The Chairman of Parliament’s Mines and Energy Committee, Samuel Atta-Akyea, has disclosed that its committee would not relent on assertions making the rounds that the Ghana National Petroleum Company (GNPC) has formed a subsidiary company without recourse to parliament.
He indicated that the committee will interrogate the issues by summoning the three parties including the Minister of Finance, Energy and the CEO of GNPC.
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Contributing to the Committee on Employment, Social Welfare and State Enterprises annual financial performance report on GNPC for 2019 and 2022, Hon. Atta Akyea brought up the issue of subsidiary companies which has been set up by the national oil company.
“There have been some assertions that some subsidiary companies have been set up without reference to this great house, I am tempted to believe that they did not come to this house to seek approval to set up these subsidiaries, so far as you are a statutory body and you need a vehicle to pilot your activities, you could do so, But a matter which has come to the fore, is that monies intended for this nation is in some foreign clients -offshore funds, the committee has decided that we are bringing before the whole committee the Ministry of finance, Ministry of Energy and GNPC to come and explain the kind of permutations that went into these arrangements and some monies found itself offshore, so this is a matter of great concern and it has been penciled because of travel arrangement of the minister of finance, energy minister and GNPC MD but for sure your committee is alive to its responsibilities, there is no dispute about it, we are going to interrogate this issues and bring a good report on the consideration of the house,” he said.
This follows an allegation made by the African Centre for Energy Policy (ACEP) that the GNPC is seeking to assign an interest in some of Ghana’s oil blocks to Jubilee Oil Holdings Limited, a company registered in the Cayman Islands.
ACEP claims its checks have revealed that this company is registered with erstwhile CEO of the company, Dr. K. K. Sarpong, and Freddie Blay, Board Chairman of GNPC as directors.
According to the Public Interest and Accountability Committee (PIAC) semi-annual report on the management and use of petroleum revenues from January – June 2022, following the acquisition of 7 percent interest in the Jubilee and TEN Fields by GNPC in 2021 (later ceded to its subsidiary -JOHL.).
JOHL made its first lifting (944,164bbls) on the Jubilee Field in H1 2022, amounting to US$100,748,907.95. This amount was not paid into the Petroleum Holding Fund.
Hon. Atta Akyea also stated that one challenge of GNPC which cannot be ignored is the hard fact that monies due GNPC can be
taken from them by the Ministry of Finance for other purposes, explaining that state institution will be deprived of the needed
capital to do what is expected of it, which is one factor the committee observed.
Further he said “anytime a state institution deviates from its mandate and is entangled in other matters, apart from those decisions being ultra vires, the statutes that gave birth to the state institutions, monies could be wasted, so it is about time we whip them into line -that your mandate have been clearly defined by law. [PNDC Law 64] because the mandate is very clear, when you go into
other undertakings especially without parliamentary approval, a tendency is that you might have some serious problems and this is what we are doing as a committee to whip them into line.
Given the financial situation of GNPC, I am of the view that they are going to move at the tortoise pace in delivering their mandate, there is a huge area of Ghana’s land space, it is called the Voltaian basin, it is said that we have huge reserves of crude oil and cash, not offshore but on our lands and I have observed small amount of capital they bring when they want us to approve their work programme, given the monies and their allocations which are coming in, trickles, I do not foresee a situation where GNPC will be able to work on the Voltaian basin which I am educated has more crude oil and gas than what we are experiencing
now.
It is imperative that GNPC finds credible international partners or local investors accelerating the development of crude oil and gas in the Voltaian basin and I am of the view that if this is so done and there is an acceleration of that, our people will get good employment and it is going to help the nation so well, apart from the problem of crude oil which is now an international issue.”
Gov’t urged not use GNPC to fund other activities
The Committee on Employment, Social Welfare and State Enterprises of Parliament asked government to desist from using GNPC as its cash cow in funding activities unrelated to its mandate.
Speaking in Parliament on Tuesday, the Ranking Member on the committee, Dr. Kwabena Donkor said “without the injection of new funds, GNPC is on the brink of bankruptcy.”
“The financials don’t speak well of GNPC. The future is bleak
for GNPC and, therefore, we must insist that GNPC stays on the straight and narrow path in its operations.”
The Ranking Member on the Mines and Energy Committee of Parliament, John Jinapor, also said the GNPC is on the verge of collapse due to the decrease in its profitability.
He noted that the gross profit margin had reduced from “50 percent in 2018, to 26 percent in 2019 to 0.3 percent in 2020.”