The Ghana National Petroleum Corporation (GNPC) says the funds used to acquire the 7 per cent Joint Operating Agreement (commercial) interest of Anadarko WCTP Company in Jubilee, DWT and WCTP was advanced by the Ministry of Finance.
It said as communicated to the Ministry, the advance would be fully repaid with interest by GNPC Explorco or Jubliee Oil Holdings Limited (“JOHL”) from proceeds of crude sales or funding raised on the debt market.
This was contained in a statement in response to comments made by the Africa Centre for Energy Policy (“ACEP”) in a press statement.
ACEP had asserted that the Corporation has not communicated how it intended to finance the $199 million acquisition, leading to speculations of illegality in breach of the Petroleum Revenue Management Act, as amended.
It said the Corporation had not set up any offshore company.
The facts of the matter are as follows:
Anadarko Offshore Holding Company LLC (“Anadarko Offshore”) sought to wind up its operations in Ghana and its subsidiary, Anadarko WCTP Company (“Anadarko WCTP”) (an offshore company registered in Cayman Islands that holds Anadarko’s interest in Jubilee, Deepwater Tano (DWT) and West Cape Three Points (WCTP)) was to be sold to Kosmos Energy Holdings Ghana Limited (“Kosmos”).
The Corporation expressed an interest in acquiring part of Anadarko WCTP’s interest in the DWT and WCTP petroleum agreements and notified the Ministry of Energy.
It said the Parties entered negotiations to determine the Corporation’s share, and it concluded with an offer to the Corporation to purchase the 7 per cent commercial interest.
The statement said to enable the negotiations with Kosmos for the sale of Anadarko WCTP to proceed, Anadarko Offshore incorporated, a company, Jubilee Oil Holdings Limited (“JOHL”), in the Cayman Islands was to hold the 7 per cent commercial interest in the interim while the parties negotiated and finalised the commercial terms of the transaction.
“The parties proceeded to negotiate the commercial terms of the sale and purchase of the 7 per cent commercial interest. The headline purchase price as of 1st April 2021 was quoted as $199 million,” it said.
It said this price was adjusted to $165 million effective September 30, 2021, following adjustments for cash calls, taxes and other expenses incurred as well as sales made by Anadarko WCTP within the period.
The statement said Anadarko Offshore, the Seller, was eventually paid $164,798,691.00 on October 19, 2021 in full settlement of the acquisition.
“Anadarko Offshore thereafter assigned JOHL to GNPC, as JOHL holds the 7 per cent commercial interest and the Corporation is currently in the process of transferring JOHL to GNPC Explorco,” it added.
The Corporation said said it was never a ploy by the Corporation to ‘live unto itself, not the law and the nation’s strategy for its existence’ as claimed by ACEP.
The statement said the Corporation was in the process of registering JOHL as an external company in Ghana.
It said the Anadarko Offshore incorporated JOHL with its own directors and at the time of the sale and purchase, the Corporation was required to nominate two Directors to take over after the transfer was effected.
The Board of Directors of the Corporation therefore nominated the Board Chairman, Mr Freddie Blay, and the Chief Executive Officer, Dr. K.K. Sarpong, as initial Board directors to replace the Directors of JOHL appointed by Anadarko.
It said the Corporation held one hundred per cent of the shares in JOHL and the beneficial ownership of JOHL could be ascertained by conducting a general search with the Cayman Islands Registry.
Further, the Share Purchase Agreement entered into on October 13, 2021, between Anadarko Offshore and GNPC show that the shares of JOHL belong to the Corporation as the Buyer.
The Corporation has always operated within the remit of the laws and regulations of the Petroleum Industry, including the Petroleum Revenue Management Act, as amended, and has no intention of doing otherwise.
It said JOHL was duly incorporated under the law of the Cayman Islands by Anadarko Offshore in line with the legal framework under the governing petroleum agreements.
The Corporation is in the process of registering JOHL as an external company in line with Ghanaian law.
The statement said the Corporation would continue to operate within the remit of the legal framework and has no intention of flouting any legal requirements and procedures.
“As the Corporation has always indicated, the Corporation welcomes engagement with any stakeholder in its operations. All documents on the transactions are available for scrutiny and inspection, ” it said.