GNPC to offload interest in JOHL to Explorco

National oil company, GNPC has started the process of assigning its interest in the Jubilee Oil Holding Limited (JOHL) to Explorco -a subsidiary of the company, the Deputy Chief Executive (CEO) of GNPC in charge of Commerce, Strategy and Business Development, Joseph Dadzie, has told parliament’s Ad hoc Committee.

According to him, the move is subject to the board’s approval, with the expectation that the assignment of interest will be completed by the end of the year.

The assignment of interest to Explorco is part of the condition of approval by the Minister of Energy for the transaction -the acquisition of the seven percent (7%) Anadarko stake.

Appearing before the Ad hoc Committee of Parliament hearing the censure motion on the Minister of Finance on Tuesday, Mr.Dadzie stated “When we mentioned to our stakeholders, the other oversight bodies, we thought we were going to buy the stake not the company but obviously the structure changed and we had to buy the company, so we going through the process.

Infact the approval we got from the Ministry of Energy was very specific that it needed to be assigned to Explorco and the board of GNPC is going through the process of assigning that. JOHL will be dissolved when the process is completed.”

The Public Interest and Accountability Committee (PIAC) in its semi-annual report on the management and use of petroleum revenues from January to June this year disclosed that the proceeds of lifting by JOHL, should be paid into the Petroleum Holding Fund, as the committee is convinced the proceeds form part of Ghana’s petroleum revenue.

Further, the Vice-Chairman of PIAC, Nasir Alfa Mohammed, who appeared before the committee to testify, said the money was rather paid into an offshore account.

However, Mr. Dadzie in his testimony before parliament’s committee when the issue of unlawful transfer of proceeds of JOHL revenue came up, he said the money was paid into Jubilee Oil Holding Limited, which was legally clothed with the authority to receive the money.

He, therefore, disagreed with PIAC that the money should have been paid directly into the Petroleum Holding Fund.

Both witnesses were testifying in response to the proponents of the censure motion against Ken Ofori-Atta on the ground of illegal payment of revenues into an offshore account, in flagrant violation of Article 176 of the Constitution.

Jubilee Oil Holding Limited, made its first oil lifting of 944,164 barrels of oil in the Jubilee Field in the first half of 2022.

The amount was realised from the lifting of 944,164 barrels of oil from the Jubilee fields and Anadarko CWTP Company in the first half of 2022.

The GNPC Deputy CEO said it was not the GNPC that set up Jubilee Oil Holding Limited but rather Anadarko Company.

He said Jubilee Oil Holding Limited was set up because Anadarko decided to sell its stakes in the Ghana assets and reached an agreement with Kosmos to purchase it.

The Ghana government, he said, then made a submission that it wanted part of that stake, and after negotiations, “we agreed on seven per cent”.

With strict timelines for the consummation of that transaction and the need for the GNPC to go through the approval process, Mr Dadzie said, Anadarko decided to sell Jubilee Oil Holding Limited, carving out the seven percent for the GNPC to acquire later on.

“We got the necessary approvals and we were ready to buy Jubilee Oil Holding Limited, so the structure of the transaction was not a GNPC-defined structure but that of the seller (Anadarko Company).

“We did not buy a participating stake; we rather bought the company which held seven percent in Jubilee and TEN,” he said.

Acquisition

On where GNPC got the funds to buy Jubilee Oil Holding Limited, Mr Dadzie said the corporation wrote to the Ministry of Finance to advance it a loan towards the purchase and obtained approval from the ministers of Energy and Finance.

On the quantity of oil lifted by Jubilee Oil Holding Limited so far, he said: “We have lifted in total $153 million.”

“Jubilee Oil Holding Limited is a 100 percent subsidiary of the GNPC and we believe it is a company registered under the Companies Act and obviously the terms and conditions, as well as the constitution of Jubilee Oil Holding Limited, are governed by that act, not the Petroleum Revenue Management Act.

“For that reason, 100 percent of that revenue cannot be paid into the Petroleum Holding Fund. Jubilee Oil Holding Limited must operate, and if at the end of the day it declares profit and the directors decide dividends must be paid, that money is paid to the GNPC, which will pay it into the Petroleum Holding Fund,” Mr Dadzie said.

Responding to a question on which of the allegations related to the finance minister, he said: “As far as Jubilee Oil Holding Limited is concerned, the Finance Minister is not responsible for the revenues.”

“Obviously, we have to, at the end of the day, submit our financials and pay whatever asset tax there is to the GRA. In 2021, Jubilee Oil Holding Limited paid GH¢17 million to the GRA as tax on its operations.

“So, as far as revenue is concerned, I do not think the Finance Minister has any direct control over revenue,” he declared.

Asked if the $100 million was paid into an offshore account, Mr Dadzie said: “Yes, it was paid into an account at the Ghana International Bank in London by the buyers of the crude.”