GNPC not for stock market

GNPC is not considering listing on the stock exchange and even if it wanted to it would have to be changed from a corporation to a company, its CEO Alex Mould said in reaction to calls for the state-owned oil company to list on the bourse.

“We are not a company; we are a corporation. For us to be listed we have to, first of all, become a company; and that in itself has its own nuances,” he told the B&FT.

“However, GNPC can form private companies that can be listed on the stock market. For example, if we conclude the purchase of Ghana Gas, which is a private company, it can be put on the stock market. But as a holding company, I do not think GNPC will be put on the stock market. It is an arm for government to do the exploration work, and we will continue to do that,” he said.

The GNPC has said it wants to become “an independent operator in seven years and a world-class operator within fifteen years”.

Some commentators have said the corporation may not be able to achieve these lofty goals if it does not find a way to raise good money, a reason they recommend the stock market.

“GNPC wants to be a stand-alone operator in seven years. What this means is that GNPC should be able to mobilise resources for investment, and have the capacity to behave as an operator that will be able to compete with other operators,” Dr. Mohammed Amin Adam of the African Centre for Energy Policy said at forum recently.

“The question we should ask is: ‘What investment captured on the investment plan will take GNPC to become a stand-alone operator?’ With the kind of capacity and leverage they need to be competitive, I do not see any kind of investment on their plan that would take them to that level. I don’t see it,” he added.

Also commenting on the issue at same event, which was organised by the Natural Resource Governance Institute, MP for Effia in the Western Region Joseph Cudjoe said: “We are talking about an operator that can compete at the exploration, development and production levels; and as it stands now, with the kind of monies that are going to the GNPC, I am afraid its plans will remain a wish”.

Alex Mould argues, however, that the corporation is well-minded about the huge capital it requires, and so will only go into projects that have high rates of return, or projects that pay for themselves.

“So if you have projects that pay for themselves you should be able to raise money; you should be able to put some equity down; you should be able to raise money from the banks and from the capital market; or even get investors forming joint-ventures with GNPC to do this,” he said.

“Some people always speculate that GNPC is going into areas that are not its core mandate. But GNPC’s core mandate has to do with exploration, appraisal, production and disposal. So if I am disposing of my gas I can form a company to dispose of the gas. I do not have to dispose of it at the well-head. I can dispose of it by going down the value chain. So for example, gas goes into power; GNPC can decide to form a power company, because that power company is basically going to dispose of the gas; it is going to use the gas to produce electricity,” Mr. Mould noted.