Imani Africa and the Africa Centre for Energy Policy (ACEP) have welcomed the announcement by AGM Petroleum Ltd (AGM) to relinquish its interest in the South Deepwater Tano (SDWT) block, which hosts one discovery – the Nyankom-1X, from a drilling campaign embarked on by AGM in 2019.

The advocacy groups want more to be done regarding this matter and the whole issue of Aker Energy’s oil holdings in Ghana, to ensure the rule of law and fair treatment for Ghana as the sovereign.

The groups have requested President Akufo-Addo to establish a culture of accountability in the petroleum industry while ensuring that the country can count on leadership to avert paying hundreds of millions of dollars on avoidable transactions.

The call to action by Imani Africa and ACEP comes after AGM and Aker Energy proposed to sell 70% of the SDWT Block, and 37% of the Deep-Water Tano Cape Three Points (DWT/CTP) block to Ghana National Petroleum Corporation (GNPC) in a joint transaction worth approximately $1.3 billion in 2021. The two groups were among a coalition of Civil Society Organizations (CSOs) that opposed the transaction, citing the economic benefits assigned to Aker and the costs to Ghana.

Mr. Benjamin Boakye – the Executive Director at the Africa Centre for Energy Policy (ACEP)

Despite these concerns, GNPC moved ahead with the transaction. However, Imani Africa and ACEP’s recent call for an inquiry follows AGM’s decision to relinquish its interest in the SDWT block, which raised fundamental questions about the assessments conducted by GNPC and the Ministry of Energy to commit to paying for such an asset.

Non-conduct Of Appraisal Post-Discovery By AGM Petroleum Is Questionable

In their statement, Imani Africa and ACEP highlighted the fact that AGM did not conduct an appraisal post-discovery, indicating that GNPC, as a partner to AGM, should have known the status of the discovery by interpreting the same data set available to AGM.

Furthermore, the advocacy groups questioned the technical capacity of GNPC and the Ministry of Energy to protect the nation against speculative investments, calling for a re-evaluation of some of the technical advice that has landed Ghana in court.

The relinquishment of AGM’s interest in the SDWT block also raises questions about the commerciality of the Nyankom discovery, which AGM had previously valued at over $700 million.

Imani Africa and ACEP pointed out that the company became “dodgy” about efforts to appraise the discovery, and that AGM’s recent statement corroborates their predictions that the SDWT block is situated in an ultra-deep waters with substantial investments required to proceed.

The advocacy groups argued that the essence of declaring commerciality in petroleum operations is for the contractor to be satisfied that the petroleum discovery is significant enough to generate a positive return on investment with the available technology, or justify the development of a new technological solution to develop and produce the discovery, adding that: “The fact that AGM did not conduct an appraisal post-discovery suggests that the Nyankom discovery may not be commercially viable.”

That notwithstanding, both groups further urged President Akufo-Addo to recommend clear actions required to develop the Pecan field after Aker has failed to submit an acceptable Plan of Development in five years as an operator of the Deep-Water Tano Cape Three Points (DWT/CTP) block.

“Aker has received ten extensions, and it appears imminent that the company will request the eleventh extension with clear indications that Aker has not fulfilled its obligations to Ghana under the terms of its contract.”
Portion of a statement released by Imani Africa and the Africa Centre for Energy Policy (ACEP)

Imani Africa and the Africa Centre for Energy Policy has encouraged all well-meaning Ghanaians to join the call for the President to institute this enquiry.