Adnan Adams Mohammed
The Energy Ministry has swiftly replied Lukoil on concerns it raised in a ‘SOS letter’ to Ghana National Petroleum Corporation’s (GNPC) on the planned acquisition of stakes in Aker Energy and AGM Petroleum Ghana.
The Russian oil company, which is a stakeholder in the Deepwater Tano Cape Three Points (DWT/CTP) block raised concerns of being sidelined in the whole transaction.
In the letter to GNPC through the Energy Minister, Lukoil said it has not been aware of and not engaged in discussions of its partners to sell the stake and change the operatorship, despite it being one of the main partners in the Deepwater Tano Cape Three Points (DWT/CTP) block offshore Ghana, with a 38 percent Licence Interest and a 42.22 percent Participating Interest. But, the Ministry of Energy in response to the concerns said it appreciates Lukoil’s cordial relationship they have built.
“We wish to formally acknowledge your comments regarding the proposed transaction between Aker Energy/AGM and GNPC and to reiterate our appreciation of the long-standing relationship with Lukoil”, the Energy Ministry remarked in its letter to Lukoil. “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 Ministry allayed the oil company’s fears that the project execution and schedule will be put at significant risk by the proposed transaction.
“On the contrary, at the successful completion of the transaction, GNPC Explorco will beome a 40% shareholder in the operator Joint Venture Company. As such, there will be no resignation or change of operator.”
The Energy Ministry further indicated that the acquisition transaction is still at its early stages and currently under negotiations, adding that Lukoil and Fueltrade will be engaged at the appropriate time.
“It is expected that at the appropriate time, Aker Energy Ghana Limited and GNPC will engage with Lukoil and Fueltrade in accordance with the JOA.”
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 a $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.
Meanwhile, LUKOIL agitated that, being one of the main partners in the DWT/CTP project, with a 38% Licence Interest and a 42.22% Participating Interest, it has not been aware of and engaged in discussions about the plans of its partners to sell the stake and change the operatorship
Per the ownership structure of the Deepwater Tano/Cape Three Points bloc, Aker Energy holds a 50 percent participating interest.
Other partners include LUKOIL with 38%, Fueltrade with 2% and the Ghana National Petroleum Corporation with 10%.
It is really worrying for LUKOIL, as the second-largest shareholder in the bloc, to be kept in the dark.
In a statement addressed to the Energy and Finance Minister’s among others, LUKOIL said it strongly believes that the proposals of its partners to sell some stake and change the operatorship of the bloc, may introduce significant risks for the project execution and schedule.
In order to avoid any negative consequences for the DWT/CTP project, LUKOIL said it shall be directly involved in the discussion of such fateful issues as the sale and acquisition of Aker Energy’s share, the resignation of the Operator of the DWT/CTP project and appointment of a successor as well as further project financing plans, so as to ensure further sustainable development of the project in the interests of all stakeholders.
The company further urged the Energy Minister to note that all activities regarding the sale and acquisition of Aker Energy’s share, the resignation of the Operator of the DWT/CTP project and appointment of successor and further project financing plans are subject to revision and/or approval in accordance with the provisions of Joint Operating Agreement dated 9 July 2015 (JOA).
The DWT/CTP deal is part of the $1.6 billion deal, which has been met with stiff opposition from some 15 civil society organizations who say Ghana is been short-changed.
They argue that although the contract to give GNPC more oil stakes is in order, but the value at which the deal is being reached is a threat to the country’s economic and fiscal prospects and must be looked at again.
However, the GNPC on the other hand is insisting that the deal is the best for the country.