Aker Deal: Akufo-Addo’s government has caused financial loss to the state - Alex Mould

BY JOSEPHINE KUUBAIBONG - May 09, 2019 at 1:57pm 100 COMMENTS

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A former Chief Executive Officer of Ghana National Petroleum Corporation, Mr. Alex Kwesi Mensah Mould has accused the Akufo-Addo government of causing financial loss to the state in the current Aker deal suspecting Ghana has been shortchanged

At a Public Forum organized by Caucus for Democratic Governance in Accra, Mr. Alex Mould who was the main speaker expressed his utter dismay as to why the government rejected the offer of an additional 10% interest in the Hess block. This he said was after it had been approved by the GNPC board and included in both the 2015 and 2016 budget but was conspicuously missing from the final budget presented in mid-2017.

Explaining why GNPC did not purchase the interest when it was approved by parliament in the 2015 and 2016 budget, the former GNPC boss explained that it was due to the maritime dispute between Ghana and Ivory Coast at the International Tribubal for the Law of the Sea (ITLOS) and so Hess had decided to delay the Plan of Development (PoD) until the outcome of the ITLOS case.

Mr. Alex Mould could not understand why GNPC would write to Hess informing them that it would not exercise the option to purchase the 10% interest in the Block due to lack of funds when GNPC had over $150M in cash on their balance sheets as of the end of 2016. He said

“Considering what GoG stood to gain from the 10% interest, one cannot help but wonder why all options and possibilities were not exhausted before getting to this point. For example, was there any economic analysis done by GNPC to validate why the 10% interest should not be taken up? Was Approval sought from Minister who had given GNPC the original approval to pay for the 10% Interest in the Block? If so, did Minister get his approval from Cabinet? Was the Minister of Finance aware that GNPC had turned down an option to acquire 10% of the Block? Because if the issue alone was that GNPC did not have the funds then MoF could have been asked to fund on behalf of GoG. Lastly was Parliament informed that GNPC would not take up the option?? If the answer is no to any of these questions then the letter that was sent to Hess/Aker was illegal as it did not have the authority to say that GoG was no longer exercising the option to purchase the 10% Interest in the Block.”

Mr. Mould opined therefore that the decision to not exercise the option of purchasing the 10% interest could never have been in the best interest of the country and therefore amounted to causing financial loss to the state.

Background

In 2014 when Lukoil bought interest in Hess Block (DWT/CPT) Government negotiated and agreed with Hess on granting GoG an option to acquire 10% of the Block .

The Minister approved the Lukoil farm-in into the DWT/CTP Block Operated by Hess in 2014 on two main conditions:

That they needed to abide by new law that required a local partner should take up a min of 5% ; this was despite the fact that Hess themselves were grandfathered just as Tullow, Kosmos and Eni were

The second condition was that government would increase its Interest from the original 10% Carried to 20% by taking an option to acquire a 10% paid Interest.

GNPC was designated as the government entity to handle acquisition and formed a subsidiary called EXPLORCO to hold GoG’s additional interest, with the aim of maximizing Ghana’s revenue from the find.

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In 2017, government through GNPC however wrote to Hess that it was no longer interested in purchasing the 10% paid interest due to lack of funds.



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