Dr Yusif Sulemana, an energy consultant and senior oil production specialist at petroleum development Oman has supported calls by the Public Interest Accountability Committee (PIAC) to enlist the Ghana National Petroleum Corporation (GNPC) on the Ghana Stock Exchange (GSE).

While the National Oil Company (NOC) can be credited as among the top six SOEs in the country, it is not immune to shortfalls common to SOEs— ‘unbridled government interference’.

This has been cited by the Independent watchdog— the Public Interest Accountability Committee (PIAC) — as muting the progress of GNPC, while instigating the often publicized concern of gross mismanagement of petroleum revenues in its reports and press briefings.

The PIAC has noted a reversal will only be possible when the control of GNPC is ceded to Ghanaians by listing the NOC on the Ghana Stock Exchange; a call which has yet to be effected since it was first expressed at the beginning of the year.

There are instances cited by the PIAC, highlighting the use of the corporation to finance quasi-fiscal expenditures of the government; instances of non-documentation of borrowed funds from the Corporation; and the non-repayment of borrowed funds by the government.

These issues tend to delay the execution of the core mandate of GNPC- operating within the upstream Oil and gas sector as an operator.

“…Ultimately, we have to [list GNPC on the GSE], the status quo hasn’t helped. If we have structural weaknesses and we don’t take steps to strengthen them or solve them… we will be sinking money and not get value for our money.

“Our upstream is very key to our energy security. What we need to do is to make sure that we strengthen the structures; that people are accountable for their actions and inactions…”
Dr Sulemana

Consider some KPIs to inform enlistment

However, Dr Sulemana noted that “some KPIs should be met” following its enlisting on the GSE, while considering the strength of the financial sector, he said; Whether or not the financial sector or local investors will be able to support such a huge cost-financing institution like GNPC. And especially, as GNPC nears a time (after the next five years) by which oil revenues will cease to be allocated to the corporation (PRMA 2011, ACT815).

“We need to test our readiness: Even if our financial system is not robust enough to accommodate such a move, we have to make concerted effort to make it robust… GOIL is a working example. Before it was listed on the Ghana Stock Exchange, it was near collapse. Now, GOIL is one of the highest shareholders in the downstream and they command a lot, and the results are there for us to see.

“Initially, TotalEnergies and Shell used to be the market leaders in terms of branding, quality and competitiveness. Now, I can almost say that GOIL has overtaken that and it is almost like a benchmark that this multinationals have to look at.”
Dr Sulemana

“I think it is doable”. What we can do is to “test our readiness, and the resilience of our financial system. And to go ahead with this, there is the need to start with enlisting Explorco. Because it is the vehicle that is entirely in charge of exploration and Production (E&P) activities within GNPC.”

Start by listing Explorco on GSE to avoid losing focus on core mandate

He noted that this is important as many auxiliaries undertaken by GNPC including Corporate Social Responsibilities (CSRs), have the tendency of swaying its focus, given the main mandate of the Corporation.

“[The PRMA Act 2011, Act 815 requires that] after 15 years… GNPC should be able to generate profit, or achieve some maximum cash flow that they may not need capital input [from oil revenues]. In fact, if anything, they have to pay dividends to external parties and not to keep on taking money [from the oil revenues].

“Unfortunately, as we speak now, GNPC keeps on taking money. The expectation was that GNPC should have been able to start paying dividends, and that is possible. And one of the ways that we can fast-track this is to look at enlisting them. Especially, when we take the vehicle like Explorco, make it vibrant and enlist it.”
Dr Sulemana

Access to capital to finance oil investments are diminishing rather rapidly, and gleaning commitments made at the COP26, this will continue for the foreseeable future.

Also, Rating Agencies are reporting that the government may find it very difficult to access the international capital market due to negative investor sentiments about the country’s unsustainable debt concerns.

Considering the foregoing, the suggestion that GNPC Explorco should be listed on GSE is in the right direction and the opportunity it offers is that the NOC can aggressively build on its core mandate and remain a profitable venture, Dr Sulemana said.