Government has debunked assertions by IMANI Africa that Ghana will lose some 30 billion dollars if the Petroleum Agreement between government and Aker Energy is not renegotiated.
At a press conference on Thursday, IMANI said its checks had revealed that Aker Energy was exploring oil in wells not captured in the petroleum agreement with government describing the move as illegal.
It, therefore, asked the government to review the contract to ensure that Ghana benefits from the contract.
However, at a press conference, Energy Minister John Peter Amewu said IMANI’s statements cannot be substantiated.
“IMANI tried to alarm Ghanaians about the potential loss of $30 billion dollars to the country if the government fails to renegotiate the petroleum agreement. This is absolutely false. It is an untrue story and it is very very alarming.”
Early this year, Aker Energy announced the discovery of oil in the Pecan well in the Deepwater Tano Cape Three Points (DWT/CTP) block offshore Ghana.
[contextly_sidebar id=”M93IRDoQ7gzRcmA4ivo3wT2hvf2s4mOu”]The company explained that initial works showed that its Pecan well could be holding some 450 to 550 million barrels of oil.
The Pecan field is approximately 166 kilometres southwest of Takoradi in Ghana, to a vertical depth of 4,870 meters in 2,667 meters of water, containing seven discoveries.
According to the company it estimates that with the next appraisal wells to be drilled, the total volumes to be included in a plan of development have the potential to increase to between 600 – 1,000 barrels of oil.
IMANI Africa in a statement insisted that Ghana is likely to lose huge sums of money due to improper negotiations.
“Given the fact that this impressive find constitutes additional oil discovered in Aker’s contract area previously held under an old Petroleum Agreement (PA) which lapsed in 2014, it is our considered view that the additional oil discovered in 2019 are essentially not covered by any of the Petroleum Agreements (PA) in force, hence those additional finds require a new Petroleum Agreement [and] should be negotiated under the Petroleum (Exploration and Production) Act, 2016 Act 919.”
IMANI explained that if the agreement is renegotiated, “Ghana stands to gain an estimated $9bn, through potentially 25% to 30% increased equity interest and royalties (assuming 5% royalty plus 15% carried interest plus 5%-10% additional participating interest in block) in the short term plus any potential corporate income tax and the windfall additional oil entitlements (AOE) in the long term.”
“As things stand, Ghana stands to gain a paltry 14% of increased equity interest and royalties (10% interest in block + 4% royalty) amounting to $4.2 bn in the short term, representing a potential loss of $4.8 billion – that is, $9bn less $4.2 bn,” the policy think tank added in its statement.
“GNPC may have sold Ghana short by allowing Aker to assume from start that these new oil discoveries automatically fall under the existing Petroleum Agreement (PA), which is erroneous. At the least, Ghana could have exercised its right to take up the 10% additional equity option in the Aker Block. The failure, refusal or negligence to do this is truly startling for a developing nation which needs to make the most of its natural resources.”
IMANI in its statement further asked some 16 questions it believes will help Ghana make “a much better deal than one developed by a few stakeholders.”
The Minority had also indicated that the state will lose over $7 billion due to the agreement.