Parliament urged GNPC to position itself for better financial prudence

Parliament on Tuesday approved the programme of activities for the Ghana National Petroleum Corporation (GNPC) for 2020, with a call on the state agency to better position itself to be more financially prudent.

The Emmanuel Akwasi Gyamfi chaired the Committee on Energy and Mines, whose report on the 2020 schedule of the GNPC was approved and adopted by the plenary, recommended to the GNPC to look for potential investors to take over the Prestea Sankofa Gold Limited (PSGL) to make it financially prudent.

The PSGL reportedly ceased operations in 2016, but the GNPC continued to allocate funds from its petroleum operations in unsuccessful efforts to revamp it.

An amount of US$5.00 has been earmarked for the activities for the PSGL in 2020.

However, “the Corporation explained that all efforts to revamp the company in view of its socio-economic importance-job creation and possible revenue to the State, has not been successful”.

The Committee was of the view that the continuous expenditure on such non-revenue generation venture was financially not prudent; and accordingly urged the Corporation to look for potential investors as, a matter of urgency and priority, to take over the company.

As part of the report, Mr Gyamfi, who is also the Member of Parliament for Odotobri Constituency, announced that Cabinet has taken a decision to cede the midstream gas operations to the Ghana National Gas Company, but the Corporation would continue to play its role as Aggregator of the Gas in the upstream sub-sector.

However, the midstream operations involving the processing, transportation, distribution and sale of the gas to the end-use, are being transferred to the Ghana National Gas Company.

The Chairman informed the plenary that the Deputy Minister of Energy, during the Committee’s interaction with him, explained that inflows from the GNPC from the gas business was just about 2.5 per cent of its total budget.

Consequently, relinquishing the gas management business to the Ghana National Gas Company will not significantly affect the Corporation’s finances, and therefore suggested unbundling the gas business by allowing the Ghana National Gas Company to assume the role of operator to maximize the benefits of gas resources to the country.

In 2020, scheduled activities of the GNPC, both midstream and other projects, are made up of the construction of oil and gas enclave roads, with a budgetary allocation of US$30million; a revamping of the Prestea Sankofa Gold Limited, whose initial budget of US$11.26 was downsized to US$5million.

“An interim re-organisation committee has been established to revamp the company’s operations,” Mr Gyamfi announced.

Other planned projects are investment in the petroleum hub, marine patrol vessels, and fertilizer and biotechnology projects.

The non-petroleum capital projects would involve the Accra Head Office, the Corporate Operational Head Office in Takoradi, Research and Technology, Works and Landed Project, refurbishment of the Petroleum House in Tema, completion of works on Chapel Hill and works on redevelopment of the Takoradi Beach Road.

The Energy and Mines Committee Report noted that the price war between Saudi Arabia and Russia and the impact of the Corona Virus pandemic led to a crash in oil prices in the first quarter of 2020.