Parliament’s Joint Committee on Energy and Finance has recommended approval of the government’s request for a loan to enable Ghana National Petroleum Corporation (GNPC) acquire a 37% stake in Aker Energy and a 70% stake in AGM Petroleum’s oil blocks. 

According to the Committee, the decision, which was agreed to by consensus, was arrived at after members diligently analysed the risks and benefits of the transaction as presented by the Ministries of Energy/Finance and GNPC.

In the report, the Committee slashed down the amount requested by the government from $1.65 billion to $1.45 billion. 

The Committee also gave the green light for the Finance and Energy Ministers to negotiate and agree on the purchase price with Aker and AGM. 

This follows a request by Energy Minister, Dr Mathew Opoku Prempeh, to Parliament to allow the Ghana National Petroleum Corporation (GNPC) to purchase stakes in Aker Energy’s oil block and in AGM Petroleum’s oil block.

Parliament's Energy and Finance Committees recommend purchase of stakes in Aker Energy, AGM oil blocks

The request before parliament revealed the GNPC through GNPC Exploration and Production Company Limited (GNPC Explorco) wants to buy 37% stake in Deep Water Tano/Cape Three Points (DWT/CTP) operated by Aker Energy Ghana Limited and 70% stake in the South Deep Water Tano (SDWT) operated by AGM Petroleum Ghana Limited.

The Joint Committee urged Parliament to adopt the report and approve the transaction, adding that, “the terms and conditions of the loan for the acquisition of the shares shall be brought to Parliament for consideration pursuant to Article 181 of the Constitution.”

“The Petroleum Agreement (PA) between GNPC Explorco and Aker Energy/AGM shall be laid in Parliament for consideration pursuant to Article 268 of the Constitution and Petroleum (Exploration and Production) Act, 2016 (Act 919),” parts of the report reads.

Parliament's Energy and Finance Committees recommend purchase of stakes in Aker Energy, AGM oil blocks

The state oil exploration firm argued that entering such a partnership with the two entities is critical because prevailing situations such as the exiting of major oil companies from the country required that it builds its capacity and take up a large part of the exploration activities before Ghana’s oil reserves hits a level of terminal decline.

Within four to five years, GNPC believes that the partnership will help the country produce an extra 200,000 barrels of crude oil.

The recommendation is despite a petition from civil society organisations in the oil and gas sector to the Speaker of Parliament raising red flags about the deal.

Meanwhile, the House is expected to debate and approve the Committee’s report later.