The Civil Society Organisations (CSOs) Coalition on Extractive Governance has raised concerns over attempts by the Ghana National Petroleum Corporation (GNPC) to sell a 50 percent stake of Jubilee Oil Holding Limited (JOHL) to PetroSA, a South African firm.
JOHL, a subsidiary of the GNPC, was acquired in 2021 at the cost of US$164,798,691 by GNPC through a Share Purchase Agreement between Anadarko Offshore and GNPC with monies advanced by the Ministry of Finance. In 2022 alone, the interest of JOHL raked in some US$290million, according to the 2022 PIAC annual report. Total payments for cash calls (including fields in which Exploreco holds an interest) amounted to US$83million – leaving a gross margin of US$207million for GNPC/JOHL from the Jubilee and TEN fields operated by Tullow Ghana.
Despite the revenue potential of this interest to the state, the coalition said GNPC has initiated steps to sell 50 percent of JOHL’s assets held in the Cayman Islands to PetroSA, in what the CSOs described as bizarre circumstance two years after Anadarko sold the asset to GNPC. Details of the deal came to light in a letter from the Minister of Energy, Dr. Matthew Opoku-Prempeh, in which he urged the president not to approve the transaction.
“Given that US$290million has already accrued to JOHL, the purchase of 50 percent imply that PetroSA would receive a percentage of the accrued benefits net of the purchase price and other costs – and meaning that PetroSA may not have to pay anything for interest. We are actively monitoring the sharp political tussle for and against sale of the asset. This situation was always possible when government decided to domicile Ghana’s asset in a tax haven and refused persistent calls to bring back the asset to Ghana,” the coalition said at a press conference in Accra.
The over-32-strong CSOs including the Africa Centre for Energy Policy (ACEP), Integrated Social Development Centre (ISODEC), National Coalition on Mining (NCOM), IMANI Centre for Policy and Education and the Institute for Democratic Governance (IDEG), while commending the Minister of Energy demanded full details of the transaction as well as an immediate removal of the GNPC’s Board Chair, Freddie W. Blay, and Chief Executive Officer, Opoku Ahweneeh Danquah, adding that their continuous stay in office poses a threat to country’s interests in the petroleum sector.
According to the CSOs, GNPC has already agreed to a pre-emption claim of PetroSA though the Minister of Energy has written to the corporation and the president to oppose the transaction.
It is against this backdrop that they are questioning GNPC’s motive to undertake this transaction despite the revenue potential to the state, two years after Anadarko sold the asset to the state-owned firm.
“This situation was always possible when government decided to domicile the country’s asset in a tax haven and refused persistent calls to bring the asset back to Ghana. In the meantime, we wish to state emphatically that the pre-emption claims are illegal, and those contemplating it have interests at variance with those of the state,” it said.
The coalition argued that it is unjustifiable for PetroSA to pre-empt the state’s interest without any legal basis in the petroleum (exploration and production) law and the applicable petroleum agreement: “Therefore, for the board chairman and CEO to have concocted a justification for the pre-emption, their continued stay in office – close to any petroleum asset – poses significant risks to Ghana’s interests in all petroleum operations.
“We are concerned that the two directors of JOHL have supervised the secrecy around the company – and have made no attempt to account for its revenues and expenditures. They have shown no interest and have woefully failed to operationalise any corporate governance structures, including appointing a managing director or a functional board for JOHL. Furthermore, they have not made any attempt to transfer the interests of JOHL to Explorco or GNPC as originally stated in GNPC’s statement announcing the transaction,” the coalition added.
Among other things, the CSOs demanded an immediate transfer of JOHL and all its assets from the Cayman Islands and other jurisdictions to GNPC.
Other coalition members are the Centre for Extractives and Development Africa (CEDA), Civil Society Platform on Oil and Gas (CSPOG), Public Interest and Accountability Committee (PIAC), CSOs Open Licencing Monitoring Group, Ghana Anti-Corruption Coalition (GACC), Centre for Democratic Development (CDD), Natural Resource Governance Institute (NRGI), and Chamber of Petroleum Consumers Ghana (COPEC), among others.