Sunday, 24 February 2019

GNPC 2019 work programme implementation to delay

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Adnan Adams Mohammed

The Ghana National Petroleum Corporation (GNPC) is likely to present a work programme for the year 2019 as Minority is demanding the withdrawal of the current work programme before the House after African Center for Energy Policy (ACEP) raised concerns.

Cassiel Ato Forson, Minority Spokesperson on Finance said the allocations for items such as corporate social responsibility and the use of GNPC as a vehicle to borrow some US$250 million to be spent by the Energy Ministry is illegal.  “What we expect of the Ministry of Energy is to withdraw this document and relay something acceptable before the House. I am going to start a crusade against such expenditure.”

In recent times, the Corporation has become more popular in delivering development projects rather than its core mandate. In a detailed analysis of the GNPC’s work programme for the 2019 financial year, which is currently awaiting parliamentary approval, the GNPC plans to spend US$43.05 million on CSR but only US$20.3 million on its operations in the Voltaian Basin and its subsidiaries in the sector. This is less than 50% of what the Corporation wants to spend on CSR.

“While GNPC, like any corporate entity, has a responsibility towards society, it is unusual for sound corporate organisations to spend more than 10% of its cash flow (not profit) on corporate social responsibility,” ACEP states in a report, adding that, spending as much as US$43 million on corporate social responsibility gives a cause for concern particularly when it is juxtaposed against GNPC’s “operations expenditure beyond the traditional cash call on the producing fields.”

ACEP raised the concerns in a detailed analysis of GNPC’s work programme for the 2019 financial year and urged Parliament not to approve the CSR budget for GNPC.

“Parliament should not approve any CSR budget for the Corporation until the end of the fifteen-year financing window provided in the Petroleum Revenue Management Act (PRMA) has elapsed. This should free up funds for the Corporation to deliver on its core mandate as an upstream oil player,” ACEP recommended.

GNPC is Ghana’s national oil company established in 1983 to support the government's objective of providing an adequate and reliable supply of petroleum products and reducing the country's dependence on crude oil imports, through the development of the country’s own petroleum resources. It is a partner in all petroleum agreements in Ghana and the national gas sector aggregator in Ghana.

The Corporation has been in the news in recent times over a seeming turf war between the Chief Executive, Dr. K.K Sarpong and Board Chair, Freddie Blay over the corporation’s procurement functions.

Dr. K. K. Sarpong has been accused of trying to assume the procurement function of the Corporation’s Chief Finance Officer.

But Board Chair of GNPC, Freddie Blay mounted Pressure on Dr. K. K Sarpong, to reverse the decision with immediate effect.

In relation to the development, a policy think tank, Institute for Energy Security had also called on President Nana Akufo-Addo to call the Board Chairman and Chief Executive of the Ghana National Petroleum Corporation (GNPC) to order.

The civil society body believes this friction undermines the smooth operations of the national oil company.

The IES Executive Director, Paa Kwasi Anamua-Sakyi who spoke to Citi News, said the troubles at GNPC could affect investment in Ghana.

“It is important that the President who has the power to appoint leading personnel in these functional areas should step in and stop this because it can deter investors and so it is important for the number one gentlemen of the land to make a statement on this and bring these two gentlemen to order,” he added.

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