Shake-up at GNPC

Reports gathered by The Chronicle newspaper revealed that there is going to be a massive shake up at the Ghana National Petroleum Corporation (GNPC), the body that supervises oil exploration in the country.

The Chronicle could not lay hands on the individuals who are going to be swept away by the tsunami, but this reporter can state that some of the board members, management and staff would be affected.

A close source told The Chronicle that some of the GNPC staff had been seconded to almost all the energy-related departments and agencies under the government. These staff members have allegedly turned themselves into mafia groups, which have been thwarting the efforts of the relevant authorities, on issues relating to energy, and sometimes, contracts.

The source said because these workers have representatives in areas such as the Petroleum Commission, National Petroleum Authority (NPA), Ministry of Energy, Ghana Grid Company and Volta River Authority among others, they are able to get first-hand information about impending contracts.

This privileged information, according to the source, is shared by these workers among themselves. They then use it as the springboard to get their stooges to bid for the contracts, which in most of the cases, they win.

The bid winners then pay them huge kickbacks as rewards for helping them win the contracts. A top government official, contacted by The Chronicle confirmed the story, and said everything was being done to weed out the mafia groups from the system.

According to the top government official, the issue had even been brought to the attention of President Mahama, and very soon, there would be a massive shake-up at the state corporation, to ensure the smooth running of the sector.

Soon after coming into office in 2009, the current board of the GNPC awarded a juicy contract, allegedly worth $147,000, to one of their own to represent the corporation in matters relating to law. The action of the board incurred the wrath of some of the workers of the GNPC, who argued that the action amounted to a clear case of conflict of interest.

In an exclusive interview with The Chronicle, somewhere April 2011, the Chief Executive officer of the GNPC, Nana Asafu-Adjaye, argued that the appointment of one of the board members to represent the company was informed by the lawyer’s rich experience as a legal practitioner in the oil industry.

According to him, when the National Democratic Congress (NDC) was handed the responsibility of administering the country on January 7, 2009, it took over six months before the GNPC Board was inaugurated. Before the Board came into being, so many urgent matters that needed to be addressed had cropped up.

“When the Board met, there were so many urgent things that needed to be attended to. There were issues on how to plan the development of the Jubilee Field, because it was supposed to be developed on a fast track basis.

“There was a unit and unitization operating agreement that also needed to be negotiated. All this while, our partners were on us. So, the Board decided that somebody like that (name withheld) should be remunerated to help us.

“So the Board had to settle on him because of his rich legal experience in the oil industry,” noted Nana Asafu-Adjaye at the time.

The CEO further told The Chronicle that the Board conducted numerous interviews in search of an experienced legal person with the requisite skills in the oil industry, but it “was very difficult to get one,” hence the decision to fall on the said board member.

“So it was the Board’s decision to engage him. And when the decision was being taken, he rescued himself from the meeting, and it was a full Board that took the decision,” he noted.

However, Nana Asafu-Adjaye was not forthcoming with the US$147,000 said to be the amount payable to the said board member.

“Information concerning the directors of the corporation is confidential,” he shot back, adding “in terms of specific amounts, there are standard fees that lawyers charge, but what he’s being paid doesn’t come close to that.”

Asked whether the GNPC was not promoting a conflict of interest situation, the GNPC CEO answered in the negative. “I don’t think there is any conflict of interest here.”

“There is a provision, even in the service code, which provides for members of the board to decide, through a resolution, for a director to act in his or her professional capacity on behalf of the corporation,” he added.

Since the production of oil in commercial quantities started in Ghana in 2010, the GNPC has always been getting the lion share of proceeds.

Of the 2012 petroleum receipts of US$541.62 million (GH¢979.32 million), an amount of US$230.95 million (GH¢416.89 million) was transferred to the GNPC, comprising Equity Financing Cost of US$124.63 million (GH¢224.21 million), and GNPC’s 40 percent share of net Carried and Participating Interest of US$106.32 million (GH¢192.68 million), in line with Section 7 of the PRMA.

The corporation has the responsibility to search and locate oil deposits in Ghana, but it only managed to make a breakthrough in 2007, when crude oil was struck in commercial quantities off the coast of Western Region.

The GNPC, in collaboration with its foreign partners, is currently searching for crude in the Keta basin in the Volta Region, which is believed to have crude oil deposit, but is yet to be struck by any oil exploration company.

The top government official, who spoke to The Chronicle on strict confidentiality, noted that the corporation, which was established in 1983 by the Rawlings military government, had a strategic role to play in shaping Ghana’s economy, and that everything possible would be done to ensure that some of its unscrupulous staff did not destroy the destiny of the country.