Chairman of the Civil Society Platform on Oil and Gas, Dr Steve Manteaw, has urged critics of the GNPC-Aker deal to change their stance and give it the needed support.
Speaking to journalists on the sidelines of a forum organised by Ghana EITI and the World University Service of Canada, Ghana (WUSC) in Aburi in the Eastern Region on Wednesday, Dr Manteaw said GNPC has missed many opportunities like the one the Aker-AGM one brings to acquire operatorship capability.
“We [CSOs] made a strong recommendation to the government to help GNPC to acquire operatorship capability and to increase its stakes in the oil bocks. We also thought that GNPC was not putting its resources to efficient use. Again, we recommended that GNPC should be encouraged to focus on its core mandate – exploring and producing oil for this country.
“Let me make the point that some say we have had the opportunity. But I think we haven’t really had the opportunity to nurture GNPC to that role. The first opportunity we gave the GNPC was under the AGM contract where somewhere along the line GNPC was expected to transition from a mere equity holder to the operator of the field. But somehow, we amended that contract when Aker acquired it and gave Aker a lot of incentives to be able to encourage that company to produce the oil in the block. I thought that was wrong and I spoke against it at the time,” he said at the forum on Gender Mainstreaming into Ghana’s Extractive Sector.
He added that critics of the deal should rather acknowledge that Ghana has been lucky that at a time almost all the multinational oil companies are leaving, the country have been presented with the unique opportunity to increase its stake in Aker.
“We are talking about 700 million barrels of oil in the two blocks. Some of my colleagues argue that the valuation used a higher value of about 65 dpb, that we are not likely to achieve that price in the medium to long term and therefore, it makes the transaction disadvantageous to Ghana. So, I decided to look at the minimum range which is 50dpb. We acquired the block at a per barrel rate of 50 dollars and we know that the breakeven price for the crude is 30 dollars, on each barrel of oil we are making dollar-profit.
“If you multiply that by the 700 million barrels in the ground, does it give us profit or do we lose as a country? That is my basis for assessing whether we should do this or not. In terms of whether the price has been inflated or not, I am not in the position to say, except to say that to every transaction there is a cost side and there is the benefit side.
“We will look at the cost, look at the benefit and see whether by investing X amount you are going to get X plus One, X plus two and that informs you whether you should proceed or back out. Let me emphasise that the right thing to be done is that the international oil companies are all under pressure to divert their investment from fossil fuel into renewable energy.
“There are EU Foundations that support some NGOs in Ghana who are in line with the EU to push for the transition from fossil fuel to renewable energy. Unfortunately for Ghana, we are an emerging oil-producing country, these international oil companies have been able to maximise their benefits, they have made a lot of profits from extracting hydrocarbons and now they are investing these profits in renewables.
“If we were to abandon our fossil fuel in the ground the only option we have as a country is to go and borrow to invest in renewables. I don’t support that. I would rather that in the interim, between now and the next 60 to 80 years that the EU projects the transition will last, let GNPC move in there to produce oil. Let us make all the money we can and then have a national strategy that reprioritises the ABFA and invest in renewable energy,” he said.
Parliament has approved a proposal t for GNPC and Ghana to own more of our oil and gas resources and develop the capacity to explore and produce our own oil and gas.
The approval will allow GNPC to own significant stakes in offshore oil blocks for the first time since it was established in 1983. Ghana’s interest in the Aker Energy and AGM blocks will increase to 47% and 85% respectively.
GNPC has argued in its proposal to Parliament, that the new ownership structure will provide it and Ghana a firm ground to face the emerging energy transition in a well-prepared manner and create significant value for the benefit of the Ghanaian people.
Once finalised, GNPC Explorco, the commercial wing, would also become a joint operator with Aker Energy in both blocks through a new joint operator company, providing an opportunity for GNPC to acquire operatorship capacity to enable it to play a major role as an Exploration and Production company.
