State oil company, Ghana National Petroleum Corporation (GNPC) has been directed by Parliament’s Committee on Mines and Energy to expedite the transfer of Jubilee Oil Holdings Limited (JOHL) to its subsidiary company, Explorco.
According to the report of the Committee on Mines and Energy on the 2023 Work Programme of GNPC, the committee “instructed GNPC to take immediate steps to transfer its shares in the offshore company, JOHL to its subsidiary company, GNPC Explorco.”
Jubilee Oil Holdings Limited, a subsidiary of GNPC, was acquired through a $164m share purchase agreement between Ghana and Anadarko WCTP Company in 2021 when the latter announced plans to offload its interests.
Jubilee Oil Holding Limited made its first oil lifting of 944,164 barrels of oil in the Jubilee Field in the first half of 2022.
The amount was realised from the lifting of 944,164 barrels of oil from the Jubilee fields and Anadarko CWTP Company in the first half of 2022.
In 2022 alone, the interest of JOHL raked in some US$ 290 million, according to the 2022 PIAC annual report. Total payments for cash calls (including fields in which Explorco holds an interest) amounted to US$83million – leaving a gross margin of US$207million for GNPC/JOHL from the Jubilee and TEN fields operated by Tullow Ghana.
Acquisition
According to GNPC, it wrote to the Ministry of Finance to advance it a loan towards the purchase and obtained approval from the Ministers of Energy and Finance. JOHL has so far lifted US$153m of oil.
Jubilee Oil Holding Limited is a 100 per cent subsidiary of the GNPC and GNPC reckons is a company registered under the Companies Act and obviously, the terms and conditions, as well as the constitution of Jubilee Oil Holding Limited, are governed by that act, not the Petroleum Revenue Management Act, officials of GNPC told the Public Accounts Committee when it appeared before it last year.
“For that reason, 100 per cent of that revenue cannot be paid into the Petroleum Holding Fund. Jubilee Oil Holding Limited must operate, and if at the end of the day it declares profit and the directors decide dividends must be paid, that money is paid to the GNPC, which will pay it into the Petroleum Holding Fund,” Mr Joseph Dadzie, Deputy Chief Executive (CEO) of GNPC in charge of Commerce, Strategy and Business Development had said.
PetroSA, a minority player in the upstream joint venture, exercised its pre-emptive rights in the hope of expanding its assets and portfolio in Ghana and across the continent before the deal fell through.
The Ministry of Energy had said revenue from JOHL’s lifting was being used to finance decommissioning of the Saltpond field and payment of commercial interests owed to Explorco, another GNPC subsidiary.
Earlier in May, Civil Society Organisations (CSOs) Coalition on Extractive Governance raised concerns over attempts by the Ghana National Petroleum Corporation (GNPC) to sell a 50 per cent stake of Jubilee Oil Holding Limited (JOHL) to PetroSA, a South African firm.
The coalition said GNPC has initiated steps to sell 50 per cent of JOHL’s assets held in the Cayman Islands to PetroSA, in what the CSOs described as bizarre circumstances two years after Anadarko sold the asset to GNPC. Details of the deal came to light in a letter from the Minister of Energy, Dr. Matthew Opoku-Prempeh, in which he urged the president not to approve the transaction.
“Given that US$290million has already accrued to JOHL, the purchase of 50 per cent implies that PetroSA would receive a percentage of the accrued benefits net of the purchase price and other costs – and meaning that PetroSA may not have to pay anything for interest. We are actively monitoring the sharp political tussle for and against the sale of the asset. This situation was always possible when the government decided to domicile Ghana’s asset in a tax haven and refused persistent calls to bring back the asset to Ghana,” the coalition said.
