The Alliance of CSOs Working on Extractives, Anti-Corruption and Good Governance says some lapses encountered during government’s ongoing transaction to acquire stakes in some oil blocks were avoidable.
Ghana National Petroleum Corporation (GNPC) has decided to acquire 70% stake in the South Deep Water Tano (SDWT/CTP) and another 37% stake in the Deep Water Tano/Cape Three Points (DWT/CTP).
The SDWT/CTP is operated by AGM Petroleum Ghana Limited while the DWT/CTP is operated by Aker Energy Ghana Limited.
The CSOs insist the $1.6 billion deal threatens Ghana’s economic and fiscal outlook while raising red flags about the arrangement in terms of valuation.
They have pointed out other transactional and policy issues which may leave the GNPC with overpriced assets on its balance sheet, if not addressed properly.
However, the CSOs say they have been left out of the loop as all demands for transparency from the GNPC have been disregarded.
On August 9, 2021, a Russian energy company, Lukoil wrote to the Energy Minister that it “has not been aware of and engaged in discussions of its partners to sell the stake and change the operatorship.”
According to Lukoil, even though it is a main partner in the DWT/CTP project, with a 38% license interest and a 42.22% participating interest, it was not consulted at any point of the latest transaction.
“Lukoil reserves all of its rights under the Petroleum Agreement dated February 8, 2006 and JOA, and at law in respect of the DWT/CTP project. Nothing in this letter shall be deemed as an admission, waiver and/ or concession by Lukoil,” the Russian company said.
The Energy Ministry, in response, said the transaction is still in its early stages and will engage Lukoil “at the appropriate time” to iron matters out.
But the CSOs see this as a result of the Energy Ministry and GNPC’s refusal to seek their input.
A letter signed by Convenor for the Alliance of CSOs Working on Extractives, Anti-Corruption and Good Governance, Yao Graham, explained that “if Parliament had paid attention to our modest appeal, they would have saved the sector Minister the embarrassing letter from Lukoil to the effect that they were not even aware that such a major change to the shareholding and operatorship of the block was happening on their blind side.”
“These are the kinds of practices that kill confidence in the sector and must not be tolerated,” the CSOs added.
The September 23 statement further indicated that the CSOs’ continuous willingness to engage despite what they describe as “deliberate attacks in the media.”
They say these attacks have been further received “subsequent endorsement from the Chief Executive Officer (CEO) of GNPC in his round of interviews.”
“This deliberate exclusion can only be interpreted as indicative of GNPC’s discomfort with a direct and principled engagement with a group of citizens asking serious questions about the propriety and fiscal implications of its intended transaction.”
However, in the letter to Parliament, the Alliance provide responses to “misrepresentations and distortion of facts by GNPC on the specific issues regarding the proposed transaction, which the Corporation has been unwilling to engage the public on but sought to engage your good office clandestinely without copying us.”
The letter, which was also copied to the IMF, World Bank and the Norwegian Embassy, reiterated their concerns over the valuation, cost, significance among others.
Read the CSOs’ full statement below:
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