Parliament, has threatened to haul The Herald “before the Committee of Privileges to answer contempt charges” for incessantly running prejudicial commentary on the Ghana National Petroleum Corporation and (GNPC) Genser Energy Ghana Ltd Contract.
A one-page letter containing the threat was sent to The Herald by email yesterday by the Parliamentary Select on Mines and Energy, chaired by Samuel Atta Akyea, the Member of Parliament (MP) for Abuakwa South in the Eastern Region, who is mentioned as having family ties with some of the people involved in the transaction, hence caught in conflict of interest.
The deal, has been described as a “sweetheart deal” in which GNPC is buying gas at US$7.9/ mmbtu, but sells it to Genser for US$2.79/mmbtu. This has seen IMANI- Africa’s Bright Simons and Ben Boakye of the Africa Centre of Energy Policy (ACEP) raising issues with the transaction.
The Herald, has published a couple of articles on the deal by establishing the ownership of the Genser, the Akufo-Addo government officials who brokered the deal described as unconscionable, the other companies involved in the transactions and their alleged ties to the Akufo-Addo family among others.
It is not clear, if the committee has written to IMANI- Africa’s Bright Simons and Ben Boakye of the Africa Centre of Energy Policy (ACEP) to tell them that they could be cited for contempt, as it has to The Herald.
The letter from the Parliamentary Service and signed Ms Evelyn Brefo-Boateng, who identified herself as the Clerk to the Committee of the Mines and Energy, had the headline “the contempt implications of your publications relating to the parliamentary investigations into the Ghana National Petroleum Corporation and Genser Energy Ghana Ltd Contracts”.
It said that “the Parliamentary Select Committee on Mines and Energy is very concerned that, on your own admission, while we are investigating matters of and concerning the Ghana National Petroleum Corporation and Genser Energy Ghana Ltd Contracts, your newspaper is incessantly running prejudicial commentary on the very subject matter of our enquiry”.
“I am directed by the Hon Chairman of the Committee to remind you that, in terms of the Article 103 (6) of the Constitution, a Committee of Parliament has the powers, rights and privileges of the High Court. Besides, Article 122 of our Constitution is very clear on contempt of Parliament”, Ms Brefo-Boateng, stated.
She added “I am also directed by the Hon Chairman to caution you that, if you do not stop the prejudicial publications relating to what the Committee is investigating, which will mean you will not have purged yourself of your previous contumacious behaviour, we will be compelled to haul you before the Committee of Privileges to answer contempt charges”.
Genser which is owned by a top financier of the governing New Patriotic Party (NPP) Nana Osae Nyampong; the biological father of Nana Dokua Asiamah Adjei, the NPP Member of Parliament (MP) for Akuapem North constituency, has since been paying next to nothing for the country’s natural gas.
But the ties that bines the various actors in the deal, goes beyond the ruling political party to their business interests and family’s generational wealth of the Akufo-Addo family.
Last week Saturday, the government team at the Ministry of Energy, refused to speak about the goodness of the Genser deal on the platform of Joy FM’s Newsfile programme and left the debate for Bright Simons of IMANI-Africa and Benjamin Boakye of African Centre for Energy Policy (ACEP).
Deputy Energy Minister, Mohammed Amin Adam of the Karaga Constituency in the Northern Regions, did not take in the programme, although he and his former boss, John Peter Amewu, are neck deep in the transaction with some of the communications of GNPC addressed to him directly as Deputy Minister 0n the deal.
The Herald has meanwhile landed a letter dated February 17, 2019, and written by Dr Nii Darko Kobina Asante, now at the Public Utilities Regulatory Commission (PURC) to Chief Executive Officer (CEO) of the Ghana National Gas Company (Ghana Gas) over the Genser-GNPC deal.
Dr Asante, had written the letter in his capacity as Director of Technical Regulations at the Energy Commission, rejecting the special treatment that Genser wanted from the Akufo-Addo government at a time when the Volta River Authority (VRA) and others were buying the same gas for US$7.9/ mmbtu.
But a year after the Energy Commission rejection of discount arrangement for Genser, GNPC under the management of Kofi Kodua Sarpong (KK Sarpong) “stepped into the fray with the $2.79 (per MMBTU) price deal, obviously at a steep discount from the regulated price then of $6.50”.
Dr Asante’s letter against Genser, had referenced one dated January 19, 2019 from the then Chief Executive Officer of the Ghana National Gas Company.
It argued that “whilst, there has been some discussions about providing some strategic gas consumers with a discounted price, we are not aware of any decision having been taken on the subject. Particularly, to the best of our knowledge, no entities have been designated as “strategic”, no discounted price determined, and no mechanism for financing the discount has been determined. In the light of the above, we are unable to provide or suggest a waiver for Genser or any other entity from paying the WACOG”.
Dr Asante, is billed to appear before the Mines and Energy Commission of Parliament to respond to some questions on the transaction in his current capacity as the CEO of the Ghana Gas, the institution he wrote against the special treatment that Genser wanted four years ago.
The Herald in its last Monday edition, had confused Dr Nii Darko Kobina Asante with Dr Benjamin K. D. Asante, who is the CEO of Ghana Gas as the author of the said letter.
The content of the letter, follows denials from insiders on the government’s Economic Management Team (EMT) led by Vice-President Dr. Mahamudu Bawumua that a directive was given in 2020, to stop Ghana Gas from selling gas to power companies.
Ex-Energy Minister, John Peter Amewu and Dr KK Sarpong, had exchanged letters in which they cited an EMT directive.
But The Herald’s sources on the EMT, insist the EMT has not given any directive for gas to be sold to Genser or any other company below US$7.9/ mmbtu.
This paper learnt that sometime on April 2, 2019, the Energy Ministry and the Committee on Review of Gas Market Pricing, made a presentation to EMT and proposed a gas price of US$5.61mmbtu, to reflect a reduction of US$1.68mmbtu on the Public Utility Regulatory Commissions (PURC) 2018 gas price of US$7.29mmbtu to Independent Power Producers (IPPs) in order to mitigate the effect of gas prices on electricity tariffs.
But at the said meeting, no company by name Genser, was mentioned and no decision was issued. It has been revealed that the meeting and presentation was purely an update presentation to EMT on how far the Ministry and Committee were exploring ways to reduce electricity tariffs by means of reducing the cost of gas prices.
Last Tuesday, MPs on the Mines and Energy Committee of Parliament, met officials of GNPC, but members emerged out of the meeting with conflicting positions on the transaction on the responses from GNPC which has its Chief Executive, Opoku Ahweneeh Danquah, a relative of President Akufo-Addo.
Samuel Atta Akyea, is a member of the Akufo-Addo family, who is mentioned to be profiting from the Genser deal through a company called West Coast Ghana Gas Limited.
Under Dr KK Sarpong, West Coast Ghana Gas Limited, was said to be making a whopping US$5 million annually, which has ballooned to US$12 million, since Opoku Ahweneeh Danquah, a grandchild of JB Danquah, took over from Dr Sarpong, whom had fought with for years when he was deputy.
Opoku Ahweneeh Danquah nicknamed “Obunda” as a Deputy CEO in charge of Technical Operations, had drawn his powers from the Presidency and been in a turf war with his former boss, Dr Sarpong, condemning many of the things that Dr Sarpong did, but his conduct on the Genser transaction, appears to support Dr Sarpong, at least on something.
West Coast Ghana Gas Limited, The Herald learnt holds the President’s family interest. It was brought into the deal under the tenure of Dr Sarpong to take over roles that the GNPC staff were playing.
Ghana National Gas Company (GNGC) was performing these roles and collecting the market rate of US$7.9/ mmbtu without any difficulty, but government had it taken from it on the protest from Genser and overnight the price of the gas was reduced to US$2.79/mmbtu and West Coast Ghana Gas Limited, became an intermediary between Genser and GNPC.
It is not clear, if there was any competitive bidding process to bring onboard West Coast Ghana Gas Limited.
Some have sought to link West Coast Ghana Gas Limited to President Akufo-Addo’s younger brother; Edward Akufo-Addo alias “Bumpty” as well as their cousin Gabby Asare Otchere Darko, but this is yet to be confirmed.
There are reports that the company was first registered in Ghana with the Registrar General’s Department, but has since been moved to Dubai in the United Arab Emirates to give it an international image. West Coast Ghana Gas Limited, according to insiders, currently has two former employees of the Volta River Authority (VRA) namely; King Taylor and Emmanuel Johnson, as part of management.
“They are receiving 2 million dollars a month from the gas nominations component of the price paid for gas by off takers”.
Meanwhile, IMANI Center for Policy & Education (IMANI) and the Africa Center for Energy Policy (ACEP) have been explaining what they meant by describing the transaction as a “sweetheart deal” between GNPC, Ghana’s national oil company, and Genser, a US-based Ghanaian-owned company that recently announced that it has raised $425 million to expand its gas-to-power facilities in Ghana.
“Ghana has three main gas fields, all offshore, from which natural gas is pumped through an undersea pipeline to the shore. From the offshore receiving facilities, gas is distributed, in principle, according to the country’s Gas Masterplan.
“The gas is produced by private oil and gas companies of the likes of Tullow, Eni, Vitol and Kosmos and aggregated by GNPC, in its capacity as Ghana’s main upstream state interest operator, for sale to other entities. Ghana Gas is the primary wholesale buyer of the gas and the main processor. Currently, it is also the largest distribution infrastructure operator, though that role has been designated for state-owned BOST. BOST is unable to effectively invest in the pipeline complex required for it to play this distribution utility role due to financial constraints.
“At every level of the value chain, there are regulators that are supposed to make sure that a level playing field exists; and that strict compliance with law and policy, observance of standards and the political and economic interests of the country and its citizens are the hallmarks of the country’s budding gas industry.
“Clearly, either all these regulators are asleep or they are complicit in the brazen ongoing heist of public resources evident in the GNPC – Genser sweetheart deal.
ACEP and IMANI were scandalised by these revelations because even large energy producers and wholesale buyers of gas in Ghana do not get such deals, despite fuel being the biggest contributor to the cost of power businesses and households face in Ghana.
The biggest power producer in Ghana, VRA, for instance, attributes 60% of its total costs to fuel when breaking down the electricity prices it is allowed by the PURC (the main pricing regulator) to charge. Its cost of gas is the regulated price of $6.08 (changed to $5.99 by the regulator in 2022). Under what circumstances then can a smaller power producer with far less impact on the economy, without any of the social constraints faced by VRA to service poor and rich alike, get gas at a price that is roughly 1/4th what the principal public utility is charged?
Even the main wholesaler of gas in Ghana, Ghana Gas, which on-sells/retails to the power industry, gets its gas at $5.4. Due to rampant under-recoveries in the power sector (implicit subsidies imposed by the government, which it nevertheless refuses to pay), it struggles to get paid by the utilities and therefore rack up debts to the upstream suppliers.
GNPC’s own calculations suggest that securing gas costs $7.9 per MMBTU. It has therefore tried to persuade the pricing regulator, PURC, to increase gas prices above the $5.99 the latter has set for the downstream power sector. How can a commodity that has been averaging $8 per unit in recent times, and which the seller claims costs $7.9 to produce, be sold at $2.79 or, even worse, prospectively at $1.72?
GNPC’s Bogus Explanations
Following the ACEP-IMANI exposures, GNPC and the Energy Ministry went on the offensive this week. At an ongoing parliamentary enquiry, GNPC did its best to obfuscate the issues, and suggested all manner of reasons why Genser deserves to pay between 60% and 75% lower than virtually every other gas buyer in the energy industry.
First, it cited the fact that Genser is on the “industrial development tariff”, which at $4.20 per unit is lower than the regulated price (“weighted average cost of gas” – WACOG) set by the regulator. Next, it insisted that Genser is one of a few companies that pays its bills on time and does not rack up arrears and thus deserves some back-patting.
Finally, and most importantly, it rolled out the Rolls-Royce of all justifications: Genser uses its own pipelines to transport the gas it buys and so deserves a rebate on that account alone. Even more vitally, Genser has given GNPC the right to use gas pipelines it is still building in the future to transport gas for free and thus deserves further discounts in what amounts to a barter trade. None of these arguments hold water; some are plain lies.