Joint Committee recommends approval of US$1.45 billion loan for GNPC

Parliament’s Joint Committee of Finance and Mines and Energy has recommended to the House to approve a request submitted by government for the Ghana National Petroleum Corporation to borrow US$1.45 billion to acquire significant stakes in two oil blocks and finance capital expenditure on another field.

The committee’s report on the request said after diligently analysing the risks and benefits of the transaction, members agreed by consensus that GNPC, through its subsidiary GNPC Explorco, should acquire a 37 percent equity stake in the Deep Water Tano/Cape Three Points (DWT/ CTP) block operated by Aker Energy Ghana Limited and a 70 percent equity stake in the South Deep Water Tano (SDWT) block operated by AGM Petroleum Ghana Limited.

The acquisitions will cost not more than US$1.1 billion, while GNPC Explorco will borrow US$350 million to finance its share of the capital expenditure towards achieving first oil from the Pecan field.

The committee recommended, however, that the terms and conditions of the loan for the acquisition of the shares should be brought to Parliament for consideration, pursuant to Article 181 of the Constitution.

Similarly, the petroleum agreement between GNPC Explorco and Aker Energy/ AGM shall be laid in Parliament for consideration, pursuant to Article 268 of the Constitution and the Petroleum (Exploration and Production) Act, 2016 (Act 919).

Among the benefits to be derived from the transaction, the committed noted, include an opportunity for GNPC to build its operator capacity to ensure that Ghana’s hydrocarbon resources are fully explored and developed.

The transaction will also support the actualisation of the Ghana Beyond Aid development agenda by boosting oil production, creating employment, and generating fiscal revenue of about US$6.5 billion in nominal value over 15 years.

Currently, Ghana has 18 petroleum agreements, out of which three are producing fields and five are discoveries.

The committee’s report said the national oil company has to be supported to develop its operatorship capabilities if Ghana is to benefit from its untapped natural hydrocarbon resources.

Partnership with AKER Energy and AGM, with proven deep water capabilities, therefore provides such opportunity for GNPC to develop its operatorship capabilities, the report added.