News Guide Africa

Tag: GNPC

  • Eni, partners sign agreement with Ghana to strengthen energy production and sustainability

     

     

     

    Eni Ghana and its Offshore Cape Three Points (OCTP) project partners, Vitol and the Ghana National Petroleum Corporation (GNPC), has signed a Memorandum of Intent with the Government of Ghana, represented by the Minister of Energy and Green Transition and the Minister of Finance, targeting the country’s oil and gas production increase and new sustainable initiatives.

     

    The signing was held at the presence of the President of the Republic of Ghana, John Dramani Mahama.

    The agreement will evaluate a comprehensive and integrated investment plan, aimed at contributing to national goals for reliable, affordable, and low-impact access to energy.

     

    Among the key initiatives proposed is the possible increase in OCTP project production capacity, leveraging synergies between offshore and onshore upgrades, aimed at increasingly meeting the country’s growing domestic energy demand.

     

    The collaboration focuses also on the evaluation of Exploration activities and the new potential development of the Eban-Akoma field in Cape Three Points Block 4, which, following the declaration of commerciality announced in July 2025, is set to become a new and significant source of supply, leveraging on existing infrastructure for the benefit of value and time to market.

     

    Eni and OCTP partners have already invested over US$10 million in social programs directly benefiting more than 10,000 people in the areas of education, access to clean water, health and hygiene, and support for the local economic fabric. With the launch of a second phase, new initiatives will be introduced in these areas, along with services dedicated to the development of micro, small, and medium-sized enterprises will be expanded.

     

    Eni has been present in Ghana since 2009 with offshore hydrocarbon exploration and production activities, with an equity production of around 34,000 barrels of oil equivalent per day. The company operates the OCTP project with a 44.4% stake, in partnership with Vitol (35.6%) and the Ghana National Petroleum Corporation (20%). Since 2018, the OCTP project has produced over 107 million barrels of oil and 480 billion standard cubic feet (Bscf) of gas, helping to meet approximately 70% of the country’s gas demand for power generation. The joint venture’s project portfolio also includes initiatives in training, economic diversification, access to water and sanitation, and energy access.

     

     

     

  • Eni Ghana and Partners upgrade gas processing system to 270 MMScf/day 

     

    Eni Gas Processing Plant

     

     

    Eni Ghana, together with its OCTP partners – Vitol Upstream Ghana Ltd (Vitol) and the Ghana National Petroleum Corporation (GNPC) – has completed a major upgrade of its Non-Associated Gas (NAG) system, boosting processing capacity from 246 to 270 million standard cubic feet per day (MMSCFD).

     

    Operational since August 2018, the Offshore Cape Three Points (OCTP) project has become a key contributor to Ghana’s domestic gas supply, providing around 70% of the total, mainly for electricity generation. Starting at 210 MMSCFD, OCTP has steadily increased output through phased optimizations and achieving its current milestone of 270 MMSCFD on July 13.

     

    This recent advancement not only increases gas supply but significantly reduces Ghana’s reliance on oil-fueled power generation to a cleaner energy source, delivering both economic and environmental benefits and reinforcing the country’s commitment to a cleaner, more sustainable energy future.

     

    Currently, natural gas from OCTP powers around 34% of Ghana’s electricity, providing homes, industries and businesses with a stable and cleaner energy source. The project’s progress highlights the value of strong partnerships and sustained investment in building a resilient, diverse energy sector for sustainable national development.

     

    Eni has been present in Ghana since 2009 with offshore hydrocarbon exploration and production activities, with an equity production of about 34,000 barrels of oil equivalent per day. The company is the operator of the OCTP project with a 44.4% share in partnership with Vitol (35.6%) and Ghana National Petroleum Corporation (20%). The joint venture’s portfolio of projects also includes initiatives in the areas of training, economic diversification, access to water and sanitation and access to energy.

     

  • Eni Ghana and Partners provide entrepreneurship and management training for 900 MSMEs

    Press Release Statement:

     

    Eni Ghana and its OCTP Partners, Vitol and GNPC, in partnership with Ghana Enterprises Agency (GEA) provide entrepreneurship and small business management training in the Western Region

     

    Accra, 22 May 2023 – Eni Ghana on behalf of its OCTP partners, Vitol Upstream Ghana Ltd (Vitol) and Ghana National Petroleum Corporation (GNPC), together with Ghana Enterprises Agency (GEA), have provided entrepreneurship and small business management training for over 900 beneficiaries. The initiative targeted individuals from ten (10) communities, namely Atuabo, Bakanta, Ngalekye, Sanzule (including Anwolakrom fishing area), Krisan, Eikwe, Anokyi, Ngalekpole, Asemda, and Baku in the Ellembelle District of the Western Region.

     

    The project was carried out under the Economic Diversification Building Business Project, which focused on women, youth and marginalized groups to enable the establishment of Micro, Small and Medium Enterprises (MSMEs), fostering entrepreneurial culture and supporting the local economy of the district. Training included subjects such as entrepreneurship, financial literacy, as well as technical workshops, to create an enabling environment for job creation.

     

    Over 900 beneficiaries received training in Entrepreneurship and Business Management, Health and Environmental Management, Compliance and Regulatory Support, Branding and Packaging, as well as support to formalize their businesses with the Office of the Registrar of Companies. Technical skills training was also offered in various trade areas, such as livestock, agro and fish processing, food and drink production, textiles, garment and accessories production, toiletries and cosmetics production, leather, rattan and woodworks, bamboo and catering services.

     

    The project, designed in collaboration with the World Bank, is part of the sustainability initiatives that Eni Ghana, together with its OCTP partners, Vitol and GNPC, are carrying out to impact the communities, by supporting start‐up businesses to enhance employment opportunities. It has been very well received by all stakeholders, including the leadership of the various communities and the Ellembelle District Assembly.

     

    Ghana Enterprises Agency is the apex governmental body under the Ministry of Trade and Industry mandated to promote and develop Micro, Small and Medium Enterprises (MSMEs) in Ghana.

     

    Eni is a global integrated energy company operating in 62 countries. It has been present in Ghana since 2009 with its upstream activity and currently accounts for a gross production of about 70,000 barrels of oil equivalent per day.

  • Oil coys pay almost US$700m in royalties and corporate tax

    Oil coys pay almost US$700m in royalties and corporate tax

    The total revenue from royalties for the three oil fields in Ghana was around US$303 million in 2022 compared to US$186 million in 2021, representing 63.2 per cent increase, the 2022 annual report of the Public Interest Accountability Committee (PIAC) had noted.

     

    Royalties are early and dependable sources of revenues for the state as it is a charge on gross production.

     

    Royalty from the Jubilee Field contributed 52 per cent of the total Royalties for the period, followed by SGN (32%) and TEN (16%).

     

    CIT is currently charged at a rate of 35 per cent on profits of the IOCs.

     

    The total CIT received from the three fields in 2022 stood at US$388,889,564.00, representing 90.8 per cent increase from that of 2021 (US$203,854,804.35).

     

    Ghana receives US$1.43bn in oil revenue; highest since oil production began – PIAC report

    CIT constituted the second highest among the petroleum revenue streams in 2022.

     

    The Ghana Revenue Authority (GRA) is required under Section 3 of the Petroleum Revenue Management Act, 2011 (Act 815) to assess, collect, and account for petroleum revenue due Ghana derived from royalties, corporate income tax and other defined sources.

     

    These revenues are paid directly into the Petroleum Holding Fund (PHF) by the 15th day of the ensuing month by the entities obliged to make the payment.

     

    For 2022, a total of US$1,428,760,076.93 accrued to the PHF from royalties, carried and participating interest (CAPI), corporate income taxes (CIT), surface rentals, and income earned on the PHF, compared to US$783,325,849.87 in 2021.

     

    This represents 82.4 per cent increase from the 2021 figure.

     

    The increased revenues can be attributed to favourable international crude oil prices which were higher than estimated prices, the PIAC report said.

     

    The average achieved price by GNPC on behalf of the Ghana Group for the three producing fields increased by 52.9 per cent from US$69.180/bbl in 2021 to US$105.746/bbl in 2022.

     

    Despite the decline in production volumes, petroleum revenues increased in 2022 by 82.4 per cent.

     

    Receipts from Crude Liftings for Ghana Group

     

    Receipts from crude oil liftings amounted to US$1,036,800,383.96 in 2022 as compared to US$578,613,886.90 in 2021, representing an increase of 79.2 per cent.

     

    Receipts from Jubilee Field

     

    Crude Liftings Six (6) liftings (64th – 69th) were made from the Jubilee Field in 2022, yielding US$567,393,883.49 in receipts, whereas five liftings recorded in 2021 yielded US$310,863,857.82.

     

    Receipts for the period include the 63rd parcel of crude oil lifted on the 8th December, 2021 which was realised in January 2022 and excludes the 69th lifting on 17th December, 2022 whose revenues will be realised in January 2023.

     

    The JOHL, a subsidiary of GNPC, made two (2) liftings during the year under review yielding a total of US$185,567,320.93 on the Jubilee Field.

     

    Receipts from TEN Field

     

    Crude Liftings for Ghana Group

     

    One (1) lifting (21st) was made in 2022.

     

    Total receipts from liftings in 2022 yielded an amount of US$182,370,774.69 whereas receipts for 2021 yielded US$128,723,696.70 from three (3) liftings.

     

    Receipts for the period include the 20th Lifting from the field on 15th December, 2021 whose revenue was realised in January 2022.

     

    The JOHL made one (1) lifting yielding an amount of US$87,084,888.02 on the TEN Field.

     

    Receipts from Sankofa Gye-Nyame (SGN) Field Crude Liftings

     

    There were three (3) liftings on the SGN field in 2022 with total revenues amounting to US$287,035,725.78 as compared to two (2) liftings in 2021 yielding US$139,026,332.28 in revenues. This represents a 106.5 percent increase over 2021 receipts.

     

    JOHL Crude Oil Lifting Receipts

     

    For the year 2022, a total amount of US$272,652,208.95 was made from JOHL’s liftings in the Jubilee and TEN fields. However, the revenue from these liftings were not part of receipts into the PHF for 2022.

     

    Analysis of Petroleum Receipts

     

    Carried and Participating Interest (CAPI) continues to contribute the highest percentage of total revenues followed by Corporate Income Taxes, Royalties, PHF Income, and Surface Rentals.

     

    Carried and Participating (Additional) Interest (CAPI)

     

    Carried and Participating Interest are two (2) forms of state participation that effectively capture its fair share of economic rents from petroleum projects regardless of whether there is initial commitment of funds by the State or not.

     

    The revenue derived from CAPI constituted 51.4 per cent (US$733,845,523.27) of total revenues accruing from the three (3) fields as compared to US$392,930,250.44 in 2021.

     

    This represents 86.8 per cent increase in CAPI over that of 2021.

     

    The CAPI generated from the Jubilee Field stood at US$409,422,833.99, whilst that of TEN and SGN amounted to US$135,001,742.30 and US$189,420,946.98, respectively.

     

    Surface Rentals

     

    Surface Rental payments received in 2022 totaled US$687,759.16 compared with US$826,815.52 for 2021, indicating a 16.8 per cent decrease.

     

    According to the GRA, this amount received is attributable to nine (9) out of the current fourteen (14) companies with respect to the oil blocks under their operation.

     

    As of the end of December 2022, Surface Rental Arrears had amounted to US$2,774,066.79, up from US$2,579,170.21 as at the end of 2021, representing a 7.6 per cent increase.

     

    Out of the Surface Rental Arrears, an amount of US$1,803,124.41, representing 65 per cent of the total arrears, relates to four (4) contractors whose Petroleum Agreements were terminated by the minister of energy in 2021.

     

    PHF

     

    Income Interest on the Petroleum Holding Fund yielded US$2,382,369.82 in 2022 as against US$30,343.09 in 2021.

     

    This represents a significant increase in the interest income on the PHF (7,751%).

     

    The significant increase was as a result of higher overnight rate on cash holdings from 0.05 per cent at start of 2022 to 4.30 per cent at end of the year.

     

    Gas Revenue

     

    Apart from 2015, there has been no payment into the PHF with respect to gas revenues from raw gas supplied by GNPC.

     

    A total of 31,623.54 MMSCF of raw gas worth US$211,505,426.70, was delivered to Ghana National Gas Company (GNGC) during the period under review.

     

    According to GNPC, total outstanding receivables from GNGC with respect to raw gas supplied amounted to US$605,691,381.479 as at the end of December 2022.

     

    These represent revenues from gas sales that ought to be paid into the PHF.

     

    Make-Up Gas

     

    Make-Up Gas (MUG) for the three-year period 2018 to 2020 amounted to 35,650.45 MMSCF.

     

    Out of the amount, 180.10 and 5,431.47 MMSCF were recovered in 2021 and 2022, respectively, leaving a balance of 30,038.88 MMSCF to be recovered in subsequent years.

     

    According to GNPC, in 2021, due to relatively lower offtake volumes, the Annual Contract Quantity 11(ACQ) was exhausted on 30th December 2021, therefore, only 180.10 MMSCF was recovered on 31st December 2021.

     

    However, in 2022, due to increased offtake volumes, the ACQ was achieved by 4th December, leaving about 27 days of MUG recovery which amounted to 5,451.37 MMSCF for the year.

     

    Per the Gas Sales Agreement (GSA), the MUG for each year can be recovered within five years following the year that it was incurred, on First-In First-Out (FIFO) basis.

     

    Thus, the total MUG taken of 5,631.47 is matched against MUG of 2018, leaving a balance of 837.57 MMSCF of 2018 to be recovered by the end of 2023.

     

    The total invoiced amount for gas taken from the SGN Field in 2022 amounted to US$456,673,908.92.

     

    An annual reconciliation adjustment for the 2021 delivery year as per the Gas Sales Agreement (GSA) resulted in a credit of US$1,585,904.27 to GNPC in January 2022.

     

    This brings down the total gas invoice amount to US$455,088,004.65.

     

    Cumulative Petroleum Revenues (2011-2022)

     

    From 2011 to date, total petroleum revenue has amounted to US$8.79 billion.

     

    The year 2022 has recorded the highest realised petroleum revenues into the PHF, with 2016 recording the lowest revenues.

  • Aker-GNPC deal: FPSO price inflated by over US$600mn

    Aker-GNPC deal: FPSO price inflated by over US$600mn

    A case of an inflated price has been identified in the botched Ghana National Petroleum Corporation (GNPC) and the Norwegian Petroleum Company, Aker Energy transaction in which GNPC wanted to pay Aker US$1.65 billion to acquire a 37 percent stake in the Deepwater Tano/Cape Three Points (DWT/CTP) and 70 percent interest in SDWT.

    The inflated price has to do with the cost of the Floating Production Storage and Offloading (FPSO).

    FPSO is a marine vessel, used by the offshore oil and gas industry, for the production and processing of crude oil.

    Ghana would have lost a colossal US$565 million, if the deal had gone through in the form and shape it was presented by the GNPC last year.

    The two institutions, had been involved in negotiations to acquire Ghanaian oil blocks, and needed an FPSO for the exploration of the crude oil.

    Interestingly, while the state-owned GNPC is quoting whopping US$600 million, Aker Energy says the FPSO, is rather costing a paltry US$35 million; US$565 million less than what officials of GNPC led by its immediate past Chief Executive Officer (CEO), Dr Kofi Koduah Sarpong, had in presentations told Akufo-Addo’s cabinet, the Ghanaian media and civil society organizations during the heated GNPC-AKER debate last year.

    The deal was suspended after it was discovered that, GNPC did not conduct any due diligence on the wells before expressing interest in them willing to cough up a massive US$1.62 billion.

    Dr Sarpong and Dr Baah-Nuakoh, GNPC’s General Manager, Sustainability and Stakeholder Relations in many power point presentation, said “Aker’s share of cost = US$740 million, comprising FPSO (US$600 million) and cash calls and IGC financing (US$140 million)”.

    But the Norwegian company in its “Fourth quarter and preliminary annual results 2021” mentioned that “Aker Energy and its license partners have secured the FPSO Dhirubhai-1, from Ocean Yield for USD 35 million, for the Pecan field development and are working to firm up cost and schedule and further optimize the concept to mitigate cost inflation”.

    The report said that, “Aker Energy is an E&P company aiming to become an offshore oil and gas operator in Ghana”, adding “Aker Energy and license partners are working to submit a revised Plan of Development for the DWT/CTP block by the end of second quarter 2022”.

    Benjamin Boakye of the African Centre for Energy Policy (ACEP) was the first to identify and raise issues with the inconsistency in the amounts presented by the two institutions i.e. GNPC and AKER-Energy.

    He took to his Twitter handle, saying “in the same accounting year, the cost of the same FPSO is $600m to GNPC and $35m to investors. Activist saved Ghana from the #Aker transaction. I hope the media houses that said CSOs were Anti-Ghana are following the numbers”.

    Dr Sarpong, in his farewell message to GNPC workers had stated that “Aker Energy’s Pecan Field will come on stream in the very near future” meaning the Akufo-Addo government was still interested in the deal.

    Aker-energy in the “Fourth quarter and preliminary annual results 2021” also stated that “during the quarter Aker Energy secured further financing from African Finance Corporation of an additional 100 million dollars in senior secured convertible bonds. Aker Energy is evaluating different strategic options for its ownership in the DWT/CTP block. In August 2021, the Ghanaian Parliament approved a mandate for GNPC to negotiate a transaction with Aker Energy regarding a potential acquisition of a stake in the DWT/CTP block”.

    The Herald is also investigating a report that the Aker deal, has been whittled down to around US$300million from a high of $1.6 billion.

    Sometime last year, many civil society groups and personalities challenged the GNPC-Aker deal.

    One such person was Dr Theo Acheampong, a Petroleum Economist and Political Risk Analyst, who stated that the proposed $1.65bn Aker

    Energy/AGM – GNPC farm-out deal is overpriced.

    He told Accra-based Joy FM on its Super Morning Show, Tuesday, August 10, that “in my view, there’s overpricing of the assets, the assumptions that went into the assets need to be questioned and we shouldn’t be paying for the amounts that are being quoted”

    Dr Acheampong, stressed that the oil price being used i.e $65, $67 per barrel, for the transaction, is questionable.

    According to him, the valuation could have been based on between $50 and $55 dollars per barrel, which will reduce the value of the entire transaction substantially.

    He further stated that after consultations with experts in the oil and gas industry, he arrived at a conclusion that the entire deal should be valued at a cost not more than $500million.

    “I have been running some numbers myself, and from consultations with persons who work in the industry both in Ghana and outside, I don’t think that the two assets are worth more than 500million dollars,” he said.

    He added that, “if you run a number of the scenarios and the numbers based on the production, projections and oil prices, you’re not looking at anything more than half a billion in terms of the value and that’s where I think we have to go back to question a number of the assumptions that are really going into these numbers that are being bandied about.”

    “As far as I know, nobody has certified the reserves, nobody has certified the contingent resources on the South Deep Water block, as far as I know, the commerciality of the Nyankom-1X has a big question mark around that and if all of these are taken into account, the value should be much lower,” he added.

    GNPC had claimed that the approval will allow GNPC to own significant stakes in offshore oil blocks for the first time since it was established in 1983, adding Ghana’s interest in the Aker Energy and AGM blocks will increase to 47% and 85%, respectively.

    GNPC, has argued in its proposal to Parliament, that the new ownership structure will provide it and Ghana a firm ground to face the emerging energy transition in a well-prepared manner and create significant value for the benefit of the Ghanaian people.

    Once finalized, GNPC Explorco, the commercial wing, would also become a joint operator with Aker Energy in both blocks through a new joint operator company, providing an opportunity for GNPC to acquire operatorship capacity to enable it to play a major role as an Exploration and Production company.

    Bright Simons, a global thought leader, also has raised red flags over the planned acquisition of stakes in Aker Energy and AGM Petroleum Ghana oil blocks by the Ghana National Petroleum Corporation (GNPC) saying it’s mind-boggling.

    In an article analyzing the developments, Mr Simons rubbished the GNPC’s reasoning for entering into the deal.

    He said the GNPC’s explanation that it wants to become a major operator in the production of oil within Ghana was “plain nonsense” as it has had past opportunities.

    Mr Simons, further noted that the GNPC, via subsidiaries, had not proven to be capable of bearing fruits in operations at South Deep Water Tano (SDWT) and the Offshore South West Tano Block (OSWT).

    Source: The Herald

  • GNPC cautioned on ‘Operatorship’ goal as ET agenda poses threat – NRGI

    GNPC cautioned on ‘Operatorship’ goal as ET agenda poses threat – NRGI

    Adnan Adams Mohammed

    The National Oil Company (NOC) of Ghana has been cautioned to thread consciously in the spirit of achieving its ambition of becoming Oil and Gas production operator in a few years time.

    The caution comes at the time, the global economic frontiers are committing to the Energy Transition (ET) agenda strongly as majority of the economies set to meet net zero carbonisation by 2040.

    Ghana National Petroleum Corporation (GNPC) plans to be Operator by 2025, and therefore seeking to invest significantly in exploration, development and production of oilfields. The recent attempt was the intention to buy stakes in Aker operated DWTCP oilfield yet to be developed at estimated budget of about US$1.5 billion. Though, as controversial as the deal was, the acquisition process has stalled. But, an Energy Transition expert with the Natural Resource Governance Institute (NRGI) is pessimistic with GNPC recouping its investment as the ET agenda takes to a ‘fast transition’ by 2040 at when a barrel of crude may sell at US$20 averagely.     

    “About three continents of the world economies plans to be net zero by 2040, so if they achieve that goal, GNPC has about 15 years of time before oil runs up. Is that the future to aspire? Is it good for Ghana? I don’t know”, David Manley quizzed rhetorically in an interview at the sideline of a two-day training program for selected media and CSOs representatives at Aburi in the Eastern Region of Ghana last week.

    The West African Regional Manager, Nafi Chenery, in her remarks called on governments’ to listen to people and as well as speak to different stakeholders, particularly those who already have some information and knowledge about energy transition, so they  can help share their knowledge and skills on the issues to improve on government’s efforts at making things better

    She posited that, the plans by government must speak to our realities and our context as Ghana and the world which has the potential to propel the country to the next level.

    “So we need to put in a lot of effort and prepare and ensure that whatever plans we are putting in place is representative of the views and voices of all sectors. Right that the plan speaks to our realities and our context as Ghana and the world, one has a potential to propel us to the next level.”

    “And so governments should listen to people and speak to different stakeholders, particularly those who already have some information and knowledge about energy transition, you know and share their knowledge and skills to improve on government transport,” Nafi Chinery said.

    She said energy transition plans need to be just,  inclusive and need to be participatory by all.

    Participants were excited about training and hopes it helps them improve on their works and writeups as CSOs and media respectively

    The energy transition is a pathway toward a transformation of the global energy sector from fossil-based to zero-carbon by the second half of this century. At its heart is the need to reduce energy-related CO2 emissions to limit climate change.

  • Debt burden of SOEs…GNPC most indebted

    Debt burden of SOEs…GNPC most indebted

    Adnan Adams Mohammed

    A former Chief Executive Officer of a State Owned Enterprise, Ghana National Petroleum Corporation, has painstakingly shown keen interest in the SIGA 2020 Report focusing on the liabilities of the SOEs. 

    The finance and energy expert, Alex Mould, has, thus, summarised the liabilities of the major SOEs in the country to help in critical scrutiny of the performance of the SOEs. In the summary, it was clear that, most of the SOEs more than doubled their arrears payments or liabilities. 

    The heavily indebted were GNPC, Ghana Cocoa Board (COCOBOD) and Electricity Company of Ghana (ECG). These companies have their liabilities exceeding GHC10.0 billion within a period of four years from 2016 to 2020. Consequently, some critics of the performance of GNPC are surprised why the corporation recorded a net loss of GHC1.6 billion in 2020 after recording a net profit of GHC204 million in 2019. Also, its direct cost, which was GHC2.4 billion in 2019 surged to GHC4.3 billion in 2020, a whopping 78% increase. 

    “GNPC must explain this financial performance at a time when it also spent GH₵200 million on ‘Corporate Social Responsibility’”, Bright Kwashie Dzokoto, a tax expert and a member of Tx Justice Coalition demanded. “This accountability-free regime must end.

    Mr Dzokoto demanded for convincing explanation from GNPC on its performance over the years.

    Below are the highlights of the liabilities as prepared by Mr Mould: 

    1. ECG

    Moved from GHC6.0 billion to GHC15.0 billion in 2016 to 2020. ECG’s liabilities are mainly trade creditors payable to Independent Power Producers (IPPs).

    2.  GACL 

    Moved from GHC740 million to GHC2.0 billion in 2016 to2020. These arrears are mainly to banks. 

    3.  COCOBOD 

    Here, the liabilities which are mainly bank loans, moved from GHC295 million to GHC10 billion within same period (2016-2020).

    4. GRIDCO

    Liabilities mainly owed to VRA/IPPs and PURC, moved from GHC485 million to GHC1.33 billion.

    5. Ghana Gas

    These liabilities mainly trade payables owed to GNPC, moved from GHC4.8 billion to GHC9.7 billion in 2016 to 2020.

    6.  GNPC

    Their liabilities were mainly in three folds; moved from GHC3.5 billion to GHC11.4 billion. The folds were: mainly trade creditors which moved from GHC237 million to GHC5.5 billion; loans of  GHC1.3 billion to GHC3.0 billion; and advance payment by GoG to Eni for unpaid gas amounting to GHC2.3 billion.

    7. Ghana Water 

    The liabilities mainly made up of trade creditors and loans of GHC4.2 billion; jumped from GHC745 million to GHC6.2 billion.

    8.  TOR

    The arrears of TOR increased from GHC3.7 billion to GHC4.6 billion. These was made of mainly Trade Creditors of GHC3.0 billion and loans plus ESLA amounted to GHC1.6 billion.

    9. VRA

    The total liabilities moved from GHC7.5 billion to GHC9.7 billion. These were mainly trade payables which grew from GHC4.2 billion to GHC6.8 billion while its borrowings dropped from GHC3.1 billion to GHC1.0 billion.

  • Energy Transition: NRGI Regional Manager Writes on How Ghana Can Map Its Journey

    Energy Transition: NRGI Regional Manager Writes on How Ghana Can Map Its Journey

    Author: Nafi Chinery

    All countries have a vital role and interest in avoiding catastrophic climate impacts and safeguarding a livable planet. Like the citizens of most developing countries, Ghanaians are increasingly affected by climate change, despite bearing little responsibility for the emissions that have caused it.

    At the COP26 climate conference last year, governments reaffirmed their commitment to the goal of limiting global warming to 1.5°C. Achieving this will require a colossal and unprecedented shift away from fossil fuels to renewable energy sources like wind and solar—as well as provision of clean, affordable and reliable energy for the nearly one billion people currently living without it.

    The wealthiest countries that have polluted the most should hold the primary responsibility for tackling climate change, both in cutting their emissions first and fastest, and in providing climate finance and support to countries like Ghana. Ghana’s President Nana Akufo-Addo emphasized this responsibility during COP26 when he called for a fair and equitable solution that “recognizes the historical imbalances between the high emitters and low emitters.”

    To date, however, wealthy countries have under-promised and underdelivered. They have yet to reduce emissions to the extent necessary to avoid warming beyond 2°C, let alone 1.5°C. And, as President Akufo-Addo also mentioned, they have failed to honor their 2010 promise of USD100 billion per year to support developing countries’ responses to climate change. Tragically, the consequences will be felt by all for decades to come.

    Ghana’s agency in the energy transition

    Despite this compound injustice and these broken promises, Ghana’s future ultimately depends on its own leadership and effective planning. Ghana is still a resource-dependent country, with more than a quarter of its export earnings coming from oil and gas alone. Over the past decade, the oil sector has contributed around $6.5 billion of direct revenue to Ghana’s budget. Without a plan to respond to the global energy transition, a significant decline in oil revenues could plunge Ghana into a deep crisis.

    At a minimum, the government should avoid making bad decisions—those that threaten the country’s economic and fiscal outlook. But Ghana’s record does not inspire confidence. In the last decade, the government has allocated $2 billion to the Ghana National Petroleum Corporation (GNPC). These investments have financed equity stakes in exploration, development and general operations in oil-producing fields. NRGI’s Risky Bet report shows that, globally, oil and gas projects currently in the pipeline worth an estimated $400 billion run the risk of not breaking even. Against the backdrop of the global energy transition, GNPC’s ambitions of becoming an operator are risky.

    In July 2021, Ghana’s Ministry of Energy and GNPC declared their intention to sink an additional $1.65 billion of public money into shares of Aker Energy’s oil project—yet another “risky bet” given the increasing pace of the global energy transition, which would result in poor returns on such a large-scale investment. Furthermore, such a decision would divert precious capital that the government could invest in more socially beneficial programs such as education or cheaper and more diverse energy sources that could power development in Ghana. Thankfully, after severe criticism from civil society organizations, the public and industry oversight bodies in Ghana, the government paused its investment plans in the Aker shares.

    No doubt, Ghana’s economic and fiscal outlook is uncertain. The 2018/19 oil licensing round remains unconcluded and oil production is projected to decline. International companies are redirecting their investments, and projects have been delayed. State oil revenues peaked in 2018, at 10 percent of total government revenue, and dropped to seven percent in 2020 due to the coronavirus pandemic. The ongoing war between Russia and Ukraine and the related global energy crisis now present huge uncertainties for the oil sector, including the prospect of a global recession.

    The good news is that Ghana now has a golden opportunity to develop a comprehensive and context-specific plan for navigating the global energy transition. In response to COP26 and Ghanaian CSOs’ demands for a national energy transition policy, the government launched the National Energy Transition Committee (NETC) in December 2021. The committee is tasked with developing a national policy document on steps the country can take to successfully navigate global energy transition. The NETC is also tasked with conducting a nationwide consultation on Ghana’s energy transition. At the first regional forum organized by the Ministry of Energy on behalf of the NETC, Vice President Dr. Mahamudu Bawumia said the NETC’s nationwide consultations are key to success: “We need to develop plans and implement options that people can relate to.” He also stressed the importance of equal opportunities for all citizens to enjoy the benefits of the energy transition and ensure social justice in the process.

    Essential elements for Ghana’s approach

    The establishment of the NETC is an important and valuable first step. The following recommendations, if adopted, would put the committee on track to deliver a successful energy transition plan:

    Include all voices. Ghana’s plan should be inclusive and leave no citizen behind. The plan should address how government will support local economies with relevant training, technology and finances to take advantage of the new opportunities in the transition.

    Enlist experts. The NETC should engage sector experts working on the energy transition to help ensure that the plan is informed by data and technical analysis.

    Promote open dialogue. Open and honest engagement between all relevant stakeholders will help build consensus and ownership around a transition pathway that is widely considered by citizens as viable and necessary. A shared understanding of the risks and opportunities of the energy transition is critical to agree on a shared strategy.

    Plan in harmony and coordination with existing policies. The energy transition plan should harmonize existing policy objectives and remedy the systemic inefficiencies in existing policy implementation.

    Improve governance of climate finance. The Ministry of Finance should spell out the role of international climate finance in energy transition planning and interrelate the energy transition plan with Ghana’s (conditional) nationally determined contributions under the Paris Agreement. Across the board, this requires building the state’s capacity to receive and deploy international climate finance.

    Take a critical and dynamic approach to energy options. The transition plans must address Ghana’s growing energy needs. Decisions about energy sources and related services should be based on analyzing different solutions over the long term, mindful of the likelihood that many factors (such as the competitiveness of renewables and gas) may change quickly over the coming decade. Accordingly, the NETC should review the role of fossil gas over the course of the transition—not assume from the outset that gas will be a constant.

    Assess implications for existing institutions. Ghana’s energy transition plan should consider the role of existing institutions such as GNPC in light of the long-term, macro pathway, rather than starting with assumptions about their purpose and role. Making the right investment decisions will require transparency and robust risk assessment.

    Nafi Chinery is the West Africa (Anglophone) regional manager at the Natural Resource Governance Institute (NRGI).

  • Liabilities of most SOEs more than doubled in 4yrs – Mould

    Liabilities of most SOEs more than doubled in 4yrs – Mould

    Adnan Adams Mohammed

    A former Chief Executive Officer of a State Owned Enterprise, Ghana National Petroleum Corporation, has painstakingly shown keen interest in the SIGA 2020 Report.

    The finance and energy expert, Alex Mould has, thus, summarised the liabilities of the major SOEs in the country to help in critical scrutiny of the performance of the SOEs. In the summary, it was clear that, most of the SOEs more than doubled their arrears payments or liabilities. The heavily indebted were GNPC, Ghana Cocoa Board (COCOBOD) and Electricity Company of Ghana (ECG). These companies have their liabilities exceeding GHC10.0 billion within a period of four years from 2016 to 2020.

    Some critics of the performance of GNPC are surprised why the corporation recorded a net loss of GHC1.6 billion in 2020 after recording a net profit of GHC204 million in 2019. Also, its direct cost, which was GHC2.4 billion in 2019 surged to GHC4.3 billion in 2020, a whopping 78% increase. The critics demand for convincing explanation from GNPC on its performance over the years.

    “GNPC must explain this financial performance at a time when it also spent ₵200M on ‘Corporate Social Responsibility’”, Bright Kwashie Dzokoto, a tax expert and a member of Tx Justice Coalition demanded. “This accountability-free regime must end.

    Below are the highlights of the liabilities:

    1. ECG

    Moved from GHC6.0 billion to GHC15.0 billion in 2016 to 2020. ECG’s liabilities are mainly trade creditors payable to Independent Power Producers (IPPs).

    2.  GACL

    Moved from GHC740 million to GHC2.0 billion in 2016 to2020. These arrears are mainly to banks. 

    3.  COCOBOD

    Here, the liabilities which are mainly bank loans, moved from GHC295 million to GHC10 billion within same period (2016-2020).

    4. GRIDCO

    Liabilities mainly owed to VRA/IPPs and PURC, moved from GHC485 million to GHC1.33 billion.

    5. Ghana Gas

    These liabilities mainly trade payables owed to GNPC, moved from GHC4.8 billion to GHC9.7 billion in 2016 to 2020.

    6.  GNPC

    Their liabilities were mainly in three folds; moved from GHC3.5 billion to GHC11.4 billion. The folds were: mainly trade creditors which moved from GHC237 million to GHC5.5 billion; loans of  GHC1.3 billion to GHC3.0 billion; and advance payment by GoG to Eni for unpaid gas amounting to GHC2.3 billion.

    7. Ghana Water

    The liabilities mainly made up of trade creditors and loans of GHC4.2 billion; jumped from GHC745 million to GHC6.2 billion.

    8.  TOR

    The arrears of TOR increased from GHC3.7 billion to GHC4.6 billion. These was made of mainly Trade Creditors of GHC3.0 billion and loans plus ESLA amounted to GHC1.6 billion.

    9. VRA

    The total liabilities moved from GHC7.5 billion to GHC9.7 billion. These were mainly trade payables which grew from GHC4.2 billion to GHC6.8 billion while its borrowings dropped from GHC3.1 billion to GHC1.0 billion.