Ghana sells oil drill ship to pay judgement debt

Siem VesselMore than a decade after the Ghana National Petroleum Corporation (GNPC) had sold its drill ship to pay judgement debt awarded in favour of Societe Generale by a UK court, there is no record at the Bank of Ghana (BoG) to show the nature of the transaction.

While the BoG does not have records of any cash transfer before and after the sale of the drill ship, Discoverer 511, the then owner of the ship, the GNPC, does not have the transaction records of the sale ordered by the Ministry of Energy either.

As a result, the period of the sale of the ship, the buyer and the actual judgement debt due Societe General are yet to be established by the Commission on Judgement Debts.

The commission subpoenaed the GNPC to make available its audited accounts covering 1999 to 2005, including its corresponding asset register,  transaction report on the sale of the drill ship and minutes of meetings of the GNPC Board covering 1999 to 2005.

The commission also ordered the BoG to make available documents relating to the deal, including records of the ship’s sale and records of the payment made to Societe Generale.

But when the Chief Manager in charge of the Banking Department of the BoG, Mr Paul Mensah-Ashun, appeared before the commission yesterday, he said, “We have queried our database extensively but there is nothing that showed that some payment was made to Societe Generale in respect of the sale of the GNPC ship.”

The GNPC, however, managed to submit its asset register covering 2002-2003, minutes of board meetings covering 2001 to 2005, draft board minutes of May 28, 1999, December 29, 1999 and June 26, 2000.

The GNPC could not produce the transaction report because, according to its Chief Executive Officer (CEO), Nana Boakye Asafu-Adjaye, the corporation had not been involved in the sale of the ship.


The background of the case, according to Nana  Asafu-Adjaye, was that in the early 1990s, GNPC, on the advice of Societe Generale, entered into some derivative transactions to manage oil price risk in anticipation of the production of oil from the Tano fields.

Societe Generale recommended a strategy for the derivative transactions and also provided GNPC with credit lines, as well as controlled what transactions were acceptable.

However, in 1999, Societe Generale sued GNPC in a London court to recover debts owed to it by the corporation.

Mr Asafu-Adjaye, who became the CEO of GNPC on June 1, 2009, could, however, not state how the Attorney-General had handled the matter when asked by counsel for the commission, Mr Dometi Kofi Sokpor, how the matter had been handled.

But the GNPC lost the case and the damages paid as judgement debt remain a mystery the commission is trying to uncover, even though $19.5 million had been paid to Societe General.

BoG and the transaction

Section 28 of the BoG Law (Act 612) of 2002 mandates the bank to be the sole custodian of state funds, both in and outside Ghana, and may, by notice published in the Gazette, authorise any other person or institution to act as custodian of any such funds as may be specified in the notice.

Section 50 (h-(i) of the act also states that the bank shall act “as correspondent bank or agent for an international banking institution or a monetary authority; and effect foreign exchange transactions of any kind”.

But Mr Mensah-Ashun said, “For this particular case, we don’t have any information. Our system has not captured any information relating to that transaction.”

Asked by Mr Sokpor to walk the commission through foreign exchange transactions handled by the bank, Mr Mensah-Ashun said if the institution involved was a public one, the transaction might not go through the BoG, but in the case of ministries, departments or agencies, those transactions passed through the bank.

He, however, said in the case of the GNPC ship sale, there was nothing to trace.

On whether the payment could have been done without anything being rooted through the BoG, he responded in the affirmative, saying, “I strongly suspect so.”

“I don’t really know the locus of the GNPC. I believe it might have done the transaction without the involvement of the Central Bank. Otherwise, we might have some record on that transaction.”

On how the GNPC account at the BoG was operated in terms of funds transfer, he said, “They would have to write to the head of banking with all the supporting documents relating to the transaction and forward it to the BoG and then we’ll take it from there and process it.”

Counsel also asked whether it was possible for proceeds from the sale of the ship to be deposited in GNPC’s foreign account at the BoG.

To that, Mr Mensah-Eshun said, “I don’t think so. The BoG has its corresponding banks and all foreign exchange that is earned either through the sale of cocoa or minerals is lodged in corresponding banks and that is what raises our reserves. If it is not put in our corresponding bank account, it does not come into the picture of our foreign exchange reserves.”


Mr Asafu-Adjaye had, in an earlier testimony, said it was the Energy Ministry that sold the ship.

At yesterday’s sitting, however, he told the commission that he was not sure who had sold the ship.

“It was not sold by the GNPC but we received the letter from the ministry that it has been sold,“ he added.

The letter

A copy of a letter addressed to the Board Chairman of the GNPC, dated October 24, 2001 and signed by Mr Albert Kan Dapaah, the then Minister of Energy, which was tendered in evidence, stated: “Further to our meeting on Monday, October 22, 2001, and as requested, I provide below details on the sale of the drill ship D511.”

“Sales price — $24 million, Paid to Societe General — $19.5 million, Balance — $ 4.5 million, legal fees paid — $ .1 million, Escrow Account — $ .9 million and Balance paid to Ministry of Finance — $ 3.5 million.

“The Escrow Account is operated by a UK Law firm, Constant and Constant, and is meant to pay for claims on the drill ship. All such claims will have to be approved by the GNPC. The balance on this account will be returned to the GNPC when all the verifiable liabilities have been settled.

“Those claims already settled were properly cross-checked by my deputy with the GNPC to ensure they were properly due,” it said.

In spite of the claims of the letter, the GNPC Chief Executive maintained that with the exception of the letter, there was no evidence of the transaction at the corporation.

Source: Daily Graphic

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