$164m loan to GNPC for JOHL acquisition without parliamentary approval unlawful – Report
The 2020 Ghana Extractives Industries Transparency Initiative (GHEITI) on the Oil and Gas Sector has described as unlawful the grant of $164 million loan to the Ghana National Petroleum Corporation (GNPC).
The GHEITI Report pointed out that the money was given to GNPC through the Jubilee Oil Holdings Limited (JOHL) acquisition without Parliamentary approval.
Accordingly, this is in contravention of Article 181(1)(2)(3) of the 1992 Constitution, and Section 57(1)(f) of the Public Financial Management Act, 2016 (Act 921).
“There is no loan agreement specifying the tenure and terms of repayment of the loan. The transaction was based on written communication between the Ministry of Finance and GNPC”, the report stated.
Additionally, the report said checks at the Registrar of Companies revealed that JOHL was registered in Ghana as an external (foreign) company on August 15, 2022, with a presence in the country.
This implies that at the time of lifting, JOHL had not been registered to conduct business in Ghana. Furthermore, to hold interest in a petroleum block, the report stated that the Petroleum (E&P) Act, 2016 (Act 919) requires the incorporation of a local company.
Therefore, the acquisition of a stake and subsequent lifting of crude oil by JOHL ahead of its incorporation in Ghana is in contravention of Section 70 (1)(a) of Act 919, which mandates such incorporation to carry out petroleum activities in Ghana.
Continuing, the report said, months after GNPC’s assurance of JOHL transfer to Explorco, the GNPC has still not honoured its pledge, adding, “If the current arrangement remains, JOHL will continue to lift and sell crude oil as well as bear the cost of funding its commercial interest in the two fields as a subsidiary of GNPC”.
In terms of recommendations, the GHEITI report said its position is consistent with that of the Auditor-General in respect of procurement breaches reported in 2020.
“GNPC should provide clear timelines for the transfer of the JOHL interests to Explorc”, it concluded.