Ghana National Petroleum Corp. (GNPC) has come under fire for a plan to hand over a stake in offshore projects to South Africa’s PetroSA.
The plan would give PetroSA half GNPC’s 7% stake in Jubilee Holdings Ltd (JOHL).
A number of local NGOs, and politicians, have opposed the proposal.
Local reports have said Ghanaian Energy Minister Matthew Opoku Prempeh came out against the plan. The plan is contrary to Ghana’s interests, Prempeh said, according to a letter circulating locally, addressed to the president.
The Prempeh letter was reported as saying that the offer to PetroSA was “scandalous” and that GNPC chairman Freddie Blay should “cease and desist immediately” from such offers. Blay had “totally ignored the wider interests” of Ghana, the minister said.
Prempeh said he had held talks with his South African counterpart, Gwede Mantashe, at the Africa Energy Week in 2022 on the issue. Blay is “asking PetroSA to test the resolve of the ministry”, Prempeh continued.
Former energy minister Emmanuel Armah-Kofi Buah said the plan would short change Ghana. The opposition politician said the plan had “spawned a full-blown turf war between the Minister of Energy on the one hand and the Board Chairman and CEO of GNPC on the other”.
Buah noted GNPC had bought its 7% stake during the 2021 exit of Anadarko Petroleum. The handover was part of a negotiated tax settlement, the former minister said.
PetroSA’s claim to the Jubilee stake stems from its pre-emption rights. In exchange, PetroSA said it would relinquish all further claims to the Deep Water Tano (DWT) licence.
Buah said pre-emption rights had an obligation on the seller, not the new owner.
“What the board chairman of GNPC and the CEO are bent on doing therefore effectively amounts to attempting to relinquish Ghana’s interest on a silver platter,” he said. The president should order an immediate probe into the situation, he said.
GNPC chairman Blay denied any wrongdoing. “I have done nothing wrong,” he told Citi FM. “I have observed my conscience and I thought I was protecting the interest of the country.”
A letter from GNPC to PetroSA said the board, and the legal department, had approved the plan to split the JOHL stake.
GNPC acquired its 7% stake in the Jubilee and TEN areas in 2021, paying $165 million to Occidental Petroleum. GNPC had previously held 13.64% in Jubilee and 15% in TEN. While the Ghanaian company said it had planned to transfer the stake to its Explorco unit, it seems to have kept them within the offshore-registered JOHL.
For the deal to go through, it will require approval from energy minister Prempeh. Given his objections to Blay’s plans, it seems unlikely it will be forthcoming.
The debate over GNPC’s plans comes shortly after concerns were raised in the press around decommissioning at the Saltpond field.
A US company, TSB Offshore, was initially planning to take part in the decommissioning work. However, Africa Intelligence reported this month, that the company pulled out citing US anti-corruption statutes.
The French news agency said TSB was concerned over the involvement of Ensol Ghana Energy, which has close links to senior executives at GNPC.
The state-owned Ghanaian company rejected the accusations. GNPC had sought a company to provide project management consultancy work on the decommissioning, it said. Ensol and TSB won the tender in January this year. TSB backed out in March. GNPC said TSB’s withdrawal was based on the company’s desire to pursue other projects, rather than “any malpractice by anybody related to GNPC”.
TSB did not respond to requests for a comment on why it exited the decommissioning contract.