Finally, the elusive Chief Executive of the Ghana National Petroleum Corporation (GNPC) has found time in his packed diary to engage the public about the controversy surrounding the biggest single transaction in the GNPC’s history.

Alerted by friends, who know of my deep interest in the subject, I went online to watch the GNPC Boss’ interview on Ghana’s most popular local language radio station this morning myself.

Any thoughts I had about the purpose of the public engagement being about making up for the failure of the GNPC to conduct extensive consultations ahead of such a momentous decision, as indeed is required under the EITI framework to which Ghana subscribes, dissipated quickly as the interview progressed.

When asked to comment on the campaign of Ghanaian Civil Society Organisations (CSOs) against the GNPC’s recommendations to Government to invest over a billion dollars in the two Aker-AGM blocks (Pecan and Nyankom), he dismissed every argument the CSOs have ever made out of hand, putting everything down to mischief or ignorance. As far as he was concerned, nothing said so far by the CSOs has any merit, nor can the activists be said to be motivated by even the tiniest shred of genuine concern.

His way of dramatically illustrating his attitudes towards the CSO movement was to suggest that the analysis its members have so far been producing must likely be the result of “indigestion caused by fufu”. Now, the CSO movement in Ghana has been accused of many things in the past, but excessive binging on fufu takes the prize for sheer imagination and vividity. It had to be fufu. What, with all the fears about cyanide in cassava and the well known effects of starchy calories bloating the guts with mind-numbing gases, the image of CSO activists loading themselves full of the stuff before retiring to their rocking chairs to type nonsense is just the painting of alarm one expects the head honcho of a major parastatal to draw at this juncture.

Apart from the colourful fufu metaphors, however, there were few insights to filter from the interview on Peace FM and the subsequent ones on Joy FM, both major radio stations based in Accra.

Having conceded that he finds Aker-AGM’s willingness to reduce their stakes to such low levels (10% for Nyankom and about 13% for Pecan) somewhat strange, the GNPC Boss’ only explanation for why Ghana conceded in the first place to hand over such massive rights, worth hundreds of millions of dollars, to Aker in June and December 2019 only to now buy them back at a premium was “desperation”. Ghana, according to him, was so desperate to have Aker-AGM develop the blocks that it signed away precious concessions over only then to discover that Aker-AGM’s owners had set up three renewable energy companies, suggesting a disinterest in moving forward with the development and production of oil on the two oil blocks. But he still trusts them.

A much simpler explanation of course is that Aker-AGM knew where to find suckers: Ghana. They knew that it would be easier to offset all their risks upfront if they engineered this very state of affairs. Buy into two offshore blocks in Ghana for $135 million, convince the country’s pliant leaders to raise your stake for free, have laws changed to remove checks on you, and then return after you have failed to make the investments you promised to warrant all these candies to collect a cool billion dollars before handing back the country’s own assets back to them to hold the bulk of the risk for further development. All the while retaining enough control of decision-making to ensure you are still in pole position to squeeze any margins from operations because your “joint operator” status remains intact. And should the poor, benighted, country still bumble its way into producing oil, well, your share is guaranteed. Only upside, never downside!

Ghana is not a country where leaders get asked hard questions. It was cringeworthy listening to the GNPC Boss make one implausible claim after another without a single rebuttal. In accounting for the shocking about face in 2019 which saw hundreds of millions of dollars of rights handed over to Aker only for the country to buy them back in just a year and half, he returned to the hapless theme of “energy transition”. In his world, no one knew of the energy transition in December 2019 when Parliament of Ghana was signing bonanza after bonanza off to Aker, based on the GNPC’s advice.

His esteemed team, one must assume, missed the commitments made by the energy majors in 2017. Though excessive fufu eating is unlikely to be the cause, something else must have plugged their ears and covered their eyes. They never heard about the Oil & Gas Climate Initiative and the strong endorsement of Net Zero (carbon emissions neutral) oil operations by the oil majors in 2016 either. Begs the question: can Ghanaians trust a GNPC leadership so cut off from the strategic trends in the industry they operate? Anytime a GNPC executive talks about the energy transition as being a sudden development warranting kneejerk remedies to long-term strategic problems they have created, they worsen fears about their current actions.

Nor was the head honcho of the GNPC averse to abject disinformation. His claim is that before Hess sold the Pecan block, the largest of the two blocks in controversy, to Aker for $100 million, they had spent a whopping $1.2 billion developing it. Very dangerous stuff. If Hess had spent that much and exited at $100 million, they would have recorded massive write-offs. But we know from their annual report covering 2018 (pages 10, 21, and 32 especially), the year they sold out to Aker, that they wrote off less than $300 million. GNPC’s continued efforts to inflate these “inherited costs” have massive implications down the line since our petroleum tax laws allow investors to recover some of the money they spend finding oil from the State through tax credits.

In a similar vein, he brazenly claimed that Aker’s discoveries since they bought Pecan exceeds 100 million in additional net oil resources. Yet in a presentation he made to the Cabinet and the Economic Management Team, it is clear that the only discovery made on Pecan by Aker is Pecan South East.

Chart extracted from page 12 of GNPC’s Presentation on the Aker-AGM blocks’ Acquisition to the EMT

The true picture, badly distorted in the interviews with Peace and Joy radio stations, is that Aker itself at the end of the entire appraisal campaign, which included all the 3 wells they drilled following their 2018 purchase of the Pecan block from Hess, which you might remember had already drilled seven successful wells before selling out to Aker, concluded that the total estimated new oil resources discovered were between 5 and 15 million barrels of oil. To have a situation where the Head of a National Oil Company is inflating the resources added by a foreign company in order to justify paying them more than they deserve is beyond frightening.

For those not too familiar with the subject, it bears emphasising the point: when Aker bought Pecan from Hess in 2018, the latter company had already drilled seven wells and made a firm estimate of discovered oil volumes of 340 million barrels. It had also found evidence suggesting additional volumes to the tune of 110 and 210 million barrels of oil could be recovered from under the ocean floor. Most of this work was done by 2013. Aker comes into the picture in 2018, drills three wells and conclude that an additional amount of between 5 and 15 million barrels of oil could be extracted. The CSOs consequently make the argument that since buying into the block for $100 million, Aker has not changed the commercial picture significantly for GNPC to want to pay the billion dollar figures they have been bandying around. To discredit the CSOs, the Chief Executive of GNPC concocts a mysterious figure of 100 million barrels as the additional discoveries made in Pecan.

Following the same pattern, he proceeds to accuse CSOs of lying about the potential of competing assets in Ghana’s oil basin to undermine the arguments his organisation has made for the commercial uniqueness of the Aker-AGM blocks, for which reason Ghana must pay so much just for the right to take the larger share of risks in developing them.

What did the CSOs say? We argued that if GNPC did not have an underhand interest in the Aker-AGM deals, they would have benchmarked the attractiveness of the Aker-AGM blocks with other “stranded” assets (commercial and sub-commercial discoveries that have not been developed by their lease owners in Ghanaian waters).

We deliberately highlighted discoveries that the IHS Markit Resource Ranking databases suggest have more contingent resources (loose estimates of oil volumes) or reserves (firm estimates of oil volumes) than Nyankom, the second and smaller of the two Aker-AGM blocks that GNPC believes is worth over $800 million and is aiming to acquire for nearly $400 million. These include the likes of Kosmos’ Wawa and Akasa and the abandoned Dzata block.

We also pointed out a particular block, which we would call the “Erin Block”, after its now bankrupt former operator, where far more work has been done than Nyankom. So far, only two wells have been drilled on Nyankom, and one was a hopeless disappointment. The Erin block on the other hand has seen as much as 14 wells drilled since the 70s, with considerable test production. The GNPC head honcho takes issue with our suggestion that Erin has contingent resources of 500 million barrels of oil equivalent compared with Nyankom’s highly speculative 127 million barrels (according to data provided by GNPC and Aker to Lambert). “Highly speculative” because Aker has not been able to come up with an official volume analysis estimate to its shareholders since promising to do so in its 2019 letter to shareholders, and also because only one successful (slim-bore) exploratory well has been drilled in Nyankom, and that unappraised. The GNPC Boss insists that Erin has sub-commercial volumes in the region of 50 million barrels.

In essence, the Head of the country’s National Oil Company (NOC) is bastardising blocks in the country’s oil basin that are still on the market looking for investors. Even after an independent reserves auditor has established contingent resources of 500 million barrels, the NOC Chief, because of his parochial interest in another deal, is broadcasting to the whole world not to come for this stranded block. Unbelievable! Of all the dangerous things the GNPC Boss said in his hurriedly arranged interviews, designed to ensure that no serious questions would be asked, this one takes the biscuit!

As if all the preceding was not enough, he started serving the Ghanaian public different numbers from what they had communicated to the Economic Management Team, Cabinet and television.

On page/slide 49 of the now legendary presentation by the GNPC to Government, the numbers indicated as capital costs on Pecan and Nyankom by Aker-AGM totalled $965 million (see below). This number is of course in conflict with the $1.2 billion that the GNPC boss now claims Hess spent on Pecan (which we dispute above), plus as yet unconfirmed amounts spent by the previous holders of the Nyankom block. The over $1 billion in costs are to be offset in the future by GNPC, Aker and a string of as yet unnamed “indigenous oil companies” against tax liabilities, without regard to depreciation and tax statutes of limitations, meaning simply that taxes owed the state will not be paid.

Extract from page/slide 49 of the GNPC Presentation to the EMT/Cabinet

Yet, during his interview, the numbers metamorphosed to $1.2 billion spent by Hess and $712 million spent by Aker and a host of finance charges he claims the foreign oil companies are right to saddle Ghana with.

As I have explained clearly and simply above, the foreign oil companies are owned by entities registered in their home countries. They file returns and taxes in those places. Their costs are duly recorded in compliance books. Hess disclosed spending of $280 million. Aker has disclosed spending in the region of $200 million. Adding a dime here and a nickel there, and making provisions for spending by passive partners, take us to roughly $600 million as eligible investments in the field so far.

Their willingness to inflate the amounts that these companies have spent in Ghana so far merely goes to reinforce our suspicions of GNPC’s motives. Especially also when such number gaming is used to justify crazy valuations and lay the grounds for future tax heists.

One of those suspicions relate to the role of as yet unnamed “indigenous oil companies” that are supposed to be introduced into the joint venture entity GNPC is proposing to integrate their operations with Aker’s after the acquisitions.

There have been serious controversies over the involvement of Fueltrade in Aker-AGM matters because the son of the GNPC head honcho is the CFO there. So when Lambert in its valuation presentations (see below) suggests a quiet sale of Quad’s stake in Nyankom (SWDT) to Fueltrade, one’s unease about the real dynamics at play here grows. Especially when CSOs had previously accused Quad of being a mere placeholder for others during the early campaign against the Government’s plans to downgrade Ghana’s stake in the Aker-AGM blocks (the same stakes that are now being repurchased at a premium).

Extract from page 8 of the Lambert Advisory Presentation on the Aker-AGM Blocks’ Valuation Exercise

No matter how anyone dices or minces it, the position of the CSOs remains robust so far: Aker-AGM has not done enough to de-risk the two oil blocks since paying $135 million for both. To the extent that the commercial picture has remained stagnant since they last bought them, and the external environment for fossil fuels worsened, leading to likely higher breakeven costs of production (decarbonisation pressures, equipment scarcity and lower investments in extraction technologies) and lower prices (major analysts now projecting a long-term oil price of $50) in the future, GNPC should not pay more than $400 million (or $2 per pro rata proven reserve barrel) to acquire the majority rights to participate in this highly risky venture.

A cue can be taken from Total’s acquisition of Tullow’s 33.3% stake in the much more prolific Lake Albert basin in Uganda for $575 million, where the French major updated the market with pride about paying less than $2 per barrel.

With only 340 million estimated reserves (repeat: Nyankom has not been properly audited, much less appraised) and the production horizon much farther into the future, GNPC’s willingness to pay roughly $7 per barrel is completely ridiculous.

If such counsel requires eating bowlfuls of fufu to arrive at, can we recommend that the GNPC Boss tries same, but with prekese-infused soup?

For more context, see:



We have a ritual in Ghana. Every once in a while, the country’s Auditor General compiles the highlights of what she found when her battalion of public auditors went through the books of various public sector institutions in line with the Constitution and various laws requiring this undertaking on a periodic (usually annual) basis.

Because all these institutions – spanning a wide spectrum from those that are part of the “core Government”, like Ministries, all the way to those organised on commercial lines, like Ghana Post Company -also retain some internal auditing capacity, which is regulated by the Internal Audit Agency, and in some cases also engage private auditing firms (about 25 of such firms get authorial credit in some of the public audit reports), the actual preparation of these highlights is a logistical nightmare involving a number of steps and hoops. But, eventually, the dossiers for different clusters of public institutions get compiled into different audit reports and all of them are presented to the Public Accounts Committee of Parliament through the Speaker for deliberations and to aid in the oversight of the Executive arm of Government by the Legislature.

Journalists get copies of these reports too. In blazing neon headlines, media houses compete with each other to present to Ghanaians the most lurid spectacles of waste, rapine, plunder and catastrophe. Then the news cycle shifts to something else. Until next time. Wash, rinse, repeat.

Having been an attentive observer, and sometimes participant, for quite a while now, in these shows, I think I have a few simple observations that can help explain at least a part of the reason why this fiasco persists.

On the face of it, the public financial management situation in Ghana is alarming. In the so-called “Ministries, Departments & Agencies” (MDAs) – what you might call “the core Government” – category, the irregularities have moved from $64 million in 2011 to $366 million in 2020. More than a five-fold increase. Depending on how you tally the numbers, the total “waste” in the Ghanaian public sector suggested by the reports exceeds either $1.5 billion or $3 billion per audit cycle.

Yet, certain features of the reports, and of the auditing process itself, urge caution in running with the headlines and chanting for public sector chiefs to be marched through the principal streets on oxen-carts to the guillotine. I will describe just four of these features for now and makes some modest suggestions about how to change things.

  1. Auditor General Reports in Ghana Routinely Confuses the Picture

If you are a regular reader of the reports like those of us in the civil society movement, you would soon learn that they are often riddled with fundamental errors, quite a number of which are as a result of public auditors not always knowing and understanding the organisations they are auditing well enough.

Thus, you will notice highly uneven coverage. Some public sector organisations get merely perfunctory coverage whilst others have the misfortune of being assigned diligent auditors who succeed in getting many pages of highlights about their auditees into the final report. In one fascinating example of this phenomenon, whoever handled the BOST assignment in the 2020 audit round went as far as digging into the organisation’s perimeter control installations, including CCTV configurations (with colourful pictorial illustrations to boot). Yet, in the same audit round, the Ghana School Feeding Secretariat entry in the final report is a grand total of 50 words.

The lack of standardization and the vast divergence in rigour due to widely varying capacity and experience with their assigned organisations among auditors can spill over into some comical outcomes. For example, in 2016, the Tema Oil Refinery (TOR) came under massive attack for having unlawfully debited $370 million from the country’s petroleum accounts. Considering that this amount was 75% of the total irregularities ($550 million) for that cluster audit, TOR found itself on the frontpages, with everyone calling for the executives to be hanged from the nearest lamppost.

It turned out the whole matter was the result of an overzealous but inexperienced auditor confusing the Customs outpost on TOR’s premises with the organization itself and therefore reviewing the wrong records. A detailed rectification was never made.

In one of this year’s reports, the famous Noguchi Memorial Institute of Medical Research was seriously excoriated for lacking the standards to conduct tests because all its laboratories lack ISO certification. Noguchi does have serious resource challenges. But it is not a single lab. Some departments, such as the Department of Parasitology, do have elaborate Quality Management Systems that have been audited to ISO standards.

Even in instances where the situation is one of competing opinions, one gets the impression that the Auditor General is not exercising complete diligence. The current squabble with the Ghana National Petroleum Corporation about the lack of parliamentary ratification for the national oil company’s “international business transactions” clearly calls for a legal opinion. The Supreme Court in a series of decisions from Balkan Energy, through Faroe Atlantic and Klomegah, to Assibey-Yeboah, has clarified the law in a manner that would suggest that unless a public corporation was acting as the “alter ego” of the central government, parliamentary approval of its international business transactions is not required.

The public squabble between the Auditor General and the GNPC about the latter having caused irregularities to the tune of $34 million confuses the picture precisely because the focus on parliamentary ratification detracts from the more worrying issues of procurement defects.

2. A Better Classification Scheme for “Irregularities” is Needed

The very notion of “irregularity” can be subjected to further analysis and better illuminated to protect the public purse. The current Auditor General Department’s classification scheme for irregularities focuses on the source of the irregularities but not really on the impact and degree of concern. The seven categories in the said scheme have been selected to identify the types of actions of the audited institutions that typically give rise to irregularities. So, for example, functional areas like: “payroll”, “procurement”, “debts/loans”, and “cash management”, among others.

However, a focus on impact and degree should lead to a sub-classification system, such as class 1 irregularities covering acts that have led to direct financial loss as a result of the clear abuse of process by a principal spending officer versus, say, class 2 irregularities relating to breaches of standards that cannot clearly be linked to direct losses and which may, in fact, emanate from environmental conditions beyond the capacity of the auditee (the institution or its senior management). Such an approach should also help bring better meaning to the quantification of these irregularities.

For example, when a public sector institution does not receive its budgetary allocation and therefore fails to pay the social security entitlements of its employees for a particular year, we cannot in good conscience sum up all the liabilities and call the final number a “loss to the state” or a “failure to make savings”, which are the two primary components of the current definition of “irregularities”. Such lapses cannot be quantified as losses to the state in the same way that they can if the situation had been one of embezzlement of the funds allocated for social security payments.

As a more concrete example, take the debt/loans irregularities category in the public boards and statutory corporations audit round of 2020. The number is a mindboggling $1.8 billion. But a full half of this amount emanates from debts that state-owned companies in the electricity and fuel value chains owe to each other. A good chunk of these debts has arisen because government price-setting does not always accommodate the full cost of delivering the service. There are sometimes implicit subsidies to citizens in the final pricing of energy.

Whilst the auditor does well in highlighting these policy dysfunction issues, should such “irregularities” and especially the monetary value placed on them, be bundled up with losses occasioned by embezzlement, inflated contracts in procurement scams and poor credit management?

In the 2020 MDAs’ round of audits, the “loans and debts” irregularities category – apparently leading to losses of $200 million – constituted a full half of all irregularities.  But look more closely and you will find that a striking 91% of the amount ($181 million) results from debts owed by public health facilities to medical suppliers.

These facilities owe the reported amount of money because Government policy does not allow them to fully recover the costs of delivering the services, or delays in reimbursement by the National Health Insurance Authority (NHIA) make servicing of debt owed to medical suppliers impractical. Does such a situation constitute a “loss” to government in a strictly audit sense? How is the Head of a Hospital supposed to respond or react to such a finding? If the idea is to shine the spotlight on general policy dysfunction or poor central government fiscal practices, is the auditing process the right lens and framework? What about the fact that for most people seeing the $200 million figure flashed about under the caption of “losses to the state from irregularities” their first instinct is to immediately conjure up notions of embezzlement and corruption? Should we continue to encourage this perception?

I am convinced that throwing up all these different types of “undesirable situations” into one pot confuses the picture and makes it harder to take the Auditor General’s report and apply it as a sanitising agent in the public sector. Loading the report with lamentable situations that are nonetheless not the direct responsibility of the principal auditees to fix leads to confusion about enforcement.

3. Not Everything is Material Enough to Dump into the Reports

Another, similar, feature of the reports that dilutes their effectiveness is the lack of enforcement of the materiality thresholds when presenting matters for Parliament to act on. Many of the pages in the reports can be cut out with no loss of value if materiality thresholds are properly observed. By this I mean that trivial matters should not be escalated to the attention of Parliament. The bulky reports give the impression of thorough work but careful reading reveals many details that can be left out to ensure that the reports are of a size that more people will read.

For example, when a report to Parliament identifies a Cocobod employee, Patricia Amankwa, as having failed to retire imprest of 190 Ghana Cedis, or calls out Coca Cola Bottling Company for owing 44 Ghana Cedis to Cocoa Clinic in Kumasi, one begins to get the impression of “padding”. Why should Parliament be asked to look into why Exim Guaranty owes Cocoa Clinic 76 Ghana Pesewas?

4. The Auditor General Should Not Steer Away from Politically Sensitive Matters

At the same time that the Auditor General was berating Ms. Patricia Amankwa for failing to return 190 Ghana Cedis out of an amount Cocobod advanced to her to cover costs incurred in their service, it was busy ignoring the much more egregious issues in the Frontiers Healthcare contract signed by the Ghana Airport Company Limited. Its auditor sent there somehow succeeded in not observing all the procurement and operational lapses that have surfaced in various investigations, including the lost potential gains and failure to secure regulatory approval for the overall setup.

At the same time that Exim Guaranty was being named and shamed for owing Cocoa Clinic 76 pesewas, the alarming waste of public funds arising out of the National Lottery Authority’s deal with Chinese vendors, brokered through TekStark, for Nexgo N5 lotto devices, leading to a potential loss of $3 million due to poor procurement and operational design, was being carefully avoided.

The Electoral Commission’s perennial abuse of public funds by failing to properly account for millions of dollars’ worth of electoral equipment that it bought between 2016 and 2019 (despite claims of not having bought any such equipment since 2011) failed to register even a whiff of concern in the published audit reports.

In this context, the former Auditor General, Daniel Domelovo, who was removed from office to howls of protests from Civil Society Organisations (CSOs) represented the only hope, so far, for serious transformation of the Auditor General’s Department into a fearless check on abuse of public funds regardless of which political heavyweight is involved. His bold decision to disallow spending authorized by the powerful ex-Senior Minister to Kroll in the UK sent powerful signals to the entire establishment that a new era had arrived. The surcharge may have been set aside by the Supreme Court on a technicality, but the principle was established. It would seem that the course for change he set has been prematurely terminated. That would be very unfortunate.

The sense that powerful people, especially those at the apex of the political system, are not exempt from the reach of public audits is the only way to restore confidence in the usefulness of these exercises.

Until the auditing process can get to a state where the public as a whole, but more specifically the civil servants on the frontline, are confident in its fair and impartial use to restore sanity to public financial management, regardless of the interests at play, findings shall continue to serve as little more than fodder for periodic circus shows.

Our onetime friend in the Ghanaian Civil Society Movement, the Founder of the Danquah Institute and strategist behind a dozen activist fronts, from Let My Vote Count Alliance to Alliance for Accountable Governance, has some advice for those of us still on the frontlines: keep your shirts on!

He says we are making too much of a fuss about a derailed train that is yet to crash. The government only has a mandate from Parliament to raise “up to $1.45 billion” to on-lend to GNPC for investment in the two oil fields steeped in controversy, Pecan and Nyankom, but it hasn’t spent the money yet so what is our problem?

First, Mr. Otchere-Darko ignores the genesis of this whole affair to make his position feel obvious and reasonable. Civil Society Organisations (CSOs) have won a hard fight globally to be at the table when natural resource deals are being discussed. They are not supposed to be on the sidelines watching the deals get cooked and only start agitating when the mess has been served and the public is being forced to eat.

The Government of Ghana decided to subscribe to something called the Extractive Industries Transparency Initiative (EITI), which enjoins it to sit with business on one side and civil society on the other side when crafting natural resource transactions and policies. No one forced this norm down Ghana’s throat. It recognized from the natural resource-fueled conflicts all over the world that prior and extensive consultations are critical in avoiding the dangerous waters some societies found themselves when they ignored the need to get citizen groups actively involved in shaping natural resource policies and transactions.

Barely a year after a bruising tussle with CSOs over the Agyapa deal, the Government jumps into a similar transaction, and gives Parliament barely two hours to review the merits (again, reminiscent of Agyapa). Parliament, in turn, solicits no input from any segment of society, yielding an outcome complete with the same features of valuation-confusion, passive beneficiaries, and historical amnesia, and yet one of its leading strategists is feigning surprise that activists are up in arms? This beggars belief.

The second piece of context that Mr. Otchere-Darko ignores is the unique history of these two oil assets. The “how we got here” narrative is worsened by the sheer fact that CSOs have long been on a collision path with the GNPC and Aker about what we believe are serious collusive practices to rip Ghana off.

In June 2019 and December 2019, Government of Ghana went to Parliament to make shocking changes to Agreements governing our relationship with Aker’s key actors. The combined effect of these changes led to Ghana sacrificing shares it owned in the two oil assets and drastically reducing the say it has in how they are managed.

These actions by Government were at the behest of the GNPC. When the same GNPC comes back to advise the country of a need to spend hundreds of millions of dollars buying back the same shares and management involvement that Ghana barely a year and half ago relinquished, we have a right to be outraged. Especially when the country is losing hundreds of millions of dollars due to the earlier climbdowns. Shockingly, Otchere-Darko doesn’t even recognize this aspect of the CSO’s angst.

Third, the CSOs are not aligned with the substance of the GNPC’s fundamental posture as he portrays. The majority of us do not believe that Government should take a majority in Nyankom yet. This is a highly risky asset because it has not been de-risked through sufficient exploratory and confirmatory drilling. Only two wells have been sunk there, but one was a disappointment.

The engineering required to get oil out of Nyankom is highly complex, suggesting likely recovery issues down the line. On this score, there is a fundamental policy disagreement with GNPC. Rather than an outright majority, we favour an options-based contracting approach with very little financial commitment upfront. Especially when the current owner has an obligation to keep developing the field to de-risk it or relinquish same back to Ghana. Even if GNPC was to buy more of the field today, as it wants to do, oil production is not expected until 2026. If the field is indeed as lucrative as some suggest, then the current majority owners will de-risk it further. If it is as risky as we believe it is, then it will be relinquished to Ghana anyway and the country won’t need to pay ridiculous amounts of money just to incur the high risk of developing the asset on top.

Another reason why Government doesn’t have to do the deal in a rush as far as Nyankom is concerned is the fact of the availability of other compelling options. GNPC has tried to paint a picture in which only Nyankom and Pecan can be developed as standalone operations. They have also consistently pushed this view where only Aker can offer so-called “apprenticeship” that GNPC apparently sorely needs. Both arguments are tenuous.

There are “free” fields lying around in our waters that with a little ingenuity can be developed as “marginal fields”. The rewards for these fields may not be as great as the Jubilees, TENs and Sankofas (the three main producing assets in Ghana today), but if GNPC wants to “learn by doing”, it can easily start with those. Dzata, relinquished by Vanco/Lukoil quite a while ago, is one such example. Other prospects that won’t be free but will certainly be cheaper are Wawa and Akasa owned by Kosmos, all of which have been “stranded” now for almost a decade. Some of these fields, even the marginal ones, are close to production infrastructure, allowing for infrastructure-sharing to overcome the “standalone operation” worries of the GNPC.

The juiciest of all these prospects is Erin/Camac’s block where as many as 14 wells have already been drilled, several of them tested for production, and evidence of contingent resources established to the tune of 500 million barrels of oil. This is a field where discoveries have been made since the 70s. Compare its pedigree with Nyankom’s one well drilled and volume estimates that may well amount to only about 10% to 20% of Erin’s (by the way, Nyankom’s 127 million barrels of oil estimate being bandied around after just one well sunk is viewed with suspicion in the industry). Best of all, Erin is reportedly bankrupt and may relinquish this field with some prompting. If GNPC wants to “learn by doing”, this is very likely to be a cheaper play in terms of the initial rights.

About apprenticeship, it is evident that GNPC is not being sincere. It has had a decade to turn its joint venture with Technip, one of the world’s most sophisticated oil field engineering services companies, into a robust technology capacity play, and chosen to underinvest. We understand that it is even yet to pay for its rights to take up 51% of its stake in the joint venture. Its Gosco subsidiary has had the status of an operator in a block for half a decade now and refused to invest to develop the technical partnerships needed to work the block. From all the facts available, GNPC is clearly not a company actively looking for apprenticeship.

Apprenticeship, at any rate, shouldn’t be used as a cover to blow hundreds of millions of dollars on assets when the intended “master” in the apprenticeship relationship – Aker – is itself reliant on these same oil field engineering contractors that GNPC has ample access to. For example, in order to find out how much oil is in the fields under discussion, Aker recently gave contracts to Haliburton to do some probing. Ghana is courting Haliburton to set up an oil services hub in Ghana. Why precisely does Ghana need Aker as an intermediary in building the same relationships?

If Ghana simply needs technical apprenticeship, it is just a matter of refocusing the resources GNPC has been spending to increase its clout in the Ghanaian corporate sector, such as giving loans to commercial banks, buying game reserve lodges, and wasting cash on distressed gold mines. Whilst such activities clearly increase the leverage of GNPC’s top brass in Ghana’s clientelist political economy, they do nothing for building technical operatorship capabilities. Not surprising then that after inserting a clause in the Nyankom block’s 2014 agreement for GNPC to become an operator in 7 years, the organization instead chose to reduce both its stake and say in the block.

The above discussion was about Nyankom. Now to Pecan, where the business case for Government increasing its stake is admittedly more robust. We, nevertheless, still have fundamental disagreements with the Government, and the GNPC advice it is relying on, about strategy. We insist that the valuation be guided by factors of analysis currently missing. One such factor is our leverage with Aker.

Aker managed to arm-twist Ghana to rewrite the Pecan agreement on the basis that Ghana having less stake and less say in how the field is developed is how the fields will be made more attractive for investment. Against better advice from the CSOs, GNPC goaded the Government into conceding. Now, after struggling to raise the money to invest despite doing everything, including cutting back on developing the three commercial finds to focus on just one etc, Aker has now returned seeking to front-load some gains, cut its risk massively and leave Ghana holding the can. What should a patriotic Ghanaian negotiator do in such circumstances if there were indeed no undertones of collusion? If the GNPC wasn’t motivated by the use of “operatorship” and “energy transition” talk to just get its hand on loads of money to spend on increasing its commercial clout?

Let us remember that it was this same GNPC that took $47 million of Government money in 2015 specifically to buy 10% of this same Pecan field and then spent the money on something else. Today it wants to buy 27% more for nearly a billion dollars claiming that the stake is actually worth more than $1.5 billion.

CSOs cannot be chill about this as Otchere-Darko advises because we have history to guide our thinking. GNPC has shown itself to be a two-facing, forked-tongue, operator. We cannot assume that it is operating in Ghana’s best interests. It is up to GNPC to convince the public despite their historical misbehavior. Through their advocacy, CSOs wants GNPC to keep looking over their shoulder as they go about this transaction.

Particularly also when the GNPC has already contrived a valuation of $1.583 billion for Pecan and thus set a high bar for the negotiations. The collusive nature of this whole enterprise was not even hidden: GNPC teamed up with Aker to hire Lambert Advisory, gave the London-based consultants a set of assumptions together with selective data, and told them to come up with a valuation in two weeks. In these circumstances, CSOs must aggressively push their own narrative based on the data available to them. They must question the assumptions driving the process as a whole, and seek to influence the final shape of the transaction.

It is completely befuddling that Mr. Otchere-Darko who spent a decade and half contending with state institutions like the Electoral Commission about the integrity of their data and the propriety of their actions now thinks that the best course of action open to CSOs is to quietly wait on the platform as the derailed train hurtles down the track to wreckage ahead. Is that how CSOs, when Otchere-Darko was in the fold, tackled STX?

Given what CSOs know about how the $1.583 billion valuation for Pecan and $804 million valuation for Nyankom came about, why should they, all of a sudden, be inclined to believe that Bank of America Securities (an entity affiliated to some of the some advisors that worked on Agyapa) will help get Ghana a fair deal when its terms of reference are as opaque as all the previous advisory enterprises that got us here in the first place? Would a dedicated CSO movement not seek to influence the process before some other rabbit is suddenly pulled out of the hat?

The position of the CSOs on Pecan’s fair valuation is straightforward. The engineering dynamics so far favour a breakeven cost of producing oil on the field of $35. This is what the extensive record of studies from Hess to Aker shows. The sudden, unproven, claim that Aker has found some new innovative concept that can do the production at $30 breakeven is dubious.

Further, we have the guidance of the former Minister of Energy that recovery rates in Ghana’s waters are in the region of 25% (this, by the way, was when he was highly motivated to convince Ghanaians that the Aker blocks are not all that valuable hence the need to give away our rights in them to appease Aker so that they will raise the investment needed for their development).

Since Aker bought the Pecan block in 2018 from Hess, it has only drilled two truly successful wells and the best net pay analysis we have seen suggests that resources added were as low as 5 million barrels and capped at 15 million barrels. In essence, the commerciality of the field is unchanged from what Hess left behind (recall that Hess sold its rights for $100 million). Since the time when Aker thought that the outstanding work and risk warranted paying only $100 million for the right to bear the additional risk of commercialising the asset, nothing much has happened to suddenly transform those same rights into billions of dollars. Whatever contingent resources have been added to the marketing deck are flimsy at best.

We are therefore inclined to use the 246 million barrels of proven/probable (2P) volumes estimate and the $50 long-term price of oil favoured by analysts such as Wood Mackenzie who believe in any “energy-transition” effects impacting demand as much as supply (unlike Lambert, who think the impact will be on the supply side alone). In that posture, we are fortified by corroborating forecasts by the likes of BP and the World Bank. We will accept the 10% discount rate used by Lambert (though we are more bearish than they are).

When the numbers are reworked this way and the cashflow from Ghana’s planned stake of 37% discounted to the present, the fair value of the field ranges between $202 million and $400 million depending on how one tweaks the variables. CSOs therefore have a fundamentally different perspective from GNPC, the government’s primary advisor on this matter. CSOs have other quarrels with GNPC, such as the expenses it claims the Aker companies have made so far, which contradict filings the companies have made in their home countries, and which have grave revenue implications for Ghana down the line. There is a fear that GNPC’s posture in that regard could lose the country $600 million. One cannot therefore in good conscience tell CSOs to just relax.

By making our case forcefully for the assumptions driving the deal, and its secondary effects, to be made transparent and interrogated aggressively, CSOs are setting the stage for a showdown over any strange and fantabulous buy price recommendations that Bank of America Securities may come up with. In essence, this time, CSOs are working to prevent any situation that might make it easier for GNPC to use another Lambert Advisory type opinion to shore up a weak, and quite frankly sham, negotiation strategy.

Whilst CSOs are absolutely open to serious engagement with the GNPC and other public sector actors working on this situation, the starting premise is to influence the outcomes in light of public interest. Hopefully Mr. Otchere-Darko can facilitate that engagement without first seeking to preset the terms of engagement.

CSOs thank Mr. Otchere-Darko for his generous offer of strategy lessons on how they should engage in this quest to defend the public interest of Ghana. For now though, we are passing.

In between management meetings this morning, my notifications bell continued to buzz. So, I paused to check. Messages were dropping fast: Bob Hinson says you’re “smearing” GNPC. What’s going on?

There was a link, so I clicked. And there it was, a curious 9-point article by Professor Hinson of the University of Ghana Business School announcing “the true facts” about the GNPC-Aker saga, and gently chiding “a civil society actor by name of Bright Simons” for “misrepresentations”.

“Curious article” because in all the decade and some that I have been involved in energy policy activism in Ghana, Professor Hinson has rarely shown up on the subject. I don’t recall him expressing much interest in any of the raging issues cropping up all the time in the industry.

And curious also because the article comes across as a rejoinder to a bunch of stuff I have written, yet it was published in the Daily Graphic, which has studiously refused to publish any of the work I have done so far on behalf of the CSO movement campaigning against the deal.

Still, Professor Hinson is in the business of helping folks simplify complex ideas for large audiences, so we welcome his late intervention in energy policy matters. It should advance my personal philosophy in policy activism: ripping apart the jargon that so-called technocrats like to hide behind to rip off the country. And, let’s face it, this is a dry subject so the more famous academics we have chiming in, the better our chances for rousing a sleepy national audience.

Now to his 9-point agenda to kill falsehoods and lift the banner of truth. Hopefully, this time around, the Daily Graphic finds it in them to publish this “counter-rejoinder”.

Professor Hinson’s unfamiliarity with the issues showed early on in his nicely formatted but weakly argued piece.

He preambles his 9 points with a sweeping assertion that the Natural Resources Governance Institute (NRGI) has “voted” GNPC as the “best governed National Oil Company (NOC)” in sub-Saharan Africa. He does not provide a year or program/award name. Are we to take it that GNPC was awarded this tribute by the NRGI in respect of all their measurements for all eternity?

The NRGI’s approach to recognizing state performance in this area is via the Resource Governance Index. Everyone can find out what the NRGI thinks of a country and their core institutions by visiting:

NGRI does not cover all of sub-Saharan Africa in depth. But in respect of oil and gas governance, it rates Senegal, for instance, higher than Ghana (you can verify on the website above):

NRGI’s Resource Governance Inter-Country Ranker Chart

It is very doubtful that the NRGI, considering its standard methodological approach, will coronate GNPC with such an expansive crown as portrayed by Hinson.

Did GNPC Overestimate Long-term Price of Oil to Inflate the Valuation of Pecan-Nyankom?

  1. Hinson takes issue with my use of $50 per barrel as a long-term price forecast for oil asset valuation. He insists that “not a single” analyst uses this figure. A price assumption in a forecasting model is on a per scenario basis. There is no such thing as a permanent figure that binds entire institutions for all scenarios. It also depends on the time horizon, which in this case is bound by contract tenures in our petroleum regime. It is not CSOs who decided to give the “global energy transition” primacy in this discussion. It is GNPC. Any price forecast worth its salt in this debate must accommodate it wholeheartedly.

A price forecast that takes that phenomenon into account and stretches for as much as 30 years into the future to align with the transaction parameters would differ remarkably from some Morgan Stanley analysis that focuses on short-term dynamics, for example.

We can cut Hinson some slack though, given his historic lack of interest in the subject. Since he seems genuinely unaware of recent long-term forecasts that incorporate parameters relevant to the GNPC-Aker deal, I will point him to this recent one by Wood Mackenzie, which does happily use the $50 per barrel figure –

For a short-term comparator, he can try the United States Energy Information Administration (which also uses $50):

Of course, one of the important parameters in the transaction under discussion is finding a benchmark blend that proxies the liquids expected from Nyankom and Pecan. WTI and Brent are as good as any for our current purpose, so I will also point Hinson to Fitch:

McKinsey prefers to hedge “between $50 and $60”:

Then there is the issue of whether to use nominal or real analysis, considering that the Lambert Advisory valuation matrix already uses a Present Value computation.

A small piece of advice for the eminent Professor Hinson: next time he wants to use “never” in a quasi-academic monograph, he would do well to, at least, consult a few databases, or as they say in his line of work, conduct some basic literature review, before being so categorical.

Are the Norwegian Billionaires Due for a Potential $1 Billion Windfall?

  • 2. Professor Hinson also disputes the $1 billion windfall number. I had in various commentaries argued that should GNPC have its way, the Norwegian billionaire (Kjell Inge Rokke) who controls Aker and his family would be making a billion dollar windfall in their decade-plus dealings with Ghana.

In disputing this, Hinson limits himself to the farm-out price of $1.1 billion that Rokke wants to flip pieces of both assets to Ghana for and the costs he has incurred so far. But even here Hinson gets the arithmetic hopelessly wrong. Rokke is not selling the entire stake he picked up for approximately $200 million three years ago. He is retaining nearly 30% (crude composite residual) and also waiting quietly to offset the proportion of costs linked to that residual equity against future taxes. Not to talk of the displacement of costs to GNPC through the proposed arrangement of Aker buying the FPSO and renting it at inflated prices to the proposed consortium.

Professor Hinson seems so unfamiliar with petroleum accounting fundamentals that he ruins a good debate with such weak framing.

Has GNPC been helping Aker-AGM to Misrepresent their Costs in Ghana?

  • 3. Hinson’s strange response to our argument that Hess, Aker and TRG discloses their costs through filings in more stringent jurisdictions and as such we are better served in using those filings as our best source of truth is to airily wave his hands away.

He insists that those filings do not include a bunch of costs the international oil companies (IOC) incur in Ghana, and which they choose to disclose only to their friends in the GNPC. GNPC has in fact recently talked about a “data room” set up specifically for them to “audit” those costs.

In case Professor Hinson doesn’t know, GNPC is not a regulator in the petroleum industry. It is not the Ghana Revenue Authority. And it is neither an auditing entity nor an audit standards regulator of any kind. Whatever sweetheart arrangement it has with Aker and Inge Rokke for the latter to selectively disclose data about costs to it but not to their own regulators in their home countries has no real import in this analysis. We prefer to use data disclosed in stringently regulated jurisdictions where such sweetheart arrangements are not trumpeted as evidence of rigour.

Does Professor Hinson Even Know Which Aker We Are Talking About?

  • 4. Prof Hinson is not happy that we will highlight the irony of a GNPC founded in 1983 seeking to pay large amounts of money it can’t spare for the privilege of understudying an Aker founded in 2004. He insists therefore that Aker has been in operation for more than 175 years.

Given Hinson’s sudden interest in the issue, it is not too surprising that he would not know that the Aker that was founded in the 19th century is not the one this debate is about. That despite the complex historical evolution of the Aker brand, the Aker under discussion is the one incorporated in 2004 in Norway, as can easily be established by a reference to the Oslo registry of companies (

Professor Hinson’s eminence notwithstanding, his latest essay does not, respectfully, vindicate his research prowess. At least, he could have referred to Aker’s own press releases for a simplified narrative of the matter (example:

Did the Lambert Advisory Valuation Rely on Anything More than GNPC and Aker’s Self-Serving Numbers?

  • 5. I was on the call with Rajeev Madhavan of Lambert Advisory, the firm’s whose valuation is being currently relied upon by the Government to raise the $1.45 billion for the deal, when he candidly informed his CSO audience and, in specific responses to questions from Dr. Theo Acheampong, reaffirmed that he did not have the opportunity to interview the qualified reserves auditors (QRAs). He also openly admitted the fact of his not having been given access to the actual audit reports. The entire valuation exercise had a timeline of two weeks after all. In fact, considering that Nyankom hasn’t even been audited, the only field where “third party reservoir data” can even be referenced in this discussion is Pecan. Rajeev stressed that his analysis was strictly based on the “operator’s case”, meaning information he has been supplied by GNPC and Aker-AGM, who commissioned his employers, Lambert.

Hinson mentions anonymous sources in the “civil society space” who have told him otherwise. We advise him to contact Lambert Advisory or his friends at the GNPC for the zoom recordings.

What is Hinson Going on About Regarding “Physical Merger”?

  • 6. The most bizarre of all the lacklustre arguments served up by Professor Hinson is a “rebuttal” to a claim I had purportedly made about Nyankom and Pecan being “physically merged”. I have been around the energy policy space for more than a decade. I have never experienced an argument about the “physical merger” of two license areas being developed as a joint asset. The concept makes no sense.

Everyone knows that a “merger”, using the term loosely, of two fields in the petroleum sector invariably involves a range of scenarios: merger of the leases (which Hinson, ever the guru on Ghanaian petroleum affairs, assures us is impossible despite the plenary powers of Parliament), unitization for optimal recovery (which strictly speaking does not require reservoir straddling under Ghanaian law), or tie-backs and other mechanisms to enable the sharing of production platforms and associated infrastructure. The merger of Nyankom and Pecan in the context of this conversation can only refer to the plans shared on slide 26 of the GNPC’s presentation to the Economic Management Team about “merging” the operatorship of the two fields.

Therefore, that whole line about someone talking about the oil fields being physically blended together with giant shovels is a waste of everyone’s time.

Are there Stranded Assets in Ghana that Offer Better Value than Nyankom?

  • 7. For an article that sets out to address “misrepresentations”, it takes the biscuit for the author to blatantly resort to the same thing complained of in an attempt to win a debate. I have never said that there are stranded oil discoveries in Ghana that have more oil than “both” the Nyankom and Pecan fields.

The reference I made was specifically to Nyankom, a risky, unappraised, field that may well not even be commercial. I said that Wawa, the Erin find and Akasa all have more estimated resources than Nyankom. We used the IHS Resource Ranking database in conducting our assessment and it underlies our assertion. This is the same database relied upon by Lambert, the GNPC and Aker’s preferred valuer. On this one, Professor Hinson is thus out on a limb and, dare I add, out of his league.

Has Aker Added Enough Value to the Blocks it Bought to Deserve the Windfall?

Just before Aker started to look for a buyer for 50% of the Pecan asset in June 2021 because of the funding challenges it was facing (see:, and around the time it suspended its Final Investment Decision on the field, its prospectuses were still bandying around the same resource levels (see, for instance: and, earlier:

Nyankom, on the other hand, is yet to be appraised. A single discovery well does not a commercial oil field make. So, at this point, the true value created remains speculative.

  • 9. The last point in Professor Hinson’s 9-point thesis is totally incoherent. He says that Aker/Rokke have not changed their mind about spending $4.5 billion nor have they decided to lower their risk by spending $2.5 billion instead. But this is not a secret at all. Aker has publicly stated that the initial Plan of Development capital expenditure has been revised lower by 50%, meaning $2.2 billion. Adding contingency takes the number to roughly $2.5 billion (see, for instance:

That difficulties in fund-raising have led to radical revisions to Aker’s plans in Ghana is so widely known that had Professor Hinson been even half-attentive in this space he would not be picking a fight on this point.

As I said in the beginning, the CSOs active in the energy activism and advocacy space strongly welcome the interventions of Ghanaian academics in this debate, particularly those like Professor Hinson who have expertise in simplifying the issues to attract broader interest. Let’s admit it, this debate could do with much more public interest.

We only ask that they take a bit of time to understand the issues, do the research and then engage so that they can be fair to those of us with perspectives opposed to the stance of their friends at the GNPC. Not too much to ask for, I hope.

Further Reading

Bob Hinson’s 9-Point Agenda:


Ghana wants to borrow $1.45 billion to invest in two seemingly “stranded” oil assets – Pecan and Nyankom – off its coast.

 $1.1 billion will go directly to the current Norwegian controllers of the two fields – mainly Kjell Inge Rokke of Aker ASA, his family fund and spouse – and the rest will underwrite some of the estimated $2.5 billion the Norwegians claim is still needed to get the first drops of commercial oil out of the bigger of the two fields – Pecan – in 2024.

Why are Ghanaian activists up in arms? Getting the full picture will require trawling through thousands of pages of dense documents. But the simplified summary of some of their key concerns below is a good start.

1. GNPC – Ghana’s national oil company – took $47 million from the government to buy 10% of the *Pecan field* (then operated by a company called Hess) in 2015. They took the money and didn’t buy the stake. Now they want to spend more than $750 million for 27% more stake in the same field, thus valuing the foregone 10% stake at over $250m. In fact, four years later, they would even have their entitlement to ~49% of the field whittled down to 10%. An organisation prone to such strategic mistakes should have all their spending plans scrutinised very carefully. Yet, the Ghanaian Parliament spent just two hours evaluating their latest request before giving them a mandate on August 5th, 2021, to spend up to $1.45 billion on this new frolic.

2. The block that the Nyankom field – the smaller of the two fields – is on was actually operated by the GNPC in 2013, when it held 79% of the stake. They kept renegotiating their stake downwards until by 2019 they only owned 15%. They now want to spend precious public money on buying 55% more of the block to take their stake back up to ~75% so they can become a “co-operator”. This means paying nearly $400 million for something they once had for almost nothing. Again, clearly an organisation suffering from serious strategic myopia that needs independent babysitting.

3. At any rate, a company doesn’t really need to own a large piece of an oil block at inflated prices to become a field operator. After the proposed $1.1 billion deals are through, the Norwegian billionaires will own just about 13% of Pecan and 15% of Nyankom but they will still become the de facto operator of the merged field. GNPC actually justifies the deal on grounds of an opportunity to understudy Aker after the deal. Clear evidence that oil field “operatorship” is about technology, human resources and reputation. What has GNPC done to acquire these virtues with all the money it has been receiving from the state – roughly $200m a year – so far? It is quite depressing that an organisation founded in 1983 to produce oil, with many opportunities to do so in the past, would want to pay so much to undergo pupillage with Aker, which was only founded in 2004, just four years before they first entered Ghana.

4. If it is merely having high stakes in a block and the title of “Operator”, then GNPC is already an operator. It currently operates the Offshore South West Tano (OSWT) block through its subsidiary GOSCO. Why has it failed to invest in that field since 2016 and why hasn’t it used this opportunity as an operator to acquire capabilities? Why hasn’t it done any drilling and serious exploration on OSWT? How then can it justify paying inflated sums on stranded assets as a path to operatorship?

5. It cannot be just about money because in 2018 and 2019 GNPC offered guarantees for other state owned entities to raise $1bn for mostly consumption rather than investment. It costs about $50 million on average to drill in the various blocks in which GNPC has a stake in Ghana, including those on which it is the operator. If operatorship was indeed the goal here, why has GNPC never bothered to drill?

6. Instead, GNPC has been spending its money making shoddy investments like the troubled Sankofa Prestea gold mine and an underperforming motel in remote forest reserves in Ghana. Once again, it is clear that GNPC likes to anchor commercial deals more than it wants to acquire technical capabilities. Consequently, its desperation to raise billions at this stage must be looked at from the point of view of the commercial contracts it can control and not in terms of any desire to acquire the skills, technologies and reputation associated with operating producing oil fields.

7. This bears repeating: GNPC is already an operator on Ghanaian fields like OSWT, and has had stints as an operator (with nearly 80% stake) on even the Nyankom field it now wants to buy for roughly $400 million. It has just refused to invest in the hard things that will make it a good operator. It has instead focused on side gigs and deals.

8. GNPC hints that this time things could be different because it shall be understudying Aker. But GNPC is already a statutory and business partner of all oil companies that have ever operated in Ghanaian waters, many with a far superior track record and capacity than Aker. It can enter into technical contracts with any of them for far cheaper than what it intends to pay to buy Aker’s mentorship. It already has just such a joint venture with well regarded oil services & technology company, Technip, that it has failed to resource adequately for almost a decade now.

9. It bears emphasising the argument of the Civil Society Organisations (CSOs) and their activists: both fields – Pecan and Nyankom – that GNPC seeks to buy are grossly overvalued. The method used to value them, the so-called Discounted Cashflow (DCF) method, looks at future earnings. However the long-term price of oil used ($65 per barrel) is far higher than what most analysts are using nowadays (~$50) and the projected oil volumes from the fields are highly speculative. One of the two fields – Nyankom – has only one successful well drilled so far (the other well sunk there failed), and it has not been appraised, a critical pre-requisite before an oil field can be considered investment-worthy. At least 6 more successful wells will have to be drilled there to give investors comfort about its prospects. The second field, Pecan, is in very deep waters and will be expensive to run so costs are likely to be high. Taking all these facts into consideration, the Activists are of the view that the fair value to pay for an increased stake and role in developing the two fields is closer to $400m and not $1.1 billion. After all, the Norwegians are selling Ghana roughly 70% of assets they picked up for less than $200 million 2 and 3 years ago respectively.

10. To obscure the inexplicable appreciation of the value of the fields, the GNPC argues that $1.2 billion has been spent on useful capital infrastructure, which the Norwegian billonaires would have had the right to offset against taxes paid to Ghana under our petroleum accounting laws. These foregone taxes would have been repatriated from Ghana but shall now stay put here because of the deal. Very strange argument. First, the filings made by the Norwegians in Norway suggest far less has been spent on the fields – just a little over $300 million. The companies that sold them the fields – Hess and Petrica – also issued reports from which we can glean spending of a little over $300 million. What GNPC is really saying here is that, even should this venture prove successful, Ghana stands to lose over $600 million in future taxes due to shady accounting if its version of history is left unchallenged.

11. Then there are concerns about crony dealings. Some Ghanaian CSO activists met with the people GNPC says they and Aker hired to do an independent valuation: Lambert Advisory. In their presentations, they revealed that a company called Fueltrade has been inserted into the Nyankom deal for 5% (a stake that all along everyone thought was owned by a company called Quad). How come this transition was never publicised, considering the controversy surrounding how both Quad and Fueltrade came to own their stakes in the first place?

12. In a similar vein, in GNPC’s presentation to their Ghanaian cabinet before it hurriedly approved the deal (four days before the proposal was sent to Parliament for further ratification), they mention that after they increase their stake by 27% more in Pecan and by 60% more in Nyankom, they will merge both fields and create a Special Purpose Vehicle (SPV) to own the asset jointly with the Norwegians (along with pre-existing equity owners like Lukoil), who despite becoming minority owners (with about 20% combined stake) will become de facto operators renting out production platforms to Ghana. They also revealed that 5% of the SPV shall be allocated to “Indigenous businesses”. Given that this is a “back-in” transaction by an existing equity holder, funded through a sovereign loan, the thought of lurking private beneficiaries deepen concerns about cronyism.

13. Consider that, in 2019, Government of Ghana went to Parliament twice to amend the agreements covering both fields, and on each occasion Ghana’s stake was lowered and amendments made to give the country very little say in how the fields are run. Aker and its Norwegian billionaire controllers insisted that this was necessary to be able to raise money to develop the fields. After struggling to raise the money, they have decided to dump the fields on Ghana at an inflated price, whilst staying on to rent equipment to Ghana also at inflated prices. What is worse, Ghana wants to pay for the privilege of being ripped off.

14. For all the above reasons the entire arrangement looks very fishy. It looks like Aker/Inge Rokke have teamed up with GNPC big fishes to rip off Ghana in diverse ways, first by tricking Ghana to give away its rights for nothing and then getting the country to buy them back at the cost of a fortune. And they will succeed unless they repent or are stopped.

15. This assessment is particularly apt when GNPC makes it look as though the Aker assets are the only ones available if it wants to take charge of an oil producing field. A false premise that bestows undue leverage on Aker in the negotiations. The truth is that there are other seemingly stranded fields in Ghana with discoveries that have more estimated oil resources than Nyankom and are available for cheaper if GNPC’s genuine intent is to become the operator of a producing field. Such prospects include Kosmos’ Wawa and Akasa, and Erin Energy’s Expanded Shallow Water Tano. The leverage is therefore actually on Ghana’s side. It is thus unpatriotic, from where the CSO Activists stand, for GNPC to be bearing down on the path it is currently on. But it is not too late to redeem themselves.

Additional insights are in this article.