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House okays China off-taker agreement

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Posted by EVANS OSEI-BAFFOUR

Parliament has approved the controversial off-taker agreement between the Ghana National Petroleum Corporation (GNPC) and the UNIPEC Asia Company Limited after heated debates on the floor last Wednesday.

The off-taker agreement, which is under the Master Facility Agreement between Ghana and the China Development Bank Corporation, with an amount of $3,000,000,000.00, was passed by an overwhelming voice vote.

The loan agreement which is worth US$850 million aims at helping Ghana finance the construction of the proposed gas plant facility that will harvest natural gas from oilfields in the deep waters of the Western Region for domestic and industrial use.

The motion was moved by the Chairman of the Finance Committee, Mr. James Klutse Avedzi, and seconded by the NPP MP for Old Tafo and ranking member, Mr. Anthony Osei Akoto.

According to the Chairman, the committee observed that the obligation on the GNPC to supply Jubilee Crude Oil to UNIPEC Asia terminates whenever the off-taker Agreement between the Ghana National Petroleum Corporation (GNPC) and UNIPEC Asia Company is terminated.

Contributing to the debate on the floor of Parliament, Mr. Osei Akoto together with his minority counterparts called for the withdrawal of the agreement to enable the house go thorough further scrutiny.

The minority argued that the terms of the deal, which among other things require the GNPC to supply 13,000 barrels of jubilee oil per day until the loan amount is fully paid using the nation’s crude, could seriously harm Ghana’s economic interests in diverse ways.

Mr. Osei Akoto cited the Mills administration for leading the country into incurring heavy debts in the future, adding that the said agreement contravenes some key provisions as stipulated in the Petroleum Revenue Management Law which was passed and promulgate by Parliament last year.

The Minority also mentioned a provision in the agreement which indicated that the tenure of the deal is 15 1/2 (fifteen-and-half) years, instead of the 10-year ceiling imposed by the Petroleum Revenue Management Act to back their stance.

However, the Majority, in a sharp rebuttal insisted that the agreement holds the key to push Ghana into the much trumpeted industrial age promised by the Mills government.

On his part, the Deputy Energy Minister in charge of petroleum, Mr. Emmanuel Armah Kofi Buah, noted that the agreement will enable Ghana to develop in the long term with regards to the provisions made in the agreement.

He called on all to support the Mills led government to initiate and implement projects that yield better opportunities for the future generation.

The House also approved a loan deal worth US$150 million to finance the ICT-enhanced Surveillance and Monitoring Facilities for the Oil and Gas Enclave Project under the Master Facility Agreement (MFA) between the Government of Ghana and the China Development Bank Corporation (CDBC).

Parliament approved the agreement on August 26, 2011. The agreement was subsequently signed by the parties on December 16, 2011 and an Addendum to the Master Facility Agreement also approved on February 21, 2011.

“The MFA requires that the government of Ghana enters into separate subsidiary agreements with CDB in respect of each project to be implemented under the 3 billion dollar facility,” a report of the Joint Parliamentary Committee on Finance and Mines and Energy said.

“Further, Parliament in giving approval for the MFA, directed the Ministry of Finance and Economic Planning to present each subsidiary agreement to the House for approval in accordance with Article 181 of the Constitution and Section 4 of the Loans Act, 1970, Act 335,” the report said.

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