News of efforts by the Energy Ministry to get Parliament to give them, along with the Ministry of Finance the mandate to agree on a purchase price with Aker Energy and AGM, in connection with plans by the Ghana National Petroleum Corporation (GNPC) to acquire stakes in the two oil and gas companies, has generated a lot of commentary with many calling for a re-evaluation of the objectives of GNPC in relation to the deal.
For many, the story of Aker Energy in Ghana starts with the $100 million deal to buy Hess Corporation’s business in Ghana in 2018, after its initial foray into the oil and gas space in Ghana in 2008 proved unsuccessful.
Pursuant to a Sales and Purchase Agreement dated 16th February 2018 however, Aker acquired all the shares in Hess (Ghana) Limited, and became the sole owner of Hess Ghana Exploration Limited.
The transaction was approved by the GNPC on 12th April 2018 and by the Minister for Energy on 21st May 2018.
Thus, Aker took over the Deepwater Tano Petroleum Agreement from Hess Ghana Exploration Limited, and Hess Ghana Exploration Limited was later re-named Aker Energy Ghana Limited.
At the time of the agreement, the ultra-Deepwater Tano Cape Three Points block was believed to hold an estimated 550 million barrels of oil equivalent and had the potential for a further 400 million barrels.
After some renegotiations, the ownership structure of the block changed with Ghana’s carried, participating and commercial interests dropping from over 40% to under 20%, a development which led to serious agitation at the time.
But 3 years down the line, Ghana’s Energy Ministry on the back of concerns with the global shift from fossil fuels to renewable energy, dwindling investments by oil majors in fossil fuels, as well as a need to ensure that the exploration and production capacity of GNPC is built up for it to be independent in case oil majors pull out of Ghana, submitted a parliamentary memorandum, requesting the house to give them, along with the Ministry of Finance the mandate to agree on a purchase price with Aker Energy and AGM, in connection with plans by the Ghana National Petroleum Corporation (GNPC) to increase its stakes in the two oil and gas companies to 37% and 70% respectively. The memorandum also speaks of government providing a loan of about $1.65 billion to GNPC Explorco to facilitate the deals.
Civil Society Organizations in the country have been up in arms over the requests of the Energy Ministry, calling into question the value assigned to the oil fields in question, the costs incurred on the blocks so far among others.
Duncan Amoah is the Executive Secretary of the Chamber of Petroleum Consumers (COPEC), a member of the Alliance of CSOs working on Extractives, Anti-Corruption and Good Governance, and he explains the grievances of the CSO’s and the way forward.
“The CSOs’ platform is essentially not against the GNPC becoming an oil operator. We are only asking at what cost, or at what investment option. The agreement in the form and manner we have seen doesn’t give hope and confidence that Ghana could get value for money. We say this on the back of the fact that the AGM wells are not appraised to determine how much oil is in there, and yet GNPC is going ahead to negotiate for 70% stake in AGM wells. That is not only risky, but is quite a careless kind of investment to make at this time when the west is looking to ban fossil fuels, particularly diesel.”
“And so we are saying that whatever investments that we are putting in it should be adequately informed, it should be value for money backed, and whatever we need to do as a country to ensure that our negotiations come out as Ghanaians expect it, we should do it. Putting $1.1 to $1.6 billion as equity and not becoming an operator for some of us is a lot more risky than possibly going out there to do your own exploration and determining what to do with the oil under the ground,” he added.