GNPC seeks parliamentary approval for $1.65 billion loan to venture into oil exploration

The Ghana National Petroleum Corporation (GNPC) is requesting parliamentary approval for a loan of $1.65 billion to purchase two stakes in Ghana’s offshore fields.

This is contained in a memorandum submitted to Parliament by the Minister for Energy, Dr. Matthew Opoku Prempeh, for consideration and approval.

GNPC, through its GNPC Explorco, is allowed to participate in the upstream petroleum sector.

In the memoranda, the company said, it seeks approval to purchase a 70% stake in the South Deep Water Tano (SDWT) operated by AGM Petroleum Ghana Limited and a 37% stake in the Deep Water Tano/Cape Three Points (DWT/CTP) operated by Aker Energy Ghana Limited.

The company will form a joint operating company with the two entities and acquire the said stakes at different agreed prices.

“Provision of a loan not exceeding US$1.65 billion to finance the acquisition at a price to be negotiated which might not exceed US$1.3 billion and GC Explorco share of capital expenditure (CAPEX) to Pecan Phase 1 First Oil of US$350 million.”

GNPC argued that entering such a partnership with the two entities is critical because prevailing situations such as the exiting of oil majors from the country required that it builds its capacity and take up a large part of the exploration activities before Ghana’s oil reserves hits a level of terminal decline.

“With the shift away from investments in oil and gas into renewable, Ghana faces the risk of stranded assets and dwindling proven reserves if GNPC is unable to undertake exploration, development, and production alone. A declining industry undermines growth, diminishes revenue expectations for Ghana and makes redundant the stock of skilled labour in the industry which Ghana has rapidly built up over the decade.”

It said the move is “all the more needed and urgent” hence the need for parliamentary ratification.

Within four to five years, GNPC believes that the partnership will help the country produce an extra 200,000 barrels of crude oil.

Cabinet has already granted approval for the deal