Prof Hinson lists 9 falsehoods in Bright Simons’ GNPC deal analysis

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Prof Robert Ebo Hinson of the University of Ghana Business School has said that Imani’s Honourary Vice President Bright Simons peddled falsehood when he stated that Aker and TRG have spent only $300 million on its blocks at the Deep Water Tano/Cape Three Points.

“It would seem that Mr Simons has been skimming through the annual reports of Aker and TRG looking for spendings by Aker Energy and AGM. However, he seems unaware that Aker Energy and AGM have debt and commitments not listed in the annual accounts of their parent companies. Verifiable figures from the GNPC suggests that Aker Energy and AGM have spent between US$ 700 million to US$ 800 million on the blocks,” Prof Hinson stated.

“Another claim by Mr Simons that there are considerable richer discoveries made in Ghana that have not been commercialised, like Wawa and Akasa, and the Erin Energy block, has also been described as false.

“It is unclear why Mr. Simons claims that these fields are richer than Pecan and Nyankom. These fields cannot be described as ‘richer discoveries’ by any stretch of the imagination.

“According to Woodmac, the Akasa field was downgraded to sub-commercial, the Erin Energy block holds no fields bigger than 40 million barrels and Wawa holds 50 million barrels plus gas. Clearly none of these discoveries are anywhere close to Nyankom and Pecan in Mr. Simons’ chosen world of ‘richer discoveries’. For the avoidance of doubt, Woodmac lists Nyankom at around 130 million barrels,” Prof Hinson stated.

Prof Hinson clarified 7 other points he said have been misrepresented by Mr Simons.

Read them below.

“Most analysts nowadays use a US$ 50 per barrel oil price”. FALSE

Mr. Simons makes this categorical statement without listing any of the analysts he refers to. These are easily verifiable figures which should have been checked before they were published. The long term price forecast by various anlaysts (all in US$ per barrel) are:

Morgan Stanley – 60

Credit Suisse – 60

RBC – 67

Commerzbank – 70


JP Morgan – 60

Deutsche Bank – 60

UBS – 60

HSBC – 63

IHS – 67

Not a single one uses US$ 50 per barrel. With the current oil price of US$ 72 per barrel, it is pretty far fetched to have a valuation figure of US$ 50 per barrel.

Kjell Inge Rokke has a windfall of more than US$ 1 billion. FALSE.

This is false because it ignores the US$ 800 million spent by the Aker owner to add approximately 267 million barrels of oil to the two blocks. Moreover, it is profoundly inconsistent with Mr. Simons’ own claim that, US$ 300 million has been spent on the two blocks. Using Mr. Simons’ own analysis, if the price is set at a maximum of US$ 1.1 billion and US$ 300 million has been spent so far, how can the windfall if at all, be more than US$ 1 billion? This is yet another misrepresentation.

Aker was founded in 2004. FALSE.

Aker was established more than 175 years ago and its history is clearly stated on the Aker website,

Lambert Energy had no access to audited reservoir data. FALSE

Mr. Simons claims that, the independent third party Lambert Energy did not have access to audited reservoir data for the two oil blocks. That is factually incorrect, as third party reservoir data was available in the virtual dataroom used for the valuation. My sources within the civil society space confirm to me that, on a call with Lambert Energy, Mr. Simons said himself that he had not been able to listen fully due to conflicting engagements. On this point,it would seem that Mr. Simons does have a full grasp of the facts, and can therefore not make the categorical claim he makes. His pronuncements do not represent the facts.

GNPC will merge the fields. FALSE.

Mr. Simons claims that GNPC is to merge the fields and create an SPV. How can two fields be merged, physically? Again, Mr. Simons makes this postulation to fit his narrative. GNPC is only saying that the joint operator company will be the operator of both fields. The fields and the licenses cannot be merged; that is not possible legally under Ghanaian legislation nor physically unless there is contact between the fields.

The commerciality of the fields are broadly unchanged since 2018. FALSE.

Mr. Simons seems to be ignoring the widely published fact that, in 2018, Aker first added 100 million barrels of oil to the Pecan discovery and then in 2019, discovered 167 million barrels of oil in Nyankom. These investments completely improved the commercial viability of the fields. Also, Aker made the cost of developing the Pecan field cheaper, thereby increasing profitablity. Aker acheived this by reducing the break-even from US$ 45 per barrel to US$ 30 per barrel in the new development concept.

Prior to the outbreak of COVID-19 which disrupted the global oil and gas supply chain, Aker was ramping up for a Final Investment Decision on the Pecan Field. In line with this, in early 2020, a Letter of Intent had been issued to Yinson for the construction of the FPSO for the Pecan Field development. Also, Fugro had been appointed to perform geophysical and geotechnical survey to optimise the Pecan subsea field layout.

The owner of Aker said that, he and his partners would spend US$4.4 billion to produce oil, then changed his mind and settled on $2.5 billion. FALSE.

Low oil prices experienced in 2020 following the outbreak of Covid-19 revealed that the earlier proposed development concept for the Pecan Field worth US$ 4.4 billion with a breakeven price of US$ 45 per barrel was not commercially viable. This necessitated a revision to a phased development concept with a break-even of US$ 30 per barrel making the project more commercially viable.