Parliament okays GNPC deal. Parliament on Thursday approved a fiscal support agreement and security package term sheet among the government, the Ghana National Petroleum Company (GNPC), ENI and Vitolat at an estimated cost of $8 billion oil and gas project to start. There was an attempt by the Minority to block the deal, but the intervention of the Speaker, Mr Edward Korbly Doe Adjaho, foiled the attempt and the House finally endorsed the agreement. The GNPC is in the open market to seek an $8billion business partnership agreement with the government, ENI and VITOL to develop the Sankofa and Gye Nyame oil and gas project. The integrated oil and gas project is expected to generate estimated revenue of $11.115 billion to the state To that effect, fiscal support agreement and security package term sheet report from the joint Committees on Finance and Mines & Energy was, yesterday, put before Parliament for adoption and approval. The challenges with procuring light crude oil for power generation and the unreliable gas supply will be solved because the project promises to produce 50thousand barrels of oil and 180 million cubic feet of gas for the next 20years, The Minority was also peeved over the GNPC’s intention to raise a $700 million debt facility to, among other things, construct a gas pipeline. Also, under the contract the government was expected to assume that if investors borrowed money at 2 per cent, it should be deemed to be 7 per cent and added that the government was also expected to grant tax exemptions to the tune of $125 million. Dr. Osei said the government was expected to put up $100 million to protect investors but there were no clauses in the contract to protect the interest of the country and took a swipe at the GNPC for raising monies without Parliament’s approval and for misapplying funds. These obligations will be backstopped, among other things, by a World Bank Partial Risk Guarantee cover of US$600million plus US$100million, which encumbers International Development Authority allocation to Ghana in the amount of US$150million, to cover the risk of payment default by GNPC and a sovereign guarantee up to US$100million that will cover any further payment shortfall that may occur. The Offshore Cape Three Points Petroleum Agreement Security Package Term Sheet also allows the Supplier to seek Multilateral Investment Guarantee Agency insurance in addition to the guarantees provided by the Government of Ghana and backed by the World Bank. Mr Seth Terpker, the Minister of Finance, who was in the House before the agreement was ratified, allayed the fears of the minority MPs that the GNPC and World Bank which is offering the $700 million will provide the needed guarantee for the loan The House, in a related another development, approved an amount of GH¢6,173,672 for the National Development Planning Commission, GH¢125,527,610 for the Audit Service,GH¢12,656,582 for the Public Services Commission, and GH¢222,850 for the office of the District Assemblies’ Common Fund Administrator as budget estimates for the year ending December 2015.
Posted on: Mon, 15 Dec 2014 08:36:37 +0000
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