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Save Ghana from paying millions of dollars; probe Aker-AGM transaction – CSOs to Akufo-Addo

  • SOURCE: | qwesa2big
    • POSTED ON: March 9, 2023
    Save Ghana from paying millions of dollars; probe Aker-AGM transaction – CSOs to Akufo-Addo

    Civil Society Organisations (CSOs), Imani
    Africa and the Africa Centre for Energy Policy (ACEP) have welcomed the
    announcement by AGM Petroleum to relinquish its interest in the South Deepwater
    Tano (SDWT) block, which hosts one discovery, the Nyankom-1X, from a drilling
    campaign embarked on by AGM in 2019.

    These Civil Society Organizations are
    therefore calling on President Akuffo Addo to immediately commission an enquiry
    into the Aker-AGM transaction as a way to ensure a culture of accountability
    into the management of the petroleum industry and ensure that the country can
    count on leadership to avert paying hundreds of millions of dollars on
    avoidable transactions and also establish the source of the overwhelming power
    Aker and AGM have had to dictate their terms in the oil industry since 2018 and
    the preferential treatment they have enjoyed.

    They also want the President to recommend
    clear actions required to develop the Pecan field after Aker failed to submit
    an acceptable Plan of Development in five years as an operator of the
    Deep-Water Tano Cape Three Points (DWT/CTP) block, adding, “Aker has
    received ten extensions, and it appears imminent that the company will request
    the eleventh extension with clear indications that Aker has not fulfilled its
    obligations to Ghana under the terms of its contract”.

    They encouraged all well-meaning Ghanaians
    to join this call for the President to institute this enquiry.

    In 2021, AGM and Aker Energy, both
    significantly owned by the Norwegian businessman, Kjell Inge Røkke, proposed to
    sell 70% of the SDWT Block and 37% of the DWT/CTP, held by Aker to GNPC at the
    cost of about $1.3 billion in a joint transaction.

    However, Imani Africa and ACEP, in
    alliance with other well-meaning Civil Society Organizations (CSOs), opposed
    the transaction after reviewing the costs and policy rationale for the
    acquisition as it assigned economic benefits to Aker and the costs to Ghana.

    “One outstanding prediction in the
    advocacy at the time was that the information on the Nyankom discovery was too
    scanty to justify the claims made by AGM that the asset was worth more than
    $700 million. There was clear contention on the value of the Nyankom discovery
    arising from the fact that AGM failed to put out even the slightest hint about
    the commerciality of the ultra-deep-water discovery”,
    the two CSOs

    “Subsequently, the company became dodgy
    about efforts to appraise the discovery. It therefore raised significant
    suspicion when GNPC decided to acquire that asset with such certainty that oil
    could be produced from the discovery. In the press statement released by AGM,
    the company corroborates the predictions we made at the time, stating that;
    “The SDWT block is situated in ultra-deep waters with substantial investments
    required to proceed”,

    they added.

    They continued that the quote from AGM is
    that the Nyankom discovery is not commercially viable, adding, the fact that
    the block is in ultra-deep waters has always been known.

    “The essence of declaring commerciality in
    petroleum operations is for the contractor to be satisfied that the petroleum
    discovery is significant enough to generate a positive return on investment
    with the available technology or justify the development of a new technological
    solution to develop and produce the discovery”.

    They further stated that the
    relinquishment of the interest raises fundamental questions about the
    assessments conducted by GNPC and the Ministry of Energy to commit to paying
    for such an asset.

    Furthermore, they said given that AGM did
    not conduct appraisal post-discovery, it is fair to say that GNPC, as a partner
    to AGM, should have known the status of the discovery by interpreting the same
    dataset available to AGM.

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