GNPC has expertise to acquire stake in Aker/AGM bloc – Energy Minister

The Energy Minister, Dr. Matthew Opoku Prempeh, has offered the strongest assurance yet to investors and other upstream petroleum stakeholders on Ghana National Petroleum Corporation’s (GNPC) ability to finance and operate the oil blocs it is seeking to increase its stake in.

In a response to a letter of concern by Lukoil, one of the main partners in the Deepwater Tano/Cape Three Points (DWTCTP) with Aker Energy, Dr. Opoku Prempeh said: “We can confirm that GNPC has the necessary financial backing and technical competence to acquire the stakes under discussion and to participate in the operator company which will remain unchanged.”

The Russian oil giant, in a letter dated August 9, 2021, and signed by Ivan V. Romanovsky, it's Vice President for the Americas, Western Africa and Europe to all partners including the ministries of energy and finance, GNPC, Aker Energy and Fueltrade Limited, expressed concerns about the planned significant changes, both in the financing of the DWT/CTP project and its operation.

Stressing on its position as one of the main partners with a 38 percent Licence Interest and 42.22 percent Participating Interest in the DWT/CTP, Lukoil pointed out that it has not been aware of and engaged in discussions about the plans of its partners to sell the stake and change the operatorship.

“Lukoil strongly believes that the aforementioned proposals may introduce significant tisks for the project execution and schedule. In order to avoid any negative consequences for the DWT/CTP prkect, Lukoil shall be directly involved in the discussion of such fateful issues as (i) the sale/acquisition of the Aker Energy’s share, (ii) the resignation of the Operator of the DWT/CTP project and appointment of successor and (iii) further project financing plans, so as to ensure further sustainable development of the project in the interests of all stakeholders,” the letter said.

But the Energy Minister stressed that the suspicion that the project execution and schedule will be put at significant risk by the proposed transaction, as suggested in the letter, will not arise.

“On the contrary, at the successful completion of the transaction, GNPC Explorco will become a 40 percent shareholder in the Joint Venture Company. As such there will be no resignation or change of operator,” he said.

He also assured Lukoil that the acquisition of the stakes by GNPC is still at its early stages and currently under negotiations. “It is expected that at the appropriate time, Aker Energy Ghana Limited and GNPC will engage with Lukoil and Fueltrade in according with the Joint Venture Agreement.”

Background

GNPC, through its GNPC Explorco, is allowed to participate in the upstream petroleum sector and it plans to purchase a 70 percent stake in the South Deep Water Tano (SDWT) operated by AGM Petroleum Ghana Limited and a 37 percent stake in the Deep Water Tano/Cape Three Points (DWT/CTP) operated by Aker Energy Ghana Limited.

The company will form a joint operating company with the two entities and acquire the said stakes at different agreed prices. GNPC has already secured Cabinet approval and is seeking $1.65 billion loan.

The company has justified the deal, saying such a partnership with the two entities is critical because of the exiting of oil majors from the country. It said it needed to build its capacity and take up a large part of the exploration activities before Ghana’s oil reserves hit a level of terminal decline.

But some civil society organisations and energy experts are arguing that the agreement is skewed in favour of Aker Energy and would plunge Ghana into further debt.