GNPC Never Made ‘$4.3BN Offer’

…To Kosmos Because It Wanted Alleged Violation Of Petroleum Law Rectified First Before A Formal Bid For Shares In Jubilee Field!

It is now official. It has also been confirmed that the Ghana National Petroleum Corporation (GNPC) and the Government of Ghana (GoG) have never, REPEAT, never, made a formal offer or proposal to Kosmos for the acquisition of Kosmos’ stake in the Jubilee Oil Field as speculated in sections of the local and international media.

This critical disclosure was made on Joy FM last Saturday (Newsfile) and again on Monday (mid-day news) by Mr. Kwame Ntow Amoah, Head of Economic Evaluation Team of GNPC. Interestingly, Mr. Amoah’s disclosure was only a reinforcement of views that had been publicly articulated by GNPC Board Chairman, Mr. Ato Ahwoi and GNPC Chief Executive Officer, Nana Asafu Adjaye in November, 2009.

Some pro-Government media circles, political functionaries and oil industry analysts in the last few months, have claimed that the GNPC and Ghana Government had formally offered or proposed to buy the stake Kosmos was seeking to offload at the value of $4.3bn but Kosmos had stubbornly refused to ‘play ball’ and was rather interested in selling to Exxon-Mobil at a lesser (lower) value of $4 billion.

However, as reported in last Thursday’s edition of The New Crusading GUIDE, highly-placed sources close to Kosmos CATEGORICALLY DENIED THAT THE GNPC (AND GHANA GOVERNMENT) HAD EVER MADE ANY FORMAL OFFER OR PROPOSAL TO KOSMOS TO BUY ITS STAKE IN THE JUBILEE OIL FIELD.

The Kosmos sources challenged the GNPC and Ghana Government to provide documentary evidence of any formal offer and/or proposal which they (GNPC & Govt) might have made to it (Kosmos), to support the media speculations that had been making the rounds in the last few months.

Denying that the Ghanaian authorities (GNPC & Govt) had formally offered or proposed a financial package to buy its (Kosmos’) stake in the Jubilee Oil Field, our Kosmos sources quipped: “IT IS SHEER PROPAGANDA THAT IS BEING PEDDLED AROUND TO OSTENSIBLY CREATE THE IMPRESSION THAT ALTHOUGH THE GOVERNMENT IS WILLING TO PURCHASE THE SHARES, KOSMOS HAS NOT BEEN CO-OPERATIVE ENOUGH”.

The sources further intimated that since last year Kosmos has given the GNPC and the Ghana Government many opportunities to put forward a formal financial proposal but all to no avail because the GNPC has been insisting on the rectification or regularization of the purported or perceived violation of data confidentiality by Kosmos as a pre-condition for putting forward a formal bid for Kosmos’ stake in the Jubilee Field.

The position articulated by the Kosmos sources was vindicated/confirmed last Saturday on Joy FM by Mr. Kwame Ntow Amoah to the effect that “WE (GNPC) HAVE A DIFFICULTY MAKING A FORMAL OFFER BECAUSE WE WOULD HAVE PARTICIPATED IN A PROCESS THAT WE DEEMED NOT TO BE REGULAR. THAT PROCESS IS A FLAWED PROCESS AND IF WE HAD PARTICIPATED IN A PROCESS THAT WAS FLAWED WE WOULD HAVE BEEN CONDONING THAT PROCESS”.

Mr. Ntow Amoah indicated that the GNPC had made it clear to Kosmos that the former (GNPC) would only put forward a FORMAL PROPOSAL to buy the Kosmos stake if and only if the flawed process was regularised.

“WE HAVE INDICATED TO KOSMOS THAT ONCE THAT PROCESS WAS REGULARISED THEN WE WILL BE IN A POSITION TO MAKE AN OFFER. AND WE HAVE INDICATED THAT WE WILL PURCHASE AT FAIR MARKET VALUE. IN FACT, WE HAVE INDICATED TO KOSMOS THAT WE WILL NOT PURCHASE THE ASSET BELOW THE $4BN THAT WAS BEING TALKED ABOUT IN THE PRESS,” emphasised Mr. Ntow Amoah.

In response to a question posed by Kwaku Sakyi-Addo, Host of Joy FM’s Newsfile programme as to whether Kosmos doesn’t have the right to sell to the highest bidder assuming some entity wants to offer it (Kosmos) something higher or bigger than what the GNPC could afford, Mr. Amoah retorted: “WELL, THAT IS WHY THE PROCESS HAD TO BE A MANAGED PROCESS AS DICTATED BY THE PETROLEUM AGREEMENT. THE PETROLEUM AGREEMENT HAS A PROCESS EMBEDDED WITHIN IT THAT ENABLES BONA FIDE ASSIGNEES TO BE DISCUSSED WITH GNPC SO THAT IT IS NOT JUST AN AUCTION PROCESS WHERE YOU ARE LOOKING FOR THE HIGHEST BIDDER. BUT IT IS A PROCESS THAT ENABLES GHANA TO ACHIEVE THE KIND OF STRATEGY THAT IT HAS FOR THE FIELD”.

He continued: “So it is not a typical, I mean… in the Petroleum Agreement, it is not a process that you just open up to the highest bidder. That is not the essence of the arrangements that are envisaged in the Petroleum Agreement. The Petroleum Agreement requires, because GNPC is the sole entity that can conduct petroleum operations and because the Law requires that any entity that wants to do petroleum operations must necessarily partner with GNPC, GNPC definitely must have a say in whichever partner it is left with. So essentially in terms of Kosmos’ interest, Kosmos, as the Government representative (Dr. Omane Boamah) indicated, Kosmos’ interest at this stage should be, ‘am I getting a fair price for my stake and will I get paid that fair price’. AND SO IN DISCUSSIONS WITH KOSMOS, IN TRYING TO RESOLVE THE (DATA) PROCESS ISSUES, WE INDICATED TO KOSMOS THAT BECAUSE THE PROCESS ITSELF WAS NOT THE RIGHT PROCESS WE WILL NOT AND SHOULD NOT BE SEEN TO BE PARTICIPATING IN THAT PROCESS. SO ESSENTIALLY OUR AIM WAS TO RESOLVE THE ISSUES IN TERMS OF THE SHOWING OF DATA WITHOUT THE APPROVAL OF GNPC IN TERMS OF THE FACT THAT WE WERE NOT NOTIFIED OF THE BONA FIDE ASSIGNEES. WE NEEDED TO RESOLVE THAT SO THAT WE WOULD BE ABLE TO THEN HAVE A PROCESS THAT WILL BE REGULAR FOR THE GNPC TO PARTICIPATE IN”.

On what the GNPC intended to do with the acquisition if it comes to pass, Mr. Amoah said the GNPC intends “TO RETAIN A SIGNIFICANT STAKE IN THAT ACQUISITION AND THEN WE INTEND TO USE THAT ACQUISITION TO ACHIEVE A CERTAIN STRATEGIC INTENT IN THE SENSE THAT WE WILL BE PARTNERING VARIOUS ENTITIES TO ENSURE THAT GNPC CAN DEVELOP ITS OWN DEEPWATER OPERATING CAPABILITY. SO, YOU KNOW, IT WILL BE A CONTROLLED PARTNERSHIP IN WHICH GNPC CAN ASSOCIATE WITH CERTAIN ENTITIES THAT BRING DIFFERENT STRENGTHS UNDER A VEHICLE THAT GNPC WILL PARTICIPATE IN. AND IN ESSENCE IT ENABLES GNPC TO BUILD ITS OWN OPERATING CAPABILITY IN DEEPWATER OPERATIONS”.

Mr. Amoah subsequently elaborated and re-emphasised almost the same views he had articulated last Saturday morning on Joy FM’s mid-day news on Monday, July 12, 2010.

Mr. Ntow Amoah’s defence of GNPC’s position is consistent with views expressed by Mr. Ato Ahwoi, GNPC Board Chairman and Nana Asafo Adjaye, GNPC Chief Executive Officer (CEO) in separate interviews the two gentlemen had granted to the Accra-based Radio Gold in late November, 2009.

An oil rig
Industry insiders expressed surprise that the GNPC position has remained the same devoid of a desire to resolve the data disclosure controversy. THE INSIDERS INTIMATED THAT THE GNPC WAS ONLY RAISING A ‘RED HERRING’ TO STALL PROGRESS ON THE DATA PALAVER IN ORDER TO CREATE ‘SPACE AND TIME’ TO ENABLE IT (GNPC) TO ‘FISH FOR CASH’ TO SUPPORT A FORMAL PROPOSAL TO BUY KOSMOS’ STAKE BUT THE LATTER (KOSMOS), CANNOT WAIT ENDLESSLY FOR GNPC’S ‘GAME-PLAN’ TO MATERIALISE HENCE KOSMOS’ DECISION TO ENTER INTO A SALES AND PURCHASE AGREEMENT (SPA) WITH EXXON-MOBIL WHICH HAS SINCE BEEN SUBMITTED TO THE GOVERNMENT OF GHANA (GOG) FOR ITS PRIOR CONSENT IN ACCORDANCE WITH THE PETROLEUM LAW OF GHANA AND THE PETROLEUM AGREEMENT RATIFIED BY GHANA’S PARLIAMENT IN JULY, 2004.

“ALL THE PLAYERS IN THE JUBILEE FIELD, OTHER STAKEHOLDERS WITH AN INTEREST IN GHANA’S OIL INDUSTRY, EXXON-MOBIL, THE INTERNATIONAL FINANCE CORPORATION (IFC) AND THE WORLD BANK, AFTER EXAMINING THE ISSUES INVOLVED IN THE DATA CONTROVERSY AND THE PROPOSED SOLUTION(S) PUT FORWARD BY GNPC, HAVE REJECTED GNPC’S APPROACH AND CASE. THERE’S STALEMATE BECAUSE OF THE STRANGE AND INFANTILE POSTURE OF GNPC AND ITS POWER-BROKERS,” confided the insiders.

Our Kosmos sources when contacted for their reaction, said THEY WERE AT LEAST HAPPY THAT THE GNPC HAS NOW OFFICIALLY CONFIRMED THAT NO FORMAL PROPOSAL OF ANY MONETARY/FINANCIAL VALUE HAD BEEN MADE TO KOSMOS TO ACQUIRE ITS STAKE IN THE JUBILEE OIL FIELD AS HAD BEEN PEDDLED BY SECTIONS OF THE PRO-GOVERNMENT MEDIA AND EVEN SOME GOVERNMENT OFFICIALS IN THE LAST 12 MONTHS.

“WE ARE HAPPY TO NOTE THAT THAT WIDESPREAD CLAIM OF AN OFFER OF $4.3BN BY GNPC/GOG HAS BEEN CERTIFIED AS COMPLETELY FALSE. IT VINDICATES OUR STAND THAT NO SUCH OFFER OR PROPOSAL HAD EVER BEEN MADE TO US. HOWEVER, WE ARE SURPRISED TO HEAR THE GNPC SAY THAT THEY (GNPC) HAD INDICATED TO US THAT THEY WILL NOT BUY AT A PRICE BELOW ‘A FAIR MARKET VALUE’ WHICH THEY (GNPC) PUT AT $4BN; A PRICE SPECULATED IN THE MEDIA. INCREDIBLE. HOW ANY SERIOUS ORGANIZATION/ENTITY WILL USE FIGURES/VALUES QUOTED IN THE MEDIA AS A BASIS FOR ANALYSIS OR NEGOTIATIONS BEATS OUR IMAGINATION. THIS IS UTTERLY INCREDIBLE; MIND-BOGGLING,” reflected our Kosmos sources.

Though the Kosmos sources declined to provide specific figures or values, THEY WERE CATEGORICAL THAT THE VALUE OF THE PROPOSED DEAL WITH EXXON-MOBIL IS OVER AND ABOVE THE QUOTED $4.3BN FIGURE BEING SPECULATED AS WHAT THE GOVERNMENT OF GHANA (GOG) HAD OFFERED TO PAY FOR KOSMOS’ JUBILEE FIELD STAKE.

Stay tuned for some exclusive revelations on the unfolding saga…

Vol.02 No.104 July 13, 2010 Tuesday (New Crusading Guide)

Source: Research Desk of New Crusading Guide/Peacefmonline.com/Ghana