27th May 2024

Mohammed Amin Adam, a Deputy Minister for Energy briefs the media

The Ministry of Energy has pointed out that the opposition NDC cannot claim credit for the growth in the government’s take in energy contracts.

“All the petroleum agreements that are producing crude oil in Ghana were signed by the Kufuor administration…that all the thirteen petroleum agreements that came to force under the NDC had enhanced fiscal terms and increased national stake,” Dr Amim Adam, a Deputy Minister of Energy, said on Friday.

“If those Petroleum Agreements did not have enhanced fiscal terms, that would have been problematic because they were signed after several discoveries of crude oil, an indication of relatively de-risked basins,” he added.

The Deputy Minister said this at a media interaction last Friday, in response to an NDC press conference on the energy sector.

NDC claims

The NDC had claimed, among other things, that it adopted policies and programmes to ensure the nation consistently increased its share in most petroleum agreements that were negotiated.

It also claimed that Ghana’s share in the three oil-producing fields kept increasing – from 13.6 per cent to 20 per cent.

According to the NDC, this incremental sequence in the growth of Ghana’s shares under its government clearly demonstrates a conscious and consistent effort to increase Ghana’s stake in petroleum agreements.

The agreement

But according to Dr Amin Adam, the NDC failed to understand the conditions of the market at the time it signed these agreements.

The 13 agreements signed by the NDC, according to him, were signed between 2013 and 2016, adding that out of these, the only companies that have met their minimum obligations are ENI and Springfield.

“AGM had to change ownership under the NPP Government before it could meet its obligations. The remaining 10 companies were to drill 11 wells. They have not drilled a single well. They were to spend $700 million, but they spent only $30 million. These are the contracts with the so-called enhanced fiscal terms,” he said.

“We have always said that zero per cent of 100 is zero. So, if you have the highest fiscal terms in contracts that do not lead to production, it amounts to nothing,” he added.

The Deputy Minister noted that the NDC, on various platforms, had attributed its failure to the ITLOS provisional judgement that froze activities during the period.

“However, it is important to note that only three of the agreements the NDC signed were affected by ITLOS – AGM, AMNI International and ERIN Agreements. Even one of the companies affected by ITLOS, AGM, has recently announced crude oil discovery,” he clarified.

BOST better now

The NDC had also claimed that it repositioned the Bulk Oil Storage and Transportation Company (BOST) and the Tema Oil Refinery (TOR) to become strong companies only for the NPP government to weaken them.

“The claim that BOST and TOR were strengthened cannot be true. Contrary to the NDCs claim that BOST was making profits during their time, the facts do not support this.

“BOST in January 2017, when the NDC handed over power, owed $624 million to suppliers, BDCs and related parties in respect of crude oil imports for processing at TOR and refined products which got lost from BOST tanks. But as at February 2020, the outstanding amount to settle to clear the books now stand at $57 million,” Dr Amin Adam said.

He further said that an audit on BOST accounts shows that, between the periods 2013 to 2016, there was a significant rise in the net losses by the company, with the highest net loss of GHC569 million recorded in the year 2016.

“The 2018 management account showed a 70% reduction in losses from the previous year, 2017. Similarly, the 2019 management account indicated a further 41% reduction in the loss level from the year 2018.

“This steady decline in the loss level of the company, from 2017 to 2019, shows that during the year 2020, the company will likely make a profit. BOST under the NPP Government is in a better position,” he stated.

Source: Daily Statesman











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