The Minority in Parliament wants the Nana Akufo-Addo government to withdraw from Parliament, a deal to surrender of 58% of its petroleum interest to a Norwegian interest, AKER Energy Ltd.
Insisting the deal is not in the national interest, the NDC MPs say, will see Ghana lose $10bn to AKER Energy.
Both AKER and AGM are working to explore and exploit Ghana’s oil resources inside the Deep Water Tano South Block.
Photo:Ghana s Offshore Activity Map Source: Ghana Petroleum Commission
The John Mahama government first entered into an agreement with AGM Petroleum in 2013 but not without calls by ACEP to have the deal suspended.
But government has explained, a review has become necessary because Petrica Holding AS in 2018, acquired some shares in its parent company, AGM Petroleum and also owns Aker Energy.
In effect, the two petroleum exploration and production companies linked to one company, are working in the same area of oil wells about 3,000 meters into the sea.
AGM’s request for a review is expected to maximise resources in finding oil in commercial quantities.
But under the Akufo-Addo government, a reviewed deal is expected to see a drop in Ghana’s royalties from 43% to 18%, the Minority has compared the benefits structure between the two administrations.
“You are all students of arithmetic. Who secures a better national interest,” the Minority leader Haruna Iddrisu quizzed at a press conference, Friday.
The NDC Leader in Parliament indicated he is even more surprised that as the prospects in the Deep Water Tano South Block grows “brighter and greater”, government’s interest grows dimmer and smaller.
He called it a “mind-boggling transfer of benefits” and expressed disgust at what he saw as a government desirous of bending over backward to “excite” foreign interests.
The Minority MPs also target a party in the deal, Quad Petroleum which is to be given five percent stake in the oil block under the new agreement. Quad Petroleum is the local content partner in the AGM deal under review.
”Who is benefiting from this 5% local content,” Haruna Iddrisu demanded to know. The company, the Minority found, only came into existence barely a month ago, incorporated on April 10, 2019.
Haruna Iddrisu branded the agreement a shameful reduction of Ghana’s interest and a “complete sell-off”.
The Tamale South National Democratic Congress (NDC) MP while calling on government to withdraw the deal, also condemned government’s “indecent haste” in pushing the agreement through Parliament after recalling MPs from the Easter break.
He said, Ghana’s supreme interest could be sacrificed if MPs are given a week to scruntise a petroleum agreement that promises huge financial benefits or portends great harm to the country’s interests.
Mr. Mohammed Amin Adams, who was Executive Director at the African Center for Energy Policy (ACEP) which opposed the AGM Petroluem deal in 2013, is a deputy Energy Minister as the reviewed AGM agreement comes up for a debate in Parliament.
Parliament’s Mines and Energy Committee has recommended MPs approve the deal despite the lack of endorsement of Minority MPs on the committee.
The governing New Patriotic Party’s (NPP) MP for Tarkwa-Nsuaem constituency in the Western region who is also the Vice-Chairman of the committee, George Mireku Duker has, however, defended the agreement claiming Ghana will earn up to 5% more stake in the oil block if the re-negotiated deal is approved.
He rejected the Minority’s claim that the state will lose up to $10bn in the reviewed royalties and interest regime. The NPP MP described it as “voodoo mathematics.”
Photo:George Mireku Duker is NPP MP for Tarkwa-Nsuaem constituency in the Western region
The NPP MP picked one aspect of the royalties regime – the GNPC carried interest – which he said has been reviewed from 10% to 15%.
But another aspect of the regime also shows GNPC’s additional interest has been moved from 15% to 3%.
A partner in the AGM agreement, Explorco, used to have 24% interest but is now zero under the reviewed deal. The Vice-Chairman explained, having 24% requires GNPC to cough up huge monies to invest in the exploration.
He said GNPC as a partner in the exploration agreement may have to borrow huge monies to invest in the venture.
The NPP MP explained, this was to limit Ghana’s exposure if exploration is unsuccessful. “If you go and borrow and you hit a dry well, it will affect the nation…so why do you risk it?”
He explained the reviewed deal is to minimise Ghanaian risk and maximise areas with more certain rewards such as local content which is reviewed from 2% to 5% under the new proposal before Parliament.
Backing the involvement of Quad Petroleum, its capacity and its recent incorporation, the NPP MP stated “my concern is not the time the company was formed. My concern is whether any law has been breached.”
Despite concerns that the local company lacks capacity, the NPP MP insisted he “will not ridicule any Ghanaian company.”
Although he expressed excitement about the involvement of a Ghanaian company, he was unwilling to reveal on radio, the owners of this company.