…Freddie Blay acted before seeking A-G’s advice on JHOL
The Herald’s investigation into the boardroom wrangling between Minister of Energy, Dr Matthew Opoku Prempeh and Freddie Blay, the Board Chairman of the Ghana National Petroleum Corporation (GNPC) continuously reveals some interesting details, including a blatant disregard for an advice from the Attorney-General.
It has emerged also that the attempt by the Board Chairman of GNPC to offload 50percent of the corporation’s shareholding in Jubilee Oil Holding Company (JOHL) was initiated long before seeking legal advice from the Attorney General and Minister of Justice (A-G’s) office.
The government had negotiated with Anadarko that Kosmos, and acquired the 7percent stake worth about US$164.8 million as at last year. The shares are locked up in the Cayman Island as an offshore company with some two Ghanaian individuals as the only directors of the company.
Mr Blay sought legal advice by a letter dated January 31, 2023, long after he had advanced negotiations with PetroSA.
The request to the A-G, was also three months after the sector Minister, had ordered GNPC through its Acting CEO to “cease any further negotiation with PetroSA’s intended pre-emption of the JOHL stakes”,’ in a letter dated 28th October, 2022.
Additionally, the opening of negotiations and offer of a 50-50 split in DWT interest held by JOHL was also after former Chief Executive of GNPC, Dr Kofi Kondua Sarpong, had told PetroSA to look at the remaining stakes left with Kosmos, if they wanted to increase their stakes.
Correspondence gleaned by The Herald show that by a letter dated April 6, 2022, Dr K. K Sarpong, had made it clear to PetroSA that “Anadarko and Kosmos agreed to carve out seven percent (7%) of each of the participating interests in the DWT and WCTP JOAs and corresponding interests in the DWT and WCTP PAs and UUOA for GNPC.”
Dr Sarpong, emphasised that the decision to acquire these interests, was consistent with the ‘Government of Ghana’s over-arching strategy of progressively increasing equity interest in petroleum projects both offshore and onshore,’ stating further that ‘it was understood that the remaining interest to be transferred to Kosmos would be the subject of pre-emption by the other parties in the Joint Venture.’
However, in less than three weeks after Dr Sarpong’s exited GNPC on April 30, 2022, his successor Opoku-Ahwenee Danquah, opened a new discussion with PetroSA on the subject of pre-emption, suggesting “an in-person meeting between GNPC and PetroSA on a date and at a place of your convenience”.
Dr Sarpong’s position was also reflected in paragraph 7 of the A-G’s legal opinion to the GNPC Chairman.
The A-G states that upon carving out 7percent of each of the participating interests in the DWT and WCTP JOAs and corresponding interests in the DWT WCTP PA’s and UUOA for GNPC, the remaining interests to be transferred to Kosmos would be the subject of pre-emption by the other parties.’
Notwithstanding the advice of the A-G, and the Minister for Energy’s clearly stated non-negotiable position of government, the GNPC Board Chairman sent a letter to PetroSA dated 23, April, 2023 agreeing to an equal split of the DWT interest held by JOHL, with the South African NOC.
A furious Minister for Energy, by a letter dated May 16, 2023 decided to escalate the waywardness of the GNPC to the Presidency, through the Secretary at Jubilee House.
The Herald’s exposure of the bizarre nature of the negotiations between the GNPC Board chair and PetroSA to reduce Ghana’s interest holdings in Jubilee and the deepwater Tano (area) which holds the TEN field, saw also the Minority in Parliament and Civil Society calling for a probe into what appeared to be a shady deal.
Freddie Blay, a former National Chairman of the ruling New Patriotic Party (NPP) appears confused about his role and mandate at the national oil company (NOC) as he personally writes and signs letters on behalf of the corporation as if he was an Executive Chairman.
“This error in corporate governance practice would obviously not occur if GNPC had a well-informed CEO,” observed one furious civil society advocate.
The Herald can state that PetroSA had no pre-emption rights over the 7% interest acquired by the GNPC, from Anadarko and held by JOHL.
Both PetroSA and Tullow Oil, had notified Kosmos Energy of exercising their pre-emption rights as the latter initiated acquisition of the interests of then exiting Anadarko, a Kosmos press release on 11th November, 2021 had announced.
Correspondence sighted by this paper, confirmed that PetroSA continued to pursue this, and reached an understanding where Kosmos was offering the former part of their shares in the DWT JOA.
Kosmos Energy, by a letter dated December 12, 2022 to the Minister for Energy and GNPC, requested for their consent to carve out the said shares to PetroSA.
The Minister, upon receipt of the Kosmos application for consent, indicated to them Ghana’s willingness to assent to the assignment upon fulfilment of the related conditions.
However, by a letter dated February 13, 2023 Kosmos notified the Minister for Energy, GNPC and the Petroleum Commission of the withdrawal of their consent request “on the basis that the relevant parties no longer intend to undertake the Carve-out and the SPA Transaction”.
It is unclear, why the deal with Kosmos collapsed.
Meanwhile, a coalition of Civil Society organizations (CSOs) had earlier called for the removal of the GNPC Board Chairman and CEO and a probe into the secret dealings involving state assets. In a three-page response, most of which was on tangential matters, the GNPC chairman said PetroSA had served notice to pre-empt rights to acquire the said interest after GNPC acquired JOHL.
The Deputy Minority Leader and Member of Parliament for Ellembelle, who was a former Minister for Energy has reiterated the Minority members’ call for an investigation into the conduct of GNPC Chairman in the secret transaction, notwithstanding directives to the contrary by the sector minister.
In an earlier press release of 30th May, 2023 the Minority in condemning the attempted sale, had raised concerns about how revenues of JOHL were being handled serving notice it would table it in parliament for explanation. It called also for the immediate transfer of the shares held by JOHL to GNPC, questioning a related deal involving LITASCO.
The GNPC Board Chairman, strategically avoided a conflict with his supervisory minister, Dr Opoku Prempeh, threatening to rather sue the CSOs calling for his dismissal for attempting to sell 50 percent stake in JOHL to PetroSA.
Mr. Blay, in his second public statement after the scandal was first reported by The Herald, sought to question the intellectual capacity of the CSOs on Ghana’s Companies Act 2019 (Act 992) and transfer of shares, and directed them to google search the requirement of the law, before jumping into conclusion on what he was doing with PetroSA.
“Ghana is a country of law, and there are laws and procedures governing the sale and transfer of shares, under Ghana’s Companies Act 2019 (Act 992), even for private companies. I encourage all my accusers, and the public to Google “what is the procedure for share transfers in Ghana”, educate themselves, and draw their own conclusions on the veracity or duplicity of the allegations. Shares of a company are not a pack of cigarettes anyone, and for that matter, the Chairman of GNPC can keep in his or her pocket and vend by the street!”, he said yesterday.
The likes of Ben Boakye, the Executive Director of the Africa Centre for Energy Policy (ACEP) among others, had expressed shock about reports that Mr Blay, a lawyer by profession, wrote and signed letters that sought to allocate interest in Ghana’s oil fields to Petroleum Oil and Gas Corporation of South Africa (PetroSA).
The Energy Minister, had described the ex-New Patriotic Party (NPP) National Chairman’s conduct as “scandalous” in a letter to President Nana Akufo-Addo, but in a statement, Mr Blay, rather went after the CSOs calling for his resignation, as well as that of GNPC CEO, insisting that the call was deeply regrettable and unfortunate.
He did not address the corporate governance matters, but said “CSOs, are expected to protect the interests and rights of civil society, seek the public good and national interest. Instead, the 29 CSOs that have called for my resignation, chose to engage hastily in this matter without seeking the facts, and rather misinform the public, in pursuit of ulterior motives and vested interest.
“I have taken due note of the libellous statements against me by my detractors including the said CSOs, and reserve the right to take legal action against these organizations and anyone engaged in this diabolic exercise of destroying my name and reputation.”
Addressing the press on Tuesday, May 23, the Coordinator for the coalition, Abdul Karim Mohammed, said the continuous presence of Mr Blay and Ahweneeh Danquah, closely associated with petroleum operations, poses significant risks to Ghana’s interests.
The CSOs are made up of the Africa Centre for Energy Policy (ACEP), Centre for Democratic Development (CDD-Ghana), the Chamber of Petroleum Consumers Ghana (COPEC), Imani Centre for Policy and Education and 25 others.
The CSOs, also accused the two men of working against the interest of the state. But Mr Blay, claims the allegations surrounding the supposed “surreptitious,” “clandestine,” and “scandalous” sale of so-called GNPC shares are unequivocally false.
“There is no intention by GNPC or me as its Chairman, to divest 7% shareholding in JOHL nor has there been any claim by PetroSA to acquire shareholding interests in JOHL. Such claims can only stem from an uninformed and malevolent mind.”
The Minister had written to the President complaining that “the Chairman of the GNPC Board, in the letter under reference, is inviting PetroSA to preempt the 7% interest that was recently acquired by the Government of Ghana from Anadarko West Cape Three Points Company (“Anadarko”) and proposing an equal split of the Deep Water Tano (“DWT”) portion which would decrease the Government’s interest”.
“We wish to bring this action of the Chairman, which is in direct contravention of the Government of Ghana’s express directives on the subject matter, to the urgent attention of His Excellency the President”, a letter dated 16th May 2023 and addressed to the President had insisted.
It explained how the asset came to Ghana saying “His Excellency the President will recall that Anadarko, a partner in the West Cape Three Points (“WCTP”) and the DWT Petroleum Agreements (“PAs”) and the Jubilee and TEN fields triggered the requirements for Government’s consent to a transaction in which Anadarko proposed to sell its entire interests in the DWT and WCTP PAs to Kosmos Energy Holdings Limited (“Kosmos”). After a series of negotiations and a Settlement. Agreement reached with the Ghana Revenue Authority (“GRA”), the Government negotiated with Anadarko that Kosmos could acquire the said stake on condition that the State will purchase 7% of the stake worth about US$164.8 million. On this basis, the Government of Ghana granted its consent to the transaction. The Ministry of Energy wrote to the Ministry of Finance (“MoF”) on 29th September, 21121 to utilize part of the negotiated tax settlement of $170m to support GNPC to acquire the interest which Anadarko had carved-out in the offshore entity Jubilee Oil Holding Limited (JOHL) in Cayman Islands. The Minister on the same date directed the GNPC to transfer the interest in JOHL to Explorco as a requirement of law. It is noted that the acquisition by the State was done with His Excellency’s prior approval on 22nd July, 2021”.
In the estimation of ACEP’s Mr Boakye, if properly approved the Chief Executive Officer, Mr Opoku Ahweneeh Danquah, should have handled such a transaction.
Speaking in an interview on TV3’ Ghana Tonight on Tuesday, May 23, Mr Boakye said, “It is surprising to find that in such a serious organization, you would have the Board Chair directly writing and signing letters. One would have assumed that once there is a CEO, the CEO will be the one doing those operational leg works and doing the signing, even if the decision is taken.”
The Energy Governance Professional noted that this does not augur well for corporate governance in the GNPC,
“This really points to certain collusion at some level within the organization to really undermine the broader decision of the organization to do this. And it is becoming clear that not the entire Management or Board was involved. Even for the Board Chair to take those decisions without reference to any law that allows him to activate such preemptions is weird and I found that shocking.”
