The Chief Executive Officer of the Ghana National Petroleum Corporation (GNPC), Dr K.K. Sarpong has opened up for the first time about Corporation’s move to increase stakes in the Aker/AGM blocks.
According to him, the move will create an estimated 11,000 jobs and bring in 27 billion dollars in foreign exchange inflows.
Speaking Thursday morning on local language radio station, Peace FM, he said the deal holds the key to solving Ghana’s forex challenges.
One reason why this acquisition will be helpful to us is that all the tax advantage that would have gone to these foreign companies will now come to Ghana and GNPC. If we leave Aker to produce the oil alone they will have to take out of Ghana about 1 billion dollars in capital allowances that reduce taxes, I mean they won’t pay any of that money to Ghana in taxes. But when we acquire the assets all that money will stay in Ghana…this particular transaction has the potential to create about 11,000 jobs – he said on Peace FM’s Kokrokoo.
He was emphatic that the transaction can address the country’s foreign exchange challenge over the life of the project because of the potential for it to bring in an estimated $27 billion in foreign exchange inflows.
He cited a research paper authored by the Institute for Fiscal Studies which argued for Ghana to take up as much as 55% stake in the country’s oil and other natural resources because of the enormous benefits to the economy.
Rationale for the deal
Outlining the rationale for the transaction, he explained that there is pressure from developed countries for poor countries like Ghana to abandon their oil resources in the ground and rather borrow to invest in renewable energy.
This is forcing many foreign oil companies to leave countries like Ghana.
He said unless GNPC builds its capacity to take over, all of Ghana’s yet-to-be explored oil, worth billions of dollars will be left in the ground.
These developed countries forcing us to abandon our oil and go green are still producing coal (one of the dirtiest natural resources). The irony is that they have fully exploited and used their oil resources to develop their countries and they sold the oil to us, very expensive. Just when we also found oil, all of a sudden they insist we should abandon our oil and rather go and borrow to invest in renewable energy. I can never agree to that, he said.
Some CSO’s critical of the transaction have claimed that Aker Energy has spent less than $400 million on the fields so far and therefore do not deserve the initially proposed $1.6 billion the government had asked parliament to approve but Dr. Srapong was emphatic when he said that claim was false.
He stated that GNPC records show that Aker has spent $712 million in total cost to date.
It is not fair to say that Aker Energy has spent only 100 million and that GNPC is advising government to go and pay 1.1 billion dollars. People are throwing figures out there to confuse people. These figures can be verified, at GNPC we have the records of what they have spent.
According to the GNPC Chief Executive, the transaction has by-partisan support.
At least this is the one transaction that has by-partisan approval. All the key individuals on both sides of the political divide agree with the move. For me this particular issue is not NPP or NDC, it is about Ghana.
He said his door is open to all CSOs who want clarity on key issues for an open and fair discussion.
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Note: Dr Sarpong spoke in Twi. The translations of his comments to English have been italicised.