Despite the continuous fault-finding of the proposed farm-out deal between Ghana National Petroleum Corporation (GNPC), Aker Energy and AGM Petroleum, Chief Executive Officer (CEO) of the Corporation, Dr. KK Sarpong, will have none of that, saying the move is in the utmost interest of the country.
He argues that he personally entered into the agreement after he was convinced that the deal when brokered will be beneficial because the partnership between GNPC and the other partners is crucial to Ghana’s oil and energy space.
The GNPC CEO in an interview on the Point of View on Citi TV among other things rubbished claims that the deal was in bad taste given what many have claimed is its overpriced value.
“I don’t think that Aker Energy and AGM are in a hurry to leave. If you look at the time profile set for this energy transition – that is the movement from fossil fuels to renewables, we are talking about a 30-year period to get to that level. It is a long way to go, so over time you will see that there is the movement of investment into the extraction and production of fossil fuel and shift capital to fossil fuel. Are they telling us, we should leave our oil in the soil, I think there is hypocrisy there.”
“Indeed, the Western Countries have extracted oil in their backyard and our fields, and they want us to leave ours there. This is something that, as someone from a developing country, I find it very difficult to accept. It is this realization and kind of position which dawned on me which really necessitated my push for this agenda. All that I am saying is that within this time frame, production should be going on now and if they shift investment from us, it means we cannot develop our fields and our oil will remain in the soil”, he added.
‘Erroneous price claims’
GNPC has sought parliament’s approval for a loan of US$ 1.65 billion to acquire a 70% stake in the South Deep Water Tano (SDWT) operated by AGM Petroleum Ghana Limited and a 37% stake in the Deep Water Tano/Cape Three Points (DWT/CTP) operated by Aker Energy Ghana Limited.
The move when finalized will mean GNPC will possess significant stakes in the offshore oil blocs, with Ghana’s shares in Aker Energy increasing to 47% while that in AGM blocs goes up to 85%.
But 15 Civil Society Organizations (CSOs) working in the extractive industry have petitioned parliament to stop GNPC from going ahead with the agreement.
They make a point that although the contract to give GNPC more oil stakes is in order, the value at which the deal is being reached is a threat to the country’s economic and fiscal prospects and must be looked at again.
However, Dr. Sarpong says there is no cause for alarm over the pricing because that has not been finalized.
“We are not buying the two blocs at US$ 1.3billion. We have not said so. What the Minister requested was the mandate that he can go and negotiate within that limit. But parliament after consideration said it will give a limit of US$ 1.1billion for acquisition. Even that is not conclusive; maybe they can beat it and see if people will play ball. ”
“So we have to correct that impression that a price has been determined. That is not the case, we are in the process to go and discuss and negotiate and agree on the price. Parliament in its wisdom has set the cap that we should not go beyond. I want to commend parliament for giving the Minister a threshold. So that perception that a price has been determined is erroneous.
Way forward
Touching on the next course of action, Dr. Sarpong stated that plans are ongoing among the relevant stakeholders to have the agreement sealed despite the concerns that have been raised against it.
“We are looking at what will be the kind of agreement, the structures we want to put in place. These are all in discussion now. We are working, but the trigger point will be the agreement on the price. The Finance and Energy Ministers have been tasked by parliament to see to this process.”
