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Vivo Energy Ghana to sue NPA over operational licence

  • SOURCE: | qwesa2big
  • npa

    The management of Vivo Energy Ghana Limited is expected to make a strong case before the Board of Directors of the National Petroleum Authority (NPA) on January 15 against the proposed withdrawal of the company’s operational licence by the industry regulator.

    The company is expected to use the opportunity to explain why it was not able to transfer eight per cent of its stake to indigenous investors, the reason for which the NPA threatened to revoke its licence, sources close to the process have told the GRAPHIC BUSINESS.

    It will also use the forum to make a plea to the board to tamper justice with mercy by holding on to its intentions to withdraw the licence, while management makes a last-minute effort to disinvest the eight per cent stake in line with the mutual agreement in 2013.

    “For now, they will have a grace period until January 31 to operate. NPA will also use that period to decide the next line of action,” one of the sources told the paper.

    Legal requirements

    The transfer of the eight per cent to locals was a key requirement to the granting and subsequent renewal of the licence of Vivo Energy, which has taken the operations of Shell in the country. That requirement was reached at the time Vivo Energy acquired 82 per cent stake in Shell International, which then made it a majority shareholder in the local unit of the oil trading and marketing firm.

    The sources told the paper that NPA, which regulates the downstream petroleum sector, had earlier prompted Vivo Energy through a letter, stating its intentions to revoke the licence.

    That followed the company’s inability to raise indigenous ownership from the current 18 per cent to 25 per cent as earlier agreed.

    “After receipt of that letter, they (Vivo Energy) wrote back seeking an opportunity to make a representation to the board and the board agreed and fixed January 15 for that meeting,” the source said.

    When contacted, the Corporate Communications Manager of Vivo Energy, Mrs Shirley Tony Kum, declined comment, explaining that her outfit and the NPA had agreed to abstain from making public commentary on the matter.

    “It is a process and we have started. For now, we will be grateful if you respect our decision not to comment again,” she said.

    The decision by the eight-member board of the Petroleum Authority to grant audience to Vivo Energy on the matter is a legal requirement under the NPA Act, Act 2005 (Act 691), which states that before the board revokes a licence, it must, within 30 days, notify the licensee of its intentions, give reasons for the actions and provide an opportunity for oral or written representation to that effect.

    Although the oral or written representation is optional for a licencee, the source, who is familiar with the process, told the GRAPHIC BUSINESS on January 7 that Vivo Energy had invoked that clause through a formal letter that reached the authority on January 6.

    After the presentation by the company, the Act requires that the board, which is Chaired by Mr Ralp Roland, a financial manager at the Social Security and National Insurance Trust (SSNIT), has up to three months to take a decision.

    Its decision shall then be communicated in writing to the Minister of Energy and Petroleum, the Act provides.


    Vivo Energy was formed in 2011 by three international companies – Vitol, a global oil trading company, Helios Investment Partners Limited and Shell International – with a mandate to market and distribute the products of Shell across Africa. GB

    Source: Daily Graphic

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