Sunday, 8 August 2021

GNPC's Operator ambition: Parliament approves budget to take stakes in AGM and Aker blocks

Adnan Adams Mohammed


The parliament of Ghana has approved a request by the Ghana National Petroleum Corporation (GNPC) to borrow $1.65 billion to buy two stakes in Ghana’s offshore fields.


The Joint Committee of  Mines and Energy and Finance of Parliament approved the request  on last week, Friday.

This was after the Energy Minister, Mathew Opoko Prempeh submitted a memorandum to the legislature seeking approval to purchase 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.


Such partnerships, the GNPC noted, were critical, as it explained that, it has become even more imperative as a result of the exit of some major oil companies from Ghana. In the current scheme of things, the GNPC said it has to shore up its capacity and take up a large part of the exploration activities before Ghana’s oil reserves hit a level of terminal decline. GNPC further justified that,, with the shift away from investments in oil and gas into renewable, Ghana faces the risk of stranded assets and dwindling proven reserves if GNPC is unable to undertake exploration, development, and production alone. Upon these reflection, the parliament approved the request.


"The Committee, after diligently analysing the risks and benefits of the Transaction as presented by the Ministries of Energy/Finance and GNPC, agreed by consensus that; GNPC, through GNPC Explorco should acquire 37% equity stake in Deep Water Tano/Cape Three Paints (DWT/CTP) operated by Aker Energy Ghana Limited, and 70% equity stake in the South Deep Water Tano (SDWT) operated by AGM Petroleum Ghana Limited", the Committee report read.


Other recommendations made by the joint committee of parliament are as follows: "GNPC Explorco establishes a Joint Operating Company between Aker Energy and AGM and directed the Minister for Energy and Minister for Finance commence negotiations to agree on a purchase price with Aker Energy/AGM.


"A loan facility to finance the acquisition cost not exceeding US$1.1billion and GNPC Explorco share of the capital expenditure (CAPEX) to Pecan 1 First Oil of US$350 million.


"The Committee recommends to the House to adopt its report, and approve by resolution, the transactions as stated in paragraph 7.1 (a), (b), (c) and (d) subject to the following:


"The terms and conditions of the loan for the acquisition of the shares shall be brought to Parliament for consideration pursuant to Article 181 of the Constitution)


"The Petroleum Agreement (PA) between GNPC Explorco and Aker Energy/AGM shall be laid in Parliament for consideration pursuant to Article 268 of the Constitution and Petroleum (Exploration and Production) Act, 2016 (Act 919)."