Deputy Minority Leader Emmanuel Armah-Kofi Buah has said that there was no transparency in the agreement between the Ghana National Petroleum Corporation (GNPC) and the Genser Company Limited for the combined gas and pipeline infrastructural project.
His comments come after the Parliamentary Select Committee on Mines and Energy found no evidence of any losses from the deal, concluding an investigation into unfounded claims of irregularities.
The investigation was initiated in response to claims made by the African Centre for Energy Policy (ACEP) and the IMANI Center for Policy and Education in July 2022, alleging incorrectly that the deal incurred a loss of $1.5 billion for the nation. The Committee’s report instead found benefits for Ghana far exceeding that sum.
The ACEP and IMANI reports raised concerns over a Gas Sales Agreement (GSA) between GNPC and Genser Energy Ghana Limited (GEGL), asserting that Ghana stood to lose the “whopping and galactic sum of $1.5 billion” due to this arrangement.
The allegations raised by ACEP and IMANI claimed GNPC sold gas to Genser at significantly reduced rates compared to its purchase price, resulting in a perceived subsidy.
Following an 11-month-long investigation, the Parliamentary Committee has refuted the claims made by ACEP and IMANI, stating that the GSA is not a “sweetheart contract.”
The Committee found the computation methods used by ACEP and IMANI faulty. The CSOs calculated a hypothetical loss based on the contractual sum of $2.79/MMBtu. But that price reflects offsets from a capacity charge of $3.29/MMBtu.
The Committee found the arrangement much to the nation’s benefit, presenting 11 key economic advantages associated with the deal ranging from energy security to job creation; from the development of future industries to foreign direct investment.
But in a statement, Mr Armah-Kofi Buah who is also a Member of Parliament of Ellembelle said “The Minority believes that the issues are now appropriately presented before Parliament and demand thorough appraisal. It is, therefore, unfortunate that the Chairman of the Mines and Energy Committee [Samuel Atta Akyea] hastened to put the report into the public domain while a new referral was pending.
“Transparency and accountability should be the guiding principles in this process, especially as any premature public statements can potentially compromise the integrity of the new referral which is in the pipeline. On behalf of the Minority colleagues on the joint committee of Finance and Mines and Energy, we pledge to unravel all the flaws in the agreement to guarantee value for money.”
Below is his full statement…
THE GNPC-GENSER AGREEMENT: CLARIFYING THE POSITION OF THE MINORITY IN PARLIAMENT.
I write on behalf of the Minority in Parliament and to state emphatically that the Ghana National Petroleum Corporation (GNPC)-GENSER agreement requires an urgent review to ensure a level playing field for all industry players and transparency in gas pricing.
The call for a thorough review of the agreement is premised on the following grounds:
- The Minority Group is concerned that the agreement combines the Gas Sales Agreement (GSA) and the Gas Transmission Agreement (GTA), which does not ensure transparency in the pricing of gas.
- The shifting of the agreement from Ghana Gas company and the signing of the agreement by GNPC when Ghana Gas is supposed to be the national gas transmission utility.
- The discount given to GENSER by GNPC for the gas transmission agreement and GNPC’s inability to explain satisfactorily how this discount will be recovered.
We appreciate the timely intervention by the Rt. Hon. Speaker to rope in the finance committee to work jointly with the Mines and Energy Committee to deal with these outstanding issues to ensure that Ghana is not shortchanged.
The Minority believes that the issues are now appropriately presented before Parliament and demand thorough appraisal.
It is, therefore, unfortunate that the Chairman of the Mines and Energy Committee hastened to put the report into the public domain while a new referral was pending.
Transparency and accountability should be the guiding principles in this process, especially as any premature public statements can potentially compromise the integrity of the new referral which is in the pipeline .
On behalf of the Minority colleagues on the joint committee of Finance and Mines and Energy, we pledge to unravel all the flaws in the agreement to guarantee value for money.
We take this position with a firm conviction that the heart and soul of Ghana’s future lies in our energy security and all the critical issues related to it, including transparent gas pricing.
I have personally dedicated my political career towards building robust energy security for our country since I had the opportunity to serve on Ghana’s first-ever gas task force as Deputy Energy Minister under President John Evans Atta Mills which led to the establishment of Ghana Gas and the development of the country’s gas infrastructure and supervised the historic construction of ENI’s OCTP gas-power project as Energy Minister under President John Mahama.
These projects have had a transformative impact on our country’s energy sector and I take great pride in the instrumental role I played in their successful implementation. It is certainly a record I intend to jealously guard.
The Minority in Parliament is committed to upholding the interests of the people of Ghana and believes that we must strike the right balance between private enterprise and social benefit.
We will work to encourage private sector participation in the oil and gas sector as enacted in Ghana’s Local content and Local Participation Regulations ,2013 (L.I 2204 as amended) which was championed by the government of the National Democratic Congress.
The Minority Caucus further requests that the chairman of the Finance and Energy Committees convey a meeting forthwith to consider the Speaker’s referral.
The Minority assures the people of Ghana that we will not compromise the trust reposed in us by them.
The GNPC-GENSER agreement, as it stands, raises significant concerns that cannot be overlooked.