GNPC disagrees with PIAC on $100 million

Censure Committee Sitting:
Politics Gnpc Parliament

The Ghana National Petroleum Corporation (GNPC) says it disagreed with the Public Interest and Accountability Committee (PIAC) on the $100.7 million petroleum lifting revenue, which the later claims was not paid into the Petroleum Holding Fund.

Mr Joseph Dadzie, GNPC Deputy Chief Executive Officer in-charge of Commercial, said the Corporation disagreed with the PIAC report because the money was supposed to be paid to Jubilee Oil Holding Limited (JOHL) and not the Petroleum Holding Fund.

He said the amount was realized from Jubilee Oil Holding Limited’ (JOHL) first lifting of 944,164 barrels of oil on the Jubilee Field in the first half of 2022.

He explained that JOHL was not set-up by GNPC but by Anadarco, which later decided to sale its stake.
Speaking at the public hearing of the Parliamentary Ad-hoc Committee on vote of Censure of Mr Ken Ofori-Atta, Finance Minister, Mr Dadzie said JOHL was set-up because Anadarco decided to sell it stakes in the Ghana assets and reached agreement with Kosmos (Energy) to purchase.

“Ghana Government then raised a submission that we wanted part of that stake and so, after negotiations we agreed on 7 per cent,” he said.

“Now what happened was, they had a time line, you know typically if you these Multinational enterprises (MNEs) you work with according to strict time lines. So, there was time line for consummation of that transaction and because GNPC needed to go through the needed approval process, Anadarco then decided to set-up JOHL, carve out the seven per cent holding for GNPC when we are ready for its acquisition and then they went ahead and consummated that transaction with Kosmos.”

He said when GNPC got the necessary approvals and were ready, they had to buy Jubilee Oil Holding; stating that “So, the structure of the transaction wasn’t a GPNC, what do you call it, defined structure that was defined by the seller and we obviously had to buy the Company. So, what we bought was the Company’s shares, we didn’t buy this.”
Mr Dadzie said: “I think to clarify what PIAC was saying, we did not buy this, we didn’t buy the participating interest, we bought the Company which held the seven per cent shares of Jubilee in TEIN”.

When Dr Dominic Akuritinga Ayine, Co-Chairman, Parliamentary Ad-Hoc Committee on Censure/the National Democratic Congress (NDC) Member of Parliament (MP) for Bolgatanga East asked Mr Dadzie how GNPC got the money to buy the shares, he responded that GNPC “wrote to Ministry of Finance to advance this money, a loan towards the purchase and we were very clear that were going to pay back the money”.

Dr Ayine then sought to know whether the money advanced by the Ministry was an interest free loan, Mr Dadzie said GNPC was to pay interest on it.

Dr Ayine then tried to find out if GNPC got Parliament’s approval for the loan to which Mr Dadzie responded that they got approval from “our sector Ministry (Energy Ministry) and obviously the Finance Ministry.”

Mr Dadzie said JOHL was 100 per cent subsidiary of GNPC and that they believe it was a company registered under the Companies Act and obviously the terms and condition as well as the constitution of JOHL was governed by the Companies Act, not Petroleum Revenue Managing Act.

“For that reason, 100 per cent of that revenue cannot be paid into the Petroleum Holding Fund. The JOHL 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 GNPC which will pay that into Petroleum Holding Fund,” Mr Dazie said.

Touching on the allegations against the Finance Minister, Mr Dadzie said as far as JOHL was concerned, the Finance Minister was not responsible for the revenues.

“Obviously, we have to, at the end of the day, submit our financials and pay whatever asset tax to GRA. In 2021, JOHL 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 of revenue,” he said.
Mr Dadzie said the $100 million was paid into an offshore account at the Ghana International Bank in London by the buyers of the crude.

Mr Kobina Tahir Hammond, Co-Chairman of the Parliamentary Ad-Hoc Censure Committee/New Patriotic Party (NPP) MP for Adansi-Asokwa, urged the Management of GNPC to resolve all outstanding issues of the Corporation so that sanity could prevail.

The GNPC Team, which included Mr Dadzie, Mr Benjamin Kweku Acolatse, Deputy Chief Executive in-charge of Finance and Administration and Madam Adwoa Afriyie Wiafe, General Manager Legal and Compliance was at the Committee’s sitting to respond to Ground Three of Minority Caucus’ Motion, which alleges illegal payment of oil revenues into offshore accounts in flagrant violation of Article 176 of the 1992 Constitution.
The Committee has since adjourned sitting to Friday, November 18.

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