A group of civil society organisations working in the extractive sector and anti-corruption institutions in the Republic of Ghana is calling on the West African nation’s legislative body to probe into planned acquisition of stakes in Aker Energy and AGM Petroleum Ghana oil blocks offshore Ghana by GNPC.
The country’s national oil company, GNPC in a memorandum presented in Parliament, is seeking approval of $1.65 billion to enable GNPC to acquire 70 percent stake in South Deep Water Tano block operated by AGM Petroleum Ghana Limited and 37 percent stake in DWT/CTP operated by Aker Energy Ghana Limited.
The GNPC, in a document presented to Cabinet and sighted by energynewsafrica.com, argued that the decision would be beneficial to the country in the face of energy transition which is curtailing investments in new exploratory activities by International Oil Companies.
However, the group, made up of some 15 civil society groups, are questioning the transaction.
The group, which accused GNPC of failing to examine the issues in the transaction properly, said, “The Memo to Parliament is a significant eye opener for well meaning Ghanaians to closely monitor the relationship between Aker and the State.”
The group said, “After analysing the proposals by GNPC and Government, we are clear in our minds that the transactions, if approved, will short-change Ghana. Therefore, we request Parliament to intervene, given that the deal has gone through all the relevant branches of the Executive, ostensibly glossing over important threats of the transaction to the country’s fiscal situation.”
Click on the link below for GNPC’s document on the proposed transaction
GNPC EMT_Cabinet Presentation v31
Among other questions, the CSOs asked if the agreement between the two institutions was value for money.
“Aker claims it has invested about US$800 million so far on the blocks in a document submitted to Parliament. While GNPC claims it has verified the expenditures, it still appears inflated if juxtaposed against the amount of work done by Aker and the value of its acquisition three years ago. Aker Acquired Hess’s interest in the DWT/CTP for US$100m 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 claims 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.”
It added: “We, therefore, request Parliament to institute a full-scale investigation into the transaction to verify the actual cost incurred by Aker so far on the Blocks, clarify the inconsistencies in the presentations by GNPC and allow for open consultation and hearing to provide opportunities for independent expert. We also urge the media to provide adequate space and time for a thorough examination of the issue in the country’s supreme interest.”
Click on the link below for the full statement of CSOs
FINAL VERSION – Statement on AKER GNPC transaction final