Confusion rocks US$1.8 billion Genser Energy-GNPC sweetheart deal….Napo blames Amewu, Atta Akyea’s Committee also in tatters

The Herald, has picked reports on some interesting developments between the Genser Energy and the Ghana National Petroleum Corporation (GNPC) including confirmation that GNPC will be liable to pay over US$1.8 billion over 16 years for a pipeline installed by Genser, despite earlier denials that the pipeline to Kumasi would not cost GNPC that amount.

There is also confusion about who authorized the construction of the pipelines.

Genser is blaming the Minister of Energy, Matthew Opoku Prempeh for authorising the pipeline construction, exposing the minister for his testimony before the Mines and Energy Committee that he was not involved in the Genser transaction and blaming it on his predecessor, John Peter Amewu, currently the Railway Development Minister.

The last two weeks have seen a coordinated media campaign by Genser Energy to get the public believe it is rather a victim of a wrongful corporate decision, but not involved in any scheme to deny the country revenue from its natural resources.

Genser, has completed the pipeline construction to Kumasi and is waiting for GNPC to start paying for the infrastructure.

But GNPC, neither has the gas volumes nor the cash to meet Genser’s demands. Genser has therefore made a new proposal to split the contract into infrastructure and commodity at its discretion.

The agreement between Genser Energy and GNPC, became a contentious topic last year, drawing criticism from key Civil Society Organizations (CSOs), particularly African Centre for Energy Policy (ACEP) and IMANI, showing that the deal would cost the state billions of dollars in gas discounts for Genser and the gas sector.

ACEP and IMANI, labelled the deal a “sweetheart deal” that could lead to an estimated 1.5 billion dollars in gas discounts for Genser.

GNPC and the government denied any wrongdoing and insisted the contract was above board, though the gas price had been reduced from US$6.08/MMBtu under Ghana Gas to US$2.79/MMBtu when the same arrangement was politically moved to GNPC.

Genser was granted a further discount to US$1.75/MMBtu after the completion of its pipeline to Kumasi, further increasing the liabilities on GNPC.

The Parliamentary Committee on Mines and Energy, decided to investigate the matter without the speaker’s instruction, while Parliament was on recess. This was after the Chairman of the Committee, Atta Akyea and KT Hammond had passed judgment on the alarm The Herald and CSOs raised, indicating nothing untoward had happened.

This raised concern about the fairness of the Committee to be dispassionate about the issues in the so-called investigations.

It is, therefore, no surprise that after close to a year, the report of the Committee is yet to be released, while Genser paid a lower than market price for the gas over the period. There are rising speculations that the Chairman of the Committee got Genser to write the committee report and attempted to impose it on the Committee.

The Herald investigated the reaction of the minority who are divided on this matter and will update readers subsequently.

Recent developments have further complicated the transaction for Ghana.

With GNPC facing financial challenges, Genser seeks to secure future payments through a more robust contract with parliamentary approval.

Interestingly, Genser has confirmed that GNPC, will be liable for paying over US$1.8 billion for more than 16 years for the pipeline, despite earlier denials that the pipeline would cost GNPC about US$1.5 billion.

The Herald is keenly monitoring how these new dynamics will be revised into the Mines and Energy Committee draft report.

In its letter to GNPC on the new proposal, Curiously, Genser copied Parliament and suggested parliamentary ratification of the deal to enable them to hang the US$1.8 billion on the neck of the people of Ghana.

The paper’s intelligence in Genser, reveals significant apprehension in the company that, given the current economic circumstances and the presence of the IMF, the only way to get their money is to smuggle the agreement through Parliament to prevent any government from touching it.

They are also demanding take-or-pay in the contract for parliamentary approval. Already, Key members of government at the presidency, Ministry of Finance and Energy, have been lobbied to facilitate the parliamentary ratification.

The GNPC Management, led by Opoku Ahwenee Danquah, has already given the green light for the modification, despite internal resistance from senior staff of the corporation.

Stay tuned.

Source: The Herald