Norway’s Aker Energy, has revealed it has put on hold its Pecan oilfield development off Ghana, amid concerns the project could face sanctions over the war in Ukraine due to the involvement of Russian oil firm Lukoil.
But Founder of mPedigree, Bright Simons, has rubbished the claim by Aker Energy, asking it not to blame the war in Ukraine for its decision to postpone submission of a development plan for Pecan oilfield off Ghana.
GNPC wanted to pay Aker US$1.65 billion to acquire a 37 percent stake in the Deepwater Tano/Cape Three Points (DWT/CTP) and 70 percent interest in SDWT, but the deal got suspended over certain concerns raised by the civil society organizations, anti-corruption campaigners and media houses, including The Herald, over bribery and influencing of some Ghanaian Members of Parliament (MPs).
The deal was suspended after it was discovered that, GNPC, did not conduct any due diligence on the wells before expressing interest in them willing to cough up a massive US$1.62 billion.
In the view of Bright Simons, Aker was in no position to raise funds for Pecan.
Aker Energy, controlled by Aker ASA AKER.OL, owns 50percent in the deepwater block off Ghana where the Pecan field is located, while Lukoil holds 38percent, Ghana National Petroleum Corporation (GNPC) has 10percent and Fueltrade 2percent.
The partners, will not submit a development plan to Ghanaian authorities “until the challenges have been resolved,” Aker ASA Chief Executive Oeyvind Eriksen told a call with analysts on last week Wednesday.
Russia invaded Ukraine in February in what it calls “a special military operation”, prompting unprecedented Western sanctions on Moscow and a breakup of economic relations.
“We are continuing a dialogue with Lukoil and Ghanaian authorities about possible solutions,” Eriksen told Reuters, adding that one option was for Lukoil to divest from the project.
The Vice President of Imani, tweeted on the announcement saying, “It is looking like it is not only Ghana which can use ‘Ukraine war’ as a perfect explanation when it needs to get out of tight spots. Everyone knows Aker was in no position to raise funds for Pecan. Or is that too cynical a take?”
This was after Aker announced the postponement of the submission of a development plan amidst concern the project could face sanctions over the war in Ukraine due to the involvement of Russian oil firm Lukoil.
The Herald has been investigating a report that the Aker deal, has been whittled down to around US$300million from a high of $1.6 billion.
Sometime last year, many civil society groups and personalities challenged the GNPC-Aker deal, which had seen civil society personalities and journalists bribed by officials of GNPC and Aker to support the deal, while some Ghanaian MPs, who were supposed to be critical of the deal were sponsored on a trip to Houston – Texas for the 2021 Offshore Technology Conference (OTC) in America.
Dr Theo Acheampong, a Petroleum Economist and Political Risk Analyst, had stated at the time that the proposed $1.65bn Aker Energy/AGM–GNPC farm-out deal is overpriced.
He told Accra-based Joy FM that “in my view, there’s overpricing of the assets, the assumptions that went into the assets need to be questioned and we shouldn’t be paying for the amounts that are being quoted”
Dr Acheampong, stressed that the oil price being used i.e $65, $67 per barrel, for the transaction, is questionable.
According to him, the valuation could have been based on between $50 and $55 dollars per barrel, which will reduce the value of the entire transaction substantially.
He further stated that, after consultations with experts in the oil and gas industry, he arrived at a conclusion that the entire deal should be valued at a cost, not more than $500million.
“I have been running some numbers myself, and from consultations with persons who work in the industry both in Ghana and outside, I don’t think that the two assets are worth more than 500million dollars,” he said.
He added that, “if you run a number of the scenarios and the numbers based on the production, projections and oil prices, you’re not looking at anything more than half a billion in terms of the value and that’s where I think we have to go back to question a number of the assumptions that are really going into these numbers that are being bandied about.”
“As far as I know, nobody has certified the reserves, nobody has certified the contingent resources on the South Deep Water block, as far as I know, the commerciality of the Nyankom-1X has a big question mark around that and if all of these are taken into account, the value should be much lower,” he added.
GNPC, had claimed that the approval will allow GNPC to own significant stakes in offshore oil blocks for the first time since it was established in 1983, adding Ghana’s interest in the Aker Energy and AGM blocks will increase to 47percent and 85percent, respectively.
GNPC, has argued in its proposal to Parliament, that the new ownership structure will provide it and Ghana a firm ground to face the emerging energy transition in a well-prepared manner and create significant value for the benefit of the Ghanaian people.
Once finalized, GNPC Explorco, the commercial wing, would also become a joint operator with Aker Energy in both blocks through a new joint operator company, providing an opportunity for GNPC to acquire operatorship capacity to enable it to play a major role as an Exploration and Production company.
Bright Simons, a global thought leader, also has raised red flags over the planned acquisition of stakes in Aker Energy and AGM Petroleum Ghana oil blocks by the Ghana National Petroleum Corporation (GNPC) saying it’s mind-boggling.
In an article analyzing the developments, Mr Simons rubbished the GNPC’s reasoning for entering into the deal.
He said the GNPC’s explanation that it wants to become a major operator in the production of oil within Ghana was “plain nonsense” as it has had past opportunities.
Mr Simons, further noted that the GNPC, via subsidiaries, had not proven to be capable of bearing fruits in operations at South Deep Water Tano (SDWT) and the Offshore South West Tano Block (OSWT).
