‘I have not been involved in any abnormal gas pricing in any way’ – Alex Mould
Adnan Adams Mohammed
The former Ghana National Petroleum Corporation (GNPC)and Executive Director of Standard Chartered Bank, Alex K Mensah Mould, has cleared himself from a statement made against him by the Ministry of Energy for his involvement in the fixing of Eni Ghana, Sankofa Gye Nyame (SGN) gasfield, gas price.
The energy and financial expert cleared that, he was not involved in any gas price-fixing in any way whatsoever to the disadvantage of Ghana. “I have not been involved in any gas-price fixing in any way whatsoever to the advantage of ENI/VITOL, nor did I make decisions on the gas price which would be of benefit to me directly or indirectly. On the contrary, the gas price reached by a negotiation team, based purely, on the economics of the project and a reasonable market Rate of Return (RoR) to the investor for such risky deepwater exploration projects”, he explained in a statement issued last week.
In a rejoinder to a publication which captured the former GNPC boss as saying, the claims that the relocation of the Karpowership will save electricity users of US$170 million is fabricated, the Ministry of Energy accused Mr Mould of negotiating a very high price for the Offshore Cape Three Point (SGN) gas.
“We wish to note further that the savings to the state would be more if GNPC under Alex Mould had not negotiated a very high OCTP gas price considered the highest globally for similar projects and which now stands at $10.9/mmbtu. Ghanaians demand answers from him, how patriotic Ghanaian could negotiate such a price”, the rejoinder signed by Nana Damoah, Head of Communications at the ministry stated.
Below is the full statement of Alex Mould:
What is the NPP government saying I did wrong? What do I have to do with their inefficiencies in the management of the Energy sector after three years of being in government? What??? That I negotiated a very high OCTP gas price…
First of all, I have not been involved in any gas-price fixing in any way whatsoever to the advantage of ENI/VITOL, nor did I make decisions on the gas price which would be of benefit to me directly or indirectly;
On the contrary, the gas price reached by a negotiation team based purely on the economics of the project and a reasonable market Rate of Return (RoR) to the investor for such risky deepwater exploration projects;
High Gas Price and Ghana saddled with inability to meet take-or-pay obligation is due to NPP dropping the ball on leverage created by NDC.
SGN savings of approximatelyUS$691million at US$0.55 per US$100million savings was supposed to reduce the gas price by approximately US$3.8/kSCF
Original nominal gas price was US$9.8
– NPP government approved additional drilling which was not part of the original approved Plan of Development (PoD) approved in 2014
By allowing Eni/Vitol to use these savings in drilling wells, not in initial POD and spending on items not approved in initial POD, NPP government dwindled savings from $3.8/kSCF to only 40cents/kSCF
What should have happened was that the US$691million savings should first have been applied to reduce the gas price before allowing an increase in development cost.
Secondly, the NPP government delayed the completion of two major pipeline projects which would have enabled expedited evacuation of gas by the time the SGN gas was ready for export around mid2018:
– the first pipeline was the Aboadzi-Sekondi pipeline to provide gas to the Karpower Barge which was ready to be connected sometime in 2018
– The second pipeline was the WAPCO reverse flow which would enable over 120mmscf of gas a day to be pumped or compressed to Tema from Aboadzi
Funds for both pipeline projects were available from GNPC which had over 150m on its balance sheet as of the end of 2016 when NDC left power.
What happened, they used the money to bailout BOST rather than to fund the two pipelines.
There are savings – we knew that – but it’s not $170million a year. Again, Government is being disingenuous when it uses the highest HFO price for its analysis instead of the average actual over the past three years of the operation of the barge.
President Mahama’s Government had always envisaged the use of indigenous gas once it becomes available.
Again the decision to move to a single 450MW barge instead of the original 2 x 225MW barges were taken by President Mahama’s Government as far back as 4Q 2015 when by a letter to the financiers of Karpower, the Government committed to the 450MW barge.
The real issue must be what happened to the savings from the OCTP project.
Let’s be truthful to Ghanaians and call the spade the spade. I am a patriot and nationalist who has my country at heart
God bless our homeland Ghana and free us from state capture and corruption