The National Democratic Congress, (NDC) through its minority caucus in Parliament says it is not against the decision of the Akufo-Addo government to purchase 37% interest in the Deep Water Tano/Cape Three Points (DWT/CTP) operated by Aker Energy Ghana Limited and 70% stake in the South Deep Water Tano (SDWT) operated by AGM Petroleum Ghana Limited (Aker/AGM deal).
However, the NDC says the proposed purchase price is inflated and does not guarantee value for money. To this end, the party is demanding that all the necessary due diligence, independent audits, valuation and appraisals be conducted by GNPC to ensure value for money for the country before the deal is approved by Parliament.
Government has asked Parliament to approve a US$1.65 billion dollars loan to finance the acquisition, comprising of a purchase amount not exceeding US$1.3 billion for the two blocks and a Capital Expenditure share of GNPC Explorco of US$350 million for Peacan 1.
The position of the largest opposition party was made known Sunday, 5th of September 2021, in a statement issued by the Minority in Parliament and signed by Hon. John Abdulai Jinapor, Ranking Member for Mines and Energy and Hon. Cassiel Ato Forson, Ranking Member for Finance.
“The Minority in parliament has consistently canvassed and advocated for a significant increase of GNPC’s stake in the country’s oil assets to maximize national revenue for the development of the country. It was in furtherance of this view, that the erstwhile NDC/Mahama government established Explorco as a commercial wing of the GNPC in the year 2015, with the aim of making it an operator in the foreseeable future” the statement read.
“The current decision by the Akufo-Addo/Bawumia government to acquire higher stakes for the country in the Aker/AGM Oil blocks is a vindication of what we as a political party have always stood for. It is refreshing that the NPP has come to appreciate the wisdom in this position. However, the sad reality is that, the country will now have to pay more for the acquisition of higher stakes in the Aker/AGM blocks as a result of the reckless decisions taken by the NPP in the year 2018, as have been explained above” the Minority further noted.
Stating the NDC’s position, the Minority’s statement indicated that “with regards to the current proposed share acquisition transaction by GNPC in the Aker and AGM blocks, the NDC Minority is not against the policy or decision for GNPC to acquire higher stakes in the said oil blocks per se”.
“However, it must be made clear that we have serious concerns about the proposed hyper-inflated purchase price of the blocks and demand that all the necessary due diligence, independent audits, valuation and appraisals be conducted by GNPC to ensure value for money for the country before the deal is approved by Parliament”.
Government has appointed Bank of America Securities (BofA) as the transaction advisor for its planned acquisition of 37% interest in the Deep Water Tano Cape Three Points (DWT/CTP) concession operated by Aker Energy Ghana Ltd and a 70% stake in South Deepwater Tano (SDWT) operated by AGM Petroleum Ghana Ltd.
Acquiring a stake in these operations is in line with the government’s new policy direction for the upstream sector. The proposed acquisition has already been approved by cabinet and Parliament subsequently approved a loan to facilitate the commencement of negotiations between government, Aker Energy and AGM.
The choice of Bank of America Securities was driven by Bank of America’s track record as one of the world’s leading financial institutions, with proven expertise in notable international landmark oil and gas transactions, and for its reputation as one of the world’s leading investment banks and advisory companies, with a global presence.
The bank also has an established and ongoing relationship with the Government of Ghana and has worked extensively on various transactions including the 2021 Eurobond transaction.
Single Source Approval
To meet the end-of-third-quarter timeline set for the deal, the Ministry of Finance requested and gained approval from the Public Procurement Authority to recommend and procure the services of Bank of America (BofA) Securities as transaction advisors through single sourcing. The approval for this transaction advisory service is valid until 31 December 2021.
The transaction advisors will be required to provide a fairness opinion/independent valuation as well as a general advisory service on the transaction.
Click on the link below to full statement of the Minority Caucus in Parliament on the NDC’s Position