IMANI Africa has called on the government to take immediate steps to negotiate the petroleum agreements on new oil deposits that have been discovered by Aker Energy, a Norwegian company, in commercial quantities in Deepwater Tano Cape Three Points (DWT/CTP) block, offshore Ghana.
According to the policy think tank, Ghana risked suffering revenue losses of about $4.8 billion if the agreement with Aker Energy was not renegotiated as a matter of urgency.
Expressing those concerns at a media encounter in Accra yesterday, a senior Vice-President of IMANI, Mr Kofi Bentil, said Aker Energy would short-change the country if key stakeholders failed to apply petroleum laws to the energy company.
Aker Energy acquired the 51 per cent stake in an earlier well in the area found by Hess Oil, another Norwegian company.
Hess Oil operated under a petroleum agreement which the government of Ghana signed in 2006, which granted the company seven years within which to undertake oil exploration in the contract area.
That exploration period, however, ended in 2013.
Aker Energy announced earlier this year that it had discovered commercial quantity of oil in the Pecan well in the DWT/CTP block offshore in the Western Region.
According to the company, initial work done revealed that its Pecan well in the block held an estimated 450 to 550 million barrels of oil.
The company projected that the volume of oil in a plan of development in the next appraisal wells could increase to between 600 and 1,000 barrels of oil.
Mr Bentil argued that although the oil find by Aker Energy had a huge economic potential for the country, due diligence needed to be done to ensure that the ownership of the new oil fields was clearly defined to avoid any rip-off from the company.
He explained that Ghana stood to gain an estimated $9 billion through a 25 to 30 per cent increased equity interest in the long run.
“The law says that if you find new oil outside your exploration period, that new discovery is not for you. Having found the new discovery outside the exploration period, the law requires that they go into negotiations with the government on the new discoveries.
“The Aker oil finds qualify as a new discovery, and they ought to enter into negotiation with the government, but we are not aware that the company has entered into negotiation with the government on the ownership.
Mr Bentil argued that given the fact that the new oil finds constituted additional oil discovered in Aker’s contract area previously held under an old agreement, which lapsed in 2014, the new fields ought to be negotiated as required by law.
“It is our considered view that the additional oil discovered in 2019 are essentially not covered by any of the petroleum agreements (PA) in force, hence those additional finds require a new petroleum agreement [and] should be negotiated under the Petroleum (Exploration and Production) Act, 2016 Act 919,” he said.
Mr Bentil observed that it was interesting that Aker had proceeded to say that “everything they are going to do will be on the old terms they inherited from Hess which were contracted under the old law.”
“They have even written a letter asking for renegotiation of the old agreement to make it more favourable to them, a letter which was rejected by the former Minister of Energy, Mr Boakye Agarko, but which is being considered currently. There is a lot of cause for worry and we ask for a response from our leaders.
Potential conflict of interest
Mr Bentil also said Aker Energy might be disregarding the country’s laws because it was politically connected.
He said, for instance, that one of the original partners of Aker’s predecessor companies, Fueltrade Ghana Limited, was owned by the Chief Executive Officer (CEO) of Ghana National Petroleum Corporation (GNPC), Dr K. K Sarpong.
The position of Dr Sarpong as head of GNPC, which is the government’s chief negotiator on oil matters, raises questions, he said.
He maintained that IMANI was not interested in making allegations and accusing people of wrongdoing.
However, Mr Bentil stressed that the government must protect the national interest by claiming its share of the newly discovered oil wells.
Plan of Development
Mr Bentil was also worried that the Ministry of Energy had still not responded to the plan of development of the DWT/CTP Aker Energy submitted to the government as required by law.
He said by law, the Minister of Energy was expected to assess that Plan of Development and either disagree or endorse it.
“By tomorrow, April 26, 2019, if the Energy Minister John-Peter Amewu fails to respond to the plan of development as the Petroleum Commission has advised him to, the $30 billion oil find will become the sole property of Aker Energy,” he said.
The Director of the Centre for Resources and Environmental Management (CNREM), Dr Solomon Kwawukume, said it was about time the country’s leaders took steps to protect oil and other natural resources.
“In my view, we look dead as a country because we have failed in the fiscal regimes that govern the oil and gas sector,” he said.
He called on all who matter, including the President, Parliament, the media and civil society organisations (CSOs), to play their part to protect oil resources.
Efforts made to get a response from Aker Energy on the issues raised by IMANI were not successful, as an official of the company told the Daily Graphic the company was not in a position to speak to the issues at the moment.
The Daily Graphic, however, learnt that following the press encounter held by IMANI, Aker Energy held a crunch meeting with officials of the Ministry of Energy on the way forward.
A source close to the meeting said the ministry would give an official response to the issues in the coming days.
In a statement issued in Accra yesterday, Dr Sarpong said his attention had been drawn to a press conference by IMANI in which the think tank accused him of conflict of interest in the GNPC’s transaction with Aker Energy in respect of the DWT/CTP block.
“I wish to state emphatically that neither l nor my family own Fuel Trade as claimed by IMANI”.
Consequently, the statement said Dr Sarpong could not be accused of conflict of interest in dealing with Aker Energy as stated by IMANI.
The statement said the Fuel Trade’s two per cent stake in the DWT/CTP block was acquired in 2014 long before Dr Sarpong’s appointment in 2017 as Chief Executive of GNPC.
“It is surprising to me that IMANI, a think tank of its sort, could not carry out due diligence on the ownership of Fuel Trade Limited before arriving at its erroneous conclusion, causing me serious embarrassment and jeopardising my standing in the International business community.
“ No doubt, l have incurred immense economic, political and social cost by IMANI unjustifiable claim.
This, l find unacceptable and hereby demand a retraction of the said claim and an unreserved apology from IMANI and its Deputy Director, Mr Kofi Bentil, within two weeks. The retraction should be given as much prominence as the press conference.
Meanwhile, l reserve my rights to seek legal redress,” the statement said.