GNPC demands urgent parliamentary approval of $1.65b for oil exploration

• Energy Minister Matthew Opoku Prempeh makes the demand in a memorandum for GNPC

• GNPC hopes to produce an extra 200,000 barrels of crude oil and wants parliament to treat the request as urgent

A $1.65 billion loan request has been tabled in parliament to enable the Ghana National Petroleum Corporation (GNPC) to purchase two stakes in Ghana’s offshore fields.

According to citinewsroom.com, the Minister for Energy, Matthew Opoku Prempeh, made this known through a memorandum he submitted to parliament for consideration and approval.

The report added that the GNPC, through its GNPC Explorco, is able to participate in the sector’s upstream petroleum.

Details of the memoranda said that the company seeks approval to purchase a 70% stake in the South Deep Water Tano (SDWT) operated by AGM Petroleum Ghana Limited.

Also, the company seeks to purchase a 37% stake in the Deep Water Tano/Cape Three Points (DWT/CTP) operated by Aker Energy Ghana Limited, allowing it to form a joint operating company with the two entities.

“Provision of a loan not exceeding US$1.65 billion to finance the acquisition at a price to be negotiated which might not exceed US$1.3 billion and GC Explorco share of capital expenditure (CAPEX) to Pecan Phase 1 First Oil of US$350 million,” it stated.

In its argument, the GNPC said that entering these partnerships is critical because prevailing situations such as the exiting of oil majors from the country required that it builds its capacity as well as take up a large part of the exploration activities before Ghana’s oil reserves hit a terminally declining level.

“With the shift away from investments in oil and gas into renewable, Ghana faces the risk of stranded assets and dwindling proven reserves if GNPC is unable to undertake exploration, development, and production alone. A declining industry undermines growth, diminishes revenue expectations for Ghana and makes redundant the stock of skilled labour in the industry which Ghana has rapidly built up over the decade,” it continued.

Also, it explained that it urgently needs parliamentary ratification because the move is “all the more needed and urgent.”

Should this go through, the GNPC has stated that it will be able to, within four to five years, produce an extra 200,000 barrels of crude oil from the partnership.

In the meantime, Cabinet has already granted approval for this deal to go through.