The Herald, has picked up information about the mounting debt for nonpayment of gas produced from the Eni OCTP project.
There has been persistent drawdown of the US$500 million project Letters of Credit (LC) held by Stanchart.
So far, an amount of US$346 million in debt, has accrued to the state due to the Ghana National Petroleum Corporation (GNPC) nonpayment of natural gas supplied by the Italian oil giant Eni to satisfy the country’s electricity needs.
Though the gas is priced into the electricity and consumers pay, the national oil company recklessly discounts part of the gas to Genser Energy Ghana Limited, making it difficult for enough revenue to be recovered to settle the gas producer.
Readers will recall a series of publications on the losses occasioned by the discount sanctioned by the then Minister of Energy, John Peter Amewu, but negotiated and even worsened by Mathew Opoku Prempeh, the current minister.
As a result, the Italians have drawn down US$346 million from the British multinational universal bank and financial services holding company HSBC and Standard Chartered plc, another British multinational bank.
The US$500 million LC with HSBC and StanChart, is guaranteed by the World Bank. The conditions are that the LC should maintain a minimum balance of US$100 million. When the amount drops below US$100 million, the Banks will call on the World Bank Guarantee.
The Akufo-Addo government has struggled to ensure that the balance does not go below the minimum threshold.
The Herald is informed that the Government avoided the World Bank guarantee by the skin of its teeth last month, thanks to the Bank of Ghana’s last-minute intervention.
The gas sector debt is swelling at a time that the Mine and Energy Committee of Parliament, led by Samuel Atta Akyea with John Jinapor as its Ranking Member, has since September 2022, claimed to be investigating the obnoxious GNPC-Genser Energy transaction to evaluate whether the country is getting value for money.
It is the same deal which has seen the Energy Minister, Dr Opoku Prempeh, in a recent standoff with the workers of Ghana Gas.
The World Bank, according to insiders, guaranteed the transaction between the GNPC and Eni to advance the socio-economic development of Ghana. But it appears some political actors are milking the good intervention for their private gain and piling debt on the state.
GNPC’s failure to pay the bills from ENI, The Herald has learnt, is because the Electricity Company of Ghana (ECG) cannot raise the needed cash to help GNPC respond to the cash calls.
This is partly because GNPC, which requires revenues, undermines ECG’s investment in the power sector. Genser has taken over the power market for bulk consumers in the Mining areas because GNPC supplies sweetheart gas to the company.
Interestingly, The Herald is informed that the management and board of the GNPC led by Opoku-Ahweneeh Danquah and Freddie Blay, respectively, are not perturbed because the state will pay when GNPC does not pay.
So far, the government has paid over $1 billion to Eni, while the political appointees mismanage the power and gas sectors through dubious contracts and discounts.
With the current economic difficulties, it remains to be seen how the government can continue to pay for the gas. The recent tariff adjustment is aimed at recovering more money from the poor instead of Genser to pay for the gas.
The Ghanaian people are burdened with multiple layers of levies in the energy sector already.
But the government’s insensitivity makes it more than Oliver Twist, always asking for more from the poor.
The Herald in a series of exposés last year, reported about the Genser Energy deal between the company and the GNPC.
The national oil company, had signed a gas sales agreement with the private company, Genser, and provided a staggering $2 billion in benefits to the private company, amidst protest from Ghana Gas.
Fortnight ago, Energy Minister, Dr Opoku Prempeh, found himself in hot waters with the Senior Staff Association of Ghana National Gas Company, chastising him for allegedly approving a deal for Genser Energy, to establish a gas processing plant in the Western Region to compete with the state-owned gas company.
The Minister’s decision, according to the Ghana Gas workers, amounts to stabbing President Akufo-Addo in the back, because the President, had last year, tasked Ghana Gas, to establish a second gas processing plant to process more gas for electricity generation and domestic consumption.
Rather than responding to the matters, the Energy Minister, quickly hid himself under the Parliamentary Committee on Mines and Energy claiming it was investigating the matter.
Dr Opoku Prempeh in a statement claimed that “this matter is being investigated by the Parliamentary Committee on Mines and Energy. The Ministry is mindful of the legal consequences of discussing same in those circumstances.
The President of the Republic further referred the matter to the Ministry, the Petroleum Commission, and the Energy Commission for investigation. A report in this respect has been delivered to His Excellency the President.”
Interestingly, when The Herald and Civil Society Organizations (CSOs) began publishing on the transaction, the Mines and Energy Committee of Parliament popped up to show interest in the matter and started its investigation into it.
Intriguingly, the committee rather resorted to sponsored trips to Genser Energy’s facilities to sing the company’s praise before even concluding their investigation.
Several months have passed and there is no report from the Committee on the investigation into the suitability of the transaction to Ghana.
According to some people close to the matter, some MPs on the committee, who have shown bias and interest in the matter instigated the investigation into the Genser Energy transaction at the request of the Minister of Energy to divert public attention.
Subsequently, some committee members on both sides of the political divide openly criticized CSOs against the deal, while they praised Genser.
At the Committee sitting, The Herald is informed that many of the MPs were openly biased towards Genser. While some were hostile to the CSOs, others pleaded with the CSOs to allow Genser to have its way, claiming it was an indigenous Ghanaian company.
Meanwhile, Genser itself has not said anything publicly about the deal. The committee itself noted significant inconsistencies between the presentation of Genser and GNPC, which should have triggered a series of interrogations with many people who were involved.
Interestingly, the Parliamentary investigation has been put on ice. This proves to many who believed that the process was a charade right from the start.
According to someone with insight into the committee’s workings, “the speaker did not sanction the investigations anymore.”
In a recent revelation, Ghana Gas Senior Workers, have called on the President to intervene in an additional deal granted by the Minister of Energy.
The Ministry responded to the workers and blamed his predecessor for the deal. The Minister also implicated the CEO of Ghana Gas, Dr Ben Asante for inciting the workers to indict him for the deal. This raises a question as to why the CEO will sponsor the workers against the minister.
The Herald is investigating how the relationship between the CEO and the minister broke down and will update readers in the coming days.
However, this paper can authoritatively say that the workers were right in blaming the Energy Minister for the terrible deal, which directly undermines the national investment in Ghana Gas.
Before the Minister took office in 2021, there was no agreement authorizing Genser Energy to build a gas conditioning plant.
The gas conditioning plant was added to the amendment of the sweetheart pipeline contract approved by Dr Opoku Prempeh in March 2021.
At the time of the authorization, the Minister, who has oversight responsibility over the sector, knew that Ghana Gas was in the process of building a second train to process the extra gas from Jubilee and TEN fields. Therefore, an attempt to push the blame on predecessors is disingenuous.
Again, the minister takes refuge in the investigation being done by the Mines and Energy Committee to avoid commenting on the substance of the issues raised by the workers.
But The Herald followed the backend exchanges after the committee started the investigation, which shows that the Minister did not stop intervening in the deal during the process, therefore, cannot pretend to respect the investigative process to avoid providing information.
The Herald, will publish all the details in the coming days.
The Energy Ministry had dismissed claims that the sector minister, Dr Opoku Prempeh, had signed a contract with Genser for the building of a second Gas processing plant with a higher capacity.
Ghana Gas Senior Staff Association in a statement dated January 9, 2023, called on President Akufo-Addo to intervene in the minister’s alleged approval of the Genser deal.
The senior staff expressed their displeasure about the manner in which the Minister was supposedly handling the Gas industry.
“Workers of Ghana Gas were shocked to hear that Genser is planning to build a Gas Processing Plant with its raw gas source being Jubilee fields.
They are therefore calling on the presidency to intervene since the President’s dream of having a second Gas processing plant is on the line,” the Association said in its statement.
But in a separate statement on January 10, 2023, the Energy Ministry, stated, “The Minister wishes to state emphatically that neither he nor anyone else acting on behalf of the Ministry has signed any contract with GENSER. The only contracts signed with Genser on record are by GNGC and GNPC”.
According to the Energy Ministry, the issue is being investigated by the Parliamentary Committee on Mines and Energy adding, “this matter is being investigated by the Parliamentary Committee on Mines and Energy.
The Ministry is mindful of the legal consequences of discussing same in those circumstances. The President of the Republic further referred the matter to the Ministry, the Petroleum Commission, and the Energy Commission for investigation.
A report in this respect has been delivered to His Excellency the President,” the statement added.
