The Minority in Parliament has sounded the alarm bells over moves by the Akufo-Addo-led government to collateralize Ghana’s oil fields for a $431 million loan.
According to the Ranking Member of the Mines and Energy Committee, John Jinapor, the presidency is exerting undue pressure on the Ghana National Petroleum Corporation (GNPC) to secure the facility from Lukoil International Trading and Supply Company (LITASCO) SA, a Swiss company with operations in European refineries and retail networks.
Addressing the media in Accra on Wednesday, September 20, 2023, the Yapei-Kusawgu MP argued that this action by the Presidency is unconstitutional as it blatantly disregards the directives and resolutions of Parliament.
Mr. Jinapor also called on the Chief Executive of the GNPC and the board to reject the directive issued by the Presidency. He emphasized that proceeding with this directive would constitute an illegality, as GNPC lacks the mandate and authority to enter into such an agreement without obtaining parliamentary approval.
“To our utmost shock, the minority side has become aware that the presidency is using coercive force to compel the GNPC to proceed and execute this loan agreement without parliamentary approval. This is unconstitutional, this is unlawful and this is a blatant disregard to the directive and resolution of Parliament.”
“If you (GNPC) proceed with this directive, you will be committing an illegality. You do not have the mandate and the power to enter into such an agreement without parliamentary approval. The Minority wish to serve notice that we shall use every necessary tool available to ensure that we what is right and legal,” he said.
Before Parliament adjourned in August, the Committee on Mines and Energy, chaired by Samuel Atta Akyea, submitted a report on the GNPC’s 2023 work program. One of the crucial matters under consideration was GNPC’s request to raise $620 million through a loan facility from LITASCO SA.
Parliament decided that it could not approve this amount within GNPC’s work program. Instead, it directed the corporation to present the terms and conditions of the intended per with Article 181 of the Constitution for parliamentary consideration and determination.
The revelation of the Presidency’s attempt to use coercive tactics and presidential authority to force GNPC into executing the loan agreement without parliamentary approval has shocked members of the Minority.
Mr. Jinapor also commended the board members of GNPC who have kicked against the loan agreement saying that bold move must be encouraged.
Furthermore, Mr. Jinapor pointed out that another document intercepted at the GNPC board level included a deed of indebtedness, the JOHL Crude Oil Supply and Purchase Agreement, the Jubilee Oil Holding Limited (JOHL) prepayment facility agreement, guarantees facility agreement, and the crude oil supply and purchase agreement.
“The key has to do with the fact that GNPC is raising this facility from LITASCO LUKOIL and in return, they are giving our oil out to this company for the next five-and-a-half years. Indeed, all the oil in the TEN Oil Field has been incombered including royalties and our carried and participating interests will be escrowed into this company.”
Mr. Jinapor raised concerns about the lack of clarity regarding the utilization of the loan funds, aside from debt repayment. He emphasized that despite the government receiving over $1.4 billion in oil receipts in 2022, the highest ever, there is no justification for taking a $431 million loan that would mortgage the country’s future for the next five-and-a-half years and encumber the entire TEN field oil.
“This is a government that received over $1.4 billion of oil receipts in 2022, the highest ever, and despite receiving this huge oil revenue from our oil sales, you want to take $431 million today and mortgage our future for the next five-and-a-half years and escrow the whole of TEN field oil,” he added.
According to the memo intercepted by the NDC MPs, the Presidency convened a meeting on September 14, 2023, at 11 a.m., during which it directed the GNPC to seek board approval to raise this substantial amount without obtaining parliamentary approval. It is important to note that some board members of the GNPC objected to this directive.
The meeting attendees included the Chief of Staff, the Executive Secretary to the President, the Minister of Finance, the Deputy Minister of Energy, and the chief executives of Karpower and LITASCO, alongside other executives from both companies.
