…as sister company of Norwegian firm pulls out of deal
The Minority in Parliament have raised a concern regarding the decision by AGM, a sister company of Norway-based AKER Energy, to pull out of the US$1.6billion transaction with the Ghana National Petroleum Corporation (GNPC).
According to the Deputy Minority Leader, Emmanuel Armah Kofi Buah, the circumstances leading to the initial proposal and government’s approval of the deal must be investigated.
He indicated in an engagement with the media that the Minority feels vindicated because they stood against the transaction when the GNPC brought the proposal before Parliament for approval.
He said Ghana would have lost so much money if the transaction had gone through, against their position that the deal, which the GNPC was expected to pay Aker US$1.65billion to acquire a 37 percent stake in the Deepwater Tano/Cape Three Points (DWT/CTP) and 70 percent interest in SDWT, was not valuable.
“They came to say that they want to buy the AKER block for US$1.65billion. We spoke forcefully, and we said that blocks they want to sell to Ghana for US$1billion was valueless and was risky, and that we need to have proper valuation of that asset and to make sure that we have mitigated all the risks. We insisted that we can’t buy it at that price.
“Now, it turns out that a year or two years later, AKER now goes back to say that that block that they wanted to basically dupe Ghana by selling to us for US$1.65billion, they no longer want it and that they have relinquished it. That really vindicates the NDC minority,” he said.
He added: “Can you imagine if we had indeed bought and exchanged money? If we did, then it means that today, we are talking about US$1billion plus that we have paid for an asset that has no value. That is why we believe that whole circumstances leading to AKER’s proposal to sell that block must be investigated”.
In September 2021, Energy Minister Dr. Matthew Opoku-Prempeh was reported to have reiterated government support for the decision by Ghana National Petroleum Corporation (GNPC) to acquire a 70 percent stake in the South Deep Water Tano (SDWT/CTP) and another 37 percent stake in the Deep Water Tano/Cape Three Points (DWT/CTP).
The move, according to him, will not only be about the shares but “more experience in the exploration agenda of GNPC, adding: “The government is going to support you 100 percent”.
A coalition of civil society organisations (CSOs) in the extractive sector had also raised red flags about the deal in terms of valuation, saying the US$1.6billion deal could threaten Ghana’s economy.
The CSOs, in a statement in reaction to a memo presented to Parliament by the energy minister and approved by Cabinet requesting an approval of US$1.65billion blank cheque for the government to finalise negotiations with AKER Energy, stressed that the memo was a significant eye-opener for well-meaning Ghanaians to closely monitor the relationship between AKER and the state.
According to the said memo, US$1.3billion is for acquiring Aker’s interest and US$350million is for the development cost of Pecan phase 1 to first oil.
“GNPC has failed to examine the issues in the transaction properly. The decision to support GNPC to become an operator is not a new conversation. Ten years ago, the country decided to support GNPC to become an operator by allocating a portion of oil revenue. So far, about US$1billion has been given to the corporation, but it has failed to drill one well.
“The country needs a clear pathway for supporting the national oil company, rather than using billions of dollars of the public’s money in risky bets that might instead go to support Ghana’s health, education and economic development. Otherwise, the guise of the energy transition will only be a smokescreen to waste more resources and line the pockets of foreign companies and people who may be short-changing the country deliberately.
“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 opinions. We also urge the media to provide adequate space and time for a thorough examination of the issue in the country’s supreme interest,” the statement noted.