GNPC reacts to ACEP’s claim of selling 7 percent stake to offshore company

GNPC-CEO-KK-Sarpong

ASSERTION 1 

The Corporation has not communicated how it intends to finance the US$199 million acquisition,  leading to speculations of illegality in breach of the Petroleum Revenue Management Act, as  amended. 

RESPONSE 

The funds used to acquire the 7% Joint Operating Agreement (commercial) interest of Anadarko  WCTP Company in Jubilee, DWT and WCTP was advanced by the Ministry of Finance. As  communicated to the Ministry of Finance, the advance would be fully repaid with interest by GNPC  Explorco or Jubliee Oil Holdings Limited (“JOHL”) from proceeds of crude sales or funding raised on  the debt market.  

ASSERTION 2 

The Corporation has set up an offshore company in the Cayman Islands to hold the 7% commercial  interest rather than owning it directly or through a subsidiary in Ghana. This raises the bar on opacity  and worsening accountability associated with the Corporation.  

RESPONSE

a. The Corporation has not set up any offshore company. The facts of the matter are as follows: a. Anadarko Offshore Holding Company LLC (“Anadarko Offshore”) sought to wind up its  operations in Ghana. Its subsidiary, Anadarko WCTP Company (“Anadarko WCTP”) (an  offshore company registered in Cayman Islands that holds Anadarko’s interest in Jubilee,  

Deepwater Tano (DWT) and West Cape Three Points (WCTP)) was to be sold to Kosmos Energy Holdings Ghana Limited (“Kosmos”). The Corporation expressed an interest in  acquiring part of Anadarko WCTP’s interest in the DWT and WCTP petroleum agreements  and notified Ministry of Energy. The Parties entered negotiations to determine the  Corporation’s share, and it concluded with an offer to the Corporation to purchase the  7% commercial interest.  

b. To enable the negotiations with Kosmos for the sale of Anadarko WCTP to proceed,  Anadarko Offshore incorporated a company, Jubilee Oil Holdings Limited (“JOHL”), in the  Cayman Islands to hold the 7% commercial interest in the interim while the parties  negotiated and finalised the commercial terms of the transaction. 

c. The parties proceeded to negotiate the commercial terms of the sale and purchase of  the 7% commercial interest. The headline purchase price as of 1st April 2021 was quoted  as US$199million. This price was adjusted to US$165 million effective 30th September  2021, following adjustments for cash calls, taxes and other expenses incurred as well as  sales made by Anadarko WCTP within the period.  

d. Anadarko Offshore, the Seller, was eventually paid US$164,798,691.00 on 19th October  2021 in full settlement of the acquisition. Anadarko Offshore thereafter assigned JOHL  to GNPC, as JOHL holds the 7% commercial interest. 

e. The Corporation is currently in the process of transferring JOHL to GNPC Explorco. It was  never a ploy by the Corporation to ‘live unto itself, not the law and the nation’s strategy  for its existence’ as claimed by ACEP. 

ASSERTION 3 

Holding on to the assumption that GNPC owns Jubilee Oil Holding Limited, it is still not enough for  the company to transact business in Ghana’s oil industry without registering with the Registrar  General. 

RESPONSE 

The Corporation is in the process of registering JOHL as an external company in Ghana.

ASSERTION 4 

GNPC at the time of communicating to the public knew that its intention was to assign the interest  to a company called Jubilee Oil Holdings, registered in the Cayman Islands, with Dr K.K. Sarpong and  Mr. Freddie W. Blay as directors. ACEP’s search has not yet ascertained beneficial owners of Jubilee  Oil Holdings.

It is important to note that the representation of the CEO and Board Chair of GNPC,  with their names in the General Registry of Cayman Islands, is not enough proof that GNPC is the  owner of the Jubilee Oil Holdings. 

RESPONSE 

Anadarko Offshore incorporated JOHL with its own directors. At the time of the sale and purchase,  the Corporation was required to nominate two directors to take over after the transfer was effected.  The Board of Directors of the Corporation therefore nominated the Board Chairman, Honourable  Freddie Blay, and the Chief Executive Officer, Dr. K.K. Sarpong, as initial Board directors to replace  the directors of JOHL appointed by Anadarko. 

The Corporation holds one hundred percent of the shares in JOHL. The beneficial ownership of JOHL  can be ascertained by conducting a general search with the Cayman Islands Registry. Further, the  Share Purchase Agreement entered into on 13th October 2021, between Anadarko Offshore and  Ghana National Petroleum Corporation show that the shares of JOHL belong to the Corporation as  the Buyer. 

ASSERTION 5 

The PRMA, since its inception, has suffered many accountability challenges. But for any revenue to  be encumbered outside the express dictate of the law will be the final nail in the coffin of the Act, a  precedent that will undermine the very existence of the Act. There is no individual, institution or  authority clothed with the power to appropriate petroleum revenue outside the PRMA, even if the  act can be justified as necessary. 

RESPONSE 

The Corporation has always operated within the remit of the laws and regulations of the Petroleum  Industry, including the Petroleum Revenue Management Act, as amended, and has no intention of  doing otherwise. JOHL was duly incorporated under the law of the Cayman Islands by Anadarko 

3 Offshore in line with the legal framework under the governing petroleum agreements. The  Corporation is in the process of registering JOHL as an external company in line with Ghanaian law. 

CONCLUSION 

The Corporation continues to operate within the remit of the legal framework and has no intention  of flouting any legal requirements and procedures. As the Corporation has always indicated, the  Corporation welcomes engagement with any stakeholder in its operations. All documents on the  transactions are available for scrutiny and inspection. 

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