Former GNPC Boss, Alex Mould has described as shameful, Parliament’s approval of the amendment to the AGM petroleum agreement despite all the questions surrounding it.
According to him, AGM’s push for the agreement which was first signed in 2013 to be amended even without any substantial work on the block was against international standards in the industry.
Parliament last Friday ratified the AGM petroleum agreement.
Speaking at a forum organized by the Caucus for Democratic Governance, Ghana, Alex Mould said AGM’s request should not have been considered.
“It seems that AGM has been given a new lease of land through a sole retender and Government has reduced its stake from 49% to 18%. Be mindful that AGM was originally given this block from a competitive tender and 3 other companies that are changing the terms before they start work is akin to our controversial road contractors who bid slowly only to come back before the work starts and add to the variation.”
“Even in road contracting, this is not allowed. Also, it is our understanding that the original local content partner is being replaced by a new local content partner called Quad Energy. This company was set up months ago before Minister of Energy brought this ridiculous amendment to Parliament and they shamefully approved given the questions and issues raised.”
Details of amendment
Parliament approved the amended deal with AGM Petroleum for oil exploration in the Deep South West Tano oil block during an emergency sitting last week.
The critical decision to accept the recommendations of Parliament’s Mines and Energy Committee was made through voice vote supervised by the Speaker, Prof Aaron Mike Oquaye, amidst opposition from the National Democratic Congress (NDC) minority.
Under that agreement, Ghana will receive 10% royalties.
In addition, the Ghana National Petroleum Corporation (GNPC) will secure 10% free carried interest.
Also, GNPC will benefit from additional participating interest of 15%.
GNPC’s Exploration and Production Company Limited (Explorco) will also get 24%.
The existing Petroleum Agreement gives Ghana a potential 43% stake, made up of Carried and Participating Equity Interests of 25% and a Commercial Interest of 24% of the remaining 75%.
NPP-led govt renegotiated agreement
However, per the renegotiated agreement ratified by Parliament, Ghana’s 10% royalties has been maintained.
However, the free carried interest of GNPC has been increased to 15%.
Under the newly approved agreement, GNPC’s additional interest has also reduced to 3%, but GNPC’s Explorco will not take up shares in the new agreement.
