Energy think tank fingers GNPC in AGM Agreement

Africa Centre for Energy Policy (ACEP), energy and research think-tank has questioned the purported legitimacy and propriety of the Ghana National Petroleum Corporation (GNPC) agreement with the AGM Petroleum Ghana Limited for its genuineness.

The ACEP is worried that the choice of the Joint Operating Partners and the Petroleum Agreements GNPC negotiated on behalf of the country with AGM Petroleum Ghana “stinks badly and must not be allowed to pass without serious Parliamentary scrutiny.

This is contained in a statement signed by Mr Mohammed Adam Amin, Executive Director of ACEP over the weekend.

It alleges that the AGM Petroleum Ghana Limited is an unknown Company in the global oil and gas industry and especially with no upstream experience.

“Our investigations shows that AGM Petroleum Ghana firm has no evidential record of raising as much capital as may be required for exploring and developing of Ghana’s deposit oil block (South Deep Tano block of about 3,000 metres depth) and again ill-experienced in deepwater exploration,” it said.

The statement said ACEP is worried that the technical partners and financing plan behind this deal considering that major partners in the joint venture, the GNPC, is unable to raise such a colossal capital requirement for this operation as confirmed by GNPC itself, citing its lack of security and control over its carried and participating interests in the Jubilee project.

The think tank is also worried the country could be shortchanged by the potential abuse of “Ghanaian Company” principle to justify a patronage system in the oil and gas industry- as a company becomes Ghanaian, if it is incorporated in Ghana and with a minimum of 51 percent ownership is held as such.

The statement therefore challenges the qualification of AGM Petroleum Ghana as a Ghanaian company as checks have revealed that AGM Petroleum Ghana is wholly owned by AGM Gibraltar and is also identified as a daughter company of Minexco Petroleum, all foreign entities.

It fingered government for its impatience in rushing to negotiate this agreement in six months under circumstances that could give rise to abuse of processes side-stepping the application of open and competitive bidding process as prescribed in the new Petroleum (Exploration and Production) Bill to be passed soon.

The statement called on Parliament to thoroughly examine the Petroleum agreement when it appears for business in the House, urging them to check the beneficial owners of AGM Petroleum Ghana Limited and the financial and technical capacities of the Companies in this agreement.

It further suggested scrutiny of the role of GNPC in the negotiation, the role of the Petroleum Commission in processing the agreement and circumstances leading to its approval by Cabinet.

“ACEP entreats Parliament to publish the agreement approved by Cabinet, when it is laid before it and invite public memoranda to help scrutinise the agreement and ensure the country’s interest is protected and the industry not subjected to costly experimentation.”

It called on government to place the Petroleum Bill before Parliament for expeditious considerations and passage.

The statement however commended GNPC for outdooring its exploration and production subsidiary, EXPLORCO in the Petroleum agreement over the South Deepwater Tano Block negotiated between GNPC, its subsidiary and the AGM Petroleum Ghana Limited.