement Manager.
Dr Sarpong, in a letter, accused Mr Blay of overstepping his boundaries by ordering the Chief Finance Officer (CFO) to proceed with the recruitment process without recourse to him (Dr Sarpong) even though the CFO is a subordinate.
Dr Sarpong said he saw the action of Mr Blay as interference and accused him of using his role as the national chairman of the governing New Patriotic Party (NPP) to execute functions at GNPC without recourse to professional standards.
In his response, Mr Blay challenged the CEO on his assertions, insisting that the Board has the authority to recruit officers. He subsequently requested the withdrawal of the letter written by the CEO to the CFO, to affirm the recruitment of the procurement manager.
“It should be clear to you that the Board and not the CEO is the appointing authority. Professionalism, which you refer to in your letter, requires that the CEO of a state-owned entity operate within and respect the law.
“While you must take the initiative, you are legally and professionally obliged to seek approval of the Board for all recruitments and any restructuring,” Mr Blay stated.
He added: “The truth is, under your leadership and watch; our corporation has had no Procurement Manager for so long in spite of several directives from the Board to your office to take the necessary steps to fill that vacancy. This dereliction of duty can simply not continue.
“Playing the blame game, which you are now engaged in, will not pass. The buck stops with you Dr K.K. Sarpong, as the CEO. Please understand and very clearly, that the recent Board directive and two-week ultimatum on this matter was conveyed to the Chief Finance Officer, also in her capacity as Acting CEO, when we held that particular emergency meeting. The ultimatum stands and it is up to you to comply or chose to ignore it.”
The IES, in a statement, said the turf war between the two gentlemen has the potential to weaken Ghana’s negotiation with independent oil companies (IOCs) adding that the wrangling could equally make the GNPC unattractive to potential investors and partners.
The statement further said: “This Boardroom power play is very dangerous to the country’s economy since GNPC’s share of our offshore oil and gas production is a vital component of Ghana’s annual budget.
“One would have thought that the current GNPC Boardroom energy now being displayed publicly and negatively, could have been channelled into meeting the mandate of exploring and producing oil on its own to reduce the reliance on IOCs, so, the country benefits from its petroleum resources.
“For GNPC to meet its mission and vision to be a stand-alone operator in the next few years, its leadership, staff commitments to a common purpose, and internal control system must be apt.
“Procurement irregularities are serious and can lead to possible prosecution, to the extent that such irregularity can lead to causing financial loss to the state, and trust in state enterprises.”
To this end, the IES has called on the Ministry of Energy (MoE), the Public Procurement Authority, and the Attorney General (AG) to look into the possibility of infractions in relation to the functions and mandates of the topmost officials of GNPC, and take a decisive step.
The IES has further called on President Nana Addo Dankwa Akufo-Addo in whom the power to appoint leaders to state institutions is vested, to call the two gentlemen to order to save the country from embarrassment.
KIA Terminal 3 gets $30m oil money – PIAC
About $30 million of the funding required for the construction of the newly built Terminal Three of the Kotoka International Airport (KIA) was sourced from oil revenues.
The figure, which represents 12 per cent of the total funding of the $250 million project, was from the Annual Budget Funding Account’s (ABFA’s) allocation to the Ghana Infrastructure Investment Fund’s (GIIF’s) in 2016. The remaining was sourced from Africa Development Bank and Development Bank of Southern Africa (DBSA).
The Chairman of the Public Interest and Accountability Committee (PIAC), Dr Stephen Manteaw, disclosed this at a workshop by the Institute of Financial and Economic Journalists (IFEJ) and German Development Corporation (GIZ) in Koforidua in the Eastern Region on February 16.
He said the new terminal, which had become a tourist attraction for many travellers, received $30 million allocation from the oil proceeds.
“The newly built terminal three received $30 million from the oil proceeds through GIIF but most Ghanaians were yet to be informed about it. This is in spite of the fact that the facility was opened to the travelling public on September 15, 2018,” he said.
As a result, Dr Manteaw underscored the need for projects developed with oil proceeds to be labelled for Ghanaians to appreciate whether the oil proceeds were being utilised well or not.
“For us, labelling of projects that are being funded by proceeds from oil is critical for Ghanaians to appreciate how their resources are being used,” he said.
Towards that end, he called on the government to provide PIAC with information on all physical infrastructural projects it intended to fund with petroleum revenue this year.
Loan repayment
Checks by the GRAPHIC BUSINESS, however, indicate that the GACL had already started servicing loans secured for the construction of the terminal three with revenue from the airport tax.
The airport tax component is often paid by airlines and their passengers for using the airport facilities.
Asked whether GACL was in a better position to repay the loans, the chairman answered in the affirmative, explaining that he was optimistic that the airport authority would be able to service the loans from the various sources within the shortest possible time.
“Unlike other public institutions, GACL is properly managed without government interference in its day-to-day activities, and so we have confidence that investment used for the project will soon be returned,” he said.
2017 PIAC report
Meanwhile, presenting the 2017 PIAC report in a hall packed with journalists, Dr Manteaw explained that GIIF had so far disbursed $30 million in senior debt as partial funding of GACL’s $400 million planned new terminal building at KIA.
In addition, he said the report identified that the fund has committed to a number of projects across sectors at a cumulative cost of $142 million, bringing the fund’s total investments (including planned investments) to $172.50.
In 2017, GIIF did not invest in any short-term instruments. However, cumulative investments in short-term instruments in 2015 and 2016 stood at $63.2 million at the end of 2017, same as for 2016.
Interest gained for 2017 was GH¢26.8 million, bringing total interest since 2015 to GH¢49.3 million, or $11.2 million.
ABFA disbursements to GIIF
From the 2016 PIAC report, an amount of GH¢77.73 million was unutilised from the ABFA allocation of that year. In 2017, a further GH¢403.74 million was unutilised, bringing total amount brought forward to 2018 to GH¢481.47 million.
In accordance with Section 21 of the Petroleum Revenue Management (Amendment) Act, 2015 (Act 893) and Section 5 (1b) of the Ghana Infrastructure Investment Fund Act, 2014 (Act 877), an amount of $6.9 million (GH¢29.2 million) was transferred to the GIIF.
This amount represented 24 per cent of the capital expenditure component of the 2017 ABFA disbursements, that is GH¢122.1 million. The total ABFA disbursements to the GIIF since 2015 stood at $75.4 million as of the end of 2017.
Karpowership to ease gas evacuation challenges in Western region
The country’s inability to fully utilise the indigenous natural gas from the Sankofa fields has resulted in a monthly forfeiture of what the government says is some $28million to ENI.
This bottleneck, however, would be significantly resolved when Karpowership relocates its 470MW Powership to Takoradi within the second quarter of the year.
Currently stationed at the Tema Fishing Harbour, the 470MW Karadeniz Powership, Osman Khan, can take up to 50percent of the natural gas that ENI Ghana is contracted to produce, Managing Director of Karpowership Ghana Company Limited, Volkan Buyukbicer told the Bft.
The ‘take or pay’ Gas Sale Agreement the country has entered into with ENI and the other partners in the Sankofa project means that the country, being the off-taker, has to pay for some 140 million standard cubic feet per day of gas not only when it utilises it but also when it is unable to, through no fault of the supplier – ENI.
“The take or pay Gas purchase agreement would have cost us US$40 million per month if we failed to take the entire 140 mmscfd. However, we have been taking 60mmscfd in Takoradi for power generation, which has reduced the amount of gas un-utilised to 80mmscfd. Thus, about $28 million is being paid for gas currently not utilised,” the Energy Ministry explained in January, in response to reports that the country was losing US$40million monthly.
It has also been said that relocating the Powership to Takoradi would also save the country from paying millions of dollars as a result of the high transportation cost of WAPCo to convey natural gas from the western region to the Tema Power enclave.
The dual fuel Karpowership floating Powership has been operating on Heavy Fuel Oil so far, and according to Volkan Buyukbicer, its switch to the use of gas, which is much cheaper, would save the country more than $240million on an annual basis.
Besides, running the Powership on gas will result in additional savings to the power off-taker – ECG – and help drive down tariffs for consumers, he added.
The pressure on government to make ready infrastructure to fully evacuate the Sankofa gas is not lost on Karpowership, Mr Buyukbicer said, pledging that his company is fervently preparing their Project site at the Sekondi Naval Base for the transfer of the Powership there, even as government is doing its part towards gas delivery.
“We feel the pressure and we are working very fast to move the Powership there and to off-take the gas concurrently,” he said.
Karadeniz Powership Osman Khan is the largest floating Power Plant in the world and one of 19 Powerships built, owned and operated by the Karadeniz Holding, the parent company of Karpowership Ghana Company Limited.
Karpowership has a power purchase agreement with ECG to generate up to 450MW of electricity for ten years. But its long-term plan is to use Ghana as a “hub” to serve other countries in the West Africa sub-region.
Since it entered Ghana’s energy market in 2015, Karpowership has contributed between 23 and 25percent to power generation in the country, and according to Volkan Buyukbicer, the company sees Ghana “as a long-term partnership.”
In keeping with this long-term outlook, Mr Buyukbicer said the company believes in human capital development, which is why it has chosen to support, on a continuing basis, the education of basic school pupils in various parts of Tema with bursaries and teaching and learning aids.
The company, he added, is very mindful of the country’s localisation agenda and is leaving no stone unturned to fulfil its obligations in that regard.
As such, he said, out-sourcing jobs to local businesses and suppliers where the capacity is available is something that has been doing since its inception,
Asked to comment on the energy market and its capacity to deliver reliable and affordable any to Ghanaians, Mr Buyukbicer underscored the importance of long-term planning which is aligned to the overall industrial development agenda of the country.
14 oil companies invited to submit bids for five oil blocks
The Ministry of Energy has given greenlight for fourteen
(14) companies to submit their bids for the five oil blocks government has offered
for competitive bidding.
The companies were selected after they satisfied the pre-qualification
requirements
This was contained in a statement signed by the Head of Communications and
Public Affairs at the Ministry of Energy, Nana Kofi Damoah.
The statement explained that out of the sixteen companies that put in
application for the five oil blocks one presented a bid for an oil block meant
for GNPC while the other one was disqualified for not meeting pre-qualification
requirements.
“The fourteen companies that have been pre-qualified by the Committee for
the next stage will be invited to submit their bids for the blocks for which
they have been pre-qualified. Deadline for submission of bids will be on May
21, 2019 and the blocks are expected to be awarded to successful bidders in
August 2019,” the statement said.
According to the Ministry, it will write directly to all companies who
submitted documentation for expression of interest and pre-qualification to
inform them of the outcome of the evaluation process.
“We wish to assure all stakeholders that the Ministry will deliver a
transparent licensing round for the good people of Ghana,” it said.
Gas price reduction will make a big difference – Awotwi
Gas is relatively expensive and reducing the price will go a long way to stimulate growth not only among businesses but the country as a whole, the CEO of Tullow Oil, Kweku Andoh Awotwi, has suggested
There have been calls by energy experts for the reduction of gas prices, and Mr. Awotwi reckons those calls are germane.
“It is true that the terminal gas pricing in the country is quite high. I think PURC has a price of US$7-30 a million btu, and that translates to about US$40 a barrel of oil. When you look at other countries, for instance the US, gas price is less than US$3. People ask why it is so expensive, and among the reasons is that it’s tied to infrastructure that was built for the first time; but it is true that gas is relatively more expensive, and it may make a difference when prices are reduced.
“I think there is a challenge between reducing prices and recovering the cost of initial investment, but it could make a difference,” he told B&FT on the margins of the first investiture and induction ceremony of the Chartered Institute of Supply Chain Management (CISCM) Ghana, in Accra on Thursday.
Reports have already indicated that the tariff paid on gas supply for both domestic and industrial use may be going up from March this year, 2019.
This is the result of government’s decision to restrict gas supply from the Jubilee Field due to the coming onstream of gas from the ENI Field.
The restriction follows government’s agreement with ENI to consume the gas to be produced from the Sankofa Field.
The Sankofa Gas produced by ENI is expected to come onstream from March 2019 to produce associated gas for the Ghana Gas Company to power the Karpowership plant.
Ghana has made significant savings and met environmental benchmarks due to the gas sector.
However, it’s faced with structural non-payment issues due to inability to pay for gas supplied by exploration and production companies to the Ghana National Petroleum Company through the Ghana National Gas Company for use by the Volta River Authority and other Independent Power Producers.
Conduct research into innovation
At the CISCM event, he urged supply chain management practitioners to conduct research into integrated supply chains to facilitate policy initiatives of businesses and government.
According to Mr. Awotwi, research and case-studies in the energy, oil and gas sectors will be good starting points, given the vertical integration and upstream-downstream activities in related industries.
He explained: “With restructuring of the energy sector, there are many players in the generation of energy. There are also the distribution companies ECG/NEDCo as well as the National monopoly of the transmission sector.
“To this end, the oil and gas sectors will provide sufficient materials,” he told B&FT in an interview
For Mr. Awotwi, it is not by accident that most of the best-performing companies have established supply chain management systems in the form of business units, directorates, divisions or departments to optimise various interrelated supply chain functions – spanning planning, accounting, finance, sourcing/procurement among others – to add value and recognise the sovereignty of third parties and internal customers.
Leadership plays a crucial role in achieving this objective, he said, maintaining that companies need to establish leadership that initiates action and works with subordinates through effective communication to realize it.
Furthermore, he added, there has to be a leadership that motivates through economic and non-economic rewards to get the work done.
He also noted that the manner in which a company is able to put into practice benefits and minimize the challenges will facilitate the reaping of long-term rewards.
Supply chain business units when properly resourced can bring about cost-efficiency, increase in revenue, quality control and gaining competitive edge, Mr. Awotwi noted.
On his part, the president of CISCM Ghana, Richard Okrah, stated that in the short-term the institute is targeting the energy sector – where with the sector reform policy there are several players in the generation and distribution area.
“These players are providing goods and services to the consumer by involving the natural monopoly in the transmission of energy. We believe there are opportunities to improve service deliverables; and there are other areas such as the medical/pharmaceutical fields where there is a need to examine the supply chains to ensure quality health care and avoid flow of counterfeit drugs.”
The investiture ceremony also saw seven distinguished professionals been inducted as Fellows by CISCM – comprising Prof. Aba Bentil-Andam; Prof. Esther Sakyi-Dawson; Dr. Joseph Siaw-Agyapong; Dr. Theresa Oppong-Beeko; Kweku Andoh Awotwi; Ing. Emmanuel T. Antwi Darkwa; and Joe Ghartey.