The Ministry of Energy has a US$1.7 billion bill for a Floating Oil Production Storage Offloading (FPSO) vessel which the Norwegian company Aker Energy Ghana Limited, purchased for US$35 million as part of a Plan of Development (PoD) to the government of Ghana.

“Even though Aker has sold their interest in Ghana, they are scheming to stay on the Pecan development through surrogates and Ghanaian collaborators across segments of our society to amass ridiculous benefits from the Pecan field development.

“Aker Energy purchased an FPSO for $35 million. In their Plan of Development submitted to the Government, Aker’s previous owners intend to bill Ghana $1.7 billion for the FPSO. We admit that the energy ministry has raised a preliminary objection to the cost of the FPSO. But there is no proposal on how much the Ministry considers fair value for the FPSO.

The revelation was made at last week’s press conference by some 29 Civil Society Organizations (CSOs) during which they revealed how Aker’s oilfield in Ghana, is shockingly been sold as scrap at a symbolic price of US$1 to AFC Equity Investment, a subsidiary of Africa Finance Corporation (AFC) although two years ago, 37percent of that field was price at US$1.6 billion.

According to the CSOs, their campaign is a reminder of the importance of holding governments accountable and ensuring that the interests of the people are protected. It is also a reminder that value for money should always be a key consideration when making decisions about public resources.

They had argued that “newly constructed FPSOs, which are normally converted oil tankers with a few years of operational history, typically cost between $700-1.2 billion to build over a 2–3-year timespan, so why are the developers opting to charge Ghana a hefty sum of $1.7bn for more or less ‘scrap metal’ when the book value of the FPSO is significantly less than that? For example, the FPSO project for Guyana’s Yellowtail project costs US$1.75 billion, according to SBM Offshore (the EPC company).

“The FPSO will be designed to produce approximately 250,000 barrels of oil per day, will have an associated gas treatment capacity of 450 million cubic feet per day and water injection capacity of 300,000 barrels per day. The FPSO will be spread-moored in a water depth of about 1,800 meters and will be able to store around 2 million barrels of crude oil. Ghana’s Aker FPSO is nowhere near these technical specifications.

“Originally, a tanker called S.T. Polar Alaska, manufactured 36 years ago, was converted into an FPSO 14 years ago. Typically, FPSOs have an average payback period of 5-7 years, varying based on size and configuration. The lease period for rented options is commonly ten years. Technocrats have expressed concerns about the FPSO’s age and have recommended caution, but there is political pressure to proceed with the deal. We are monitoring this keenly and demand transparency on the judgment of the Ministry before the approval is granted.

On the sale of the Aker Energy oilfield, which was offered that Ghana National Petroleum Corporation (GNPC) under Dr. Kofi Kodua Sarpong, for US$1.6 billion two years ago, the US$1 dollar became possible because Aker Norway, had defaulted on a loan of US$200 million they were given by AFC to invest in Pecan, hence had to hand over the asset in a face-saving “sale” at the ridiculous amount. Pertinent

The Herald’s investigations have established that the oilfield was later appraised by Bank of America to be US$300 million and not US$1.6 billion as submitted to Parliament by the Energy Minister, Dr. Matthew Opoku Prempeh, and Dr K.K Sarpong then CEO of GNPC in between July and August 2021. The appraisal was done on the directives of Finance Minister, Ken Ofori-Atta, and report submitted to President Akufo-Addo.

Details about the ridiculous transaction, came to light at last Tuesday’s press conference by some 29 CSOs during which the President, Nana Akufo-Addo, was asked to sack the GNPC Board Chairman, Freddie Blay, for attempting to sell a 50 percent stake in the offshore Jubilee Holdings Limited (JOHL) to PetroSA.

Interestingly, it has been discovered that, despite Aker’s sale of its interest to AFC, it is using the backdoor scheming to still hang around the Pecan oilfield through surrogates and Ghanaian collaborators across segments in society to amass ridiculous benefits from the Pecan field development.

Civil Society Organisations (CSOs) in Ghana, committed to accountability in the energy sector, formed a coalition to block the transaction.

The Government and the GNPC, adamantly insisted that this was a good deal for the country. Various analysts, consultants, and professors at home and abroad were lined up to circumvent the glaring evidence that, based on available data, the two oil blocks had been ridiculously overpriced.

Parliament was swayed to grant authorisation to GNPC to spend a maximum of $1.1 billion, money to be borrowed in the name of Ghana, on the blocks. CSOs were, to put it mildly, outraged.

Fast-forward two years later, SWDT has been returned to Ghana for free. The so-called massive find (“Nyankom”) that the GNPC swore it was getting for a bargain is no longer the tantalising prospect it was sold to Parliament.

The main block, DWT/CTP, the more viable field, Pecan, is now effectively controlled by AFC Equity Investment, a subsidiary of Africa Finance Corporation (AFC), Aker’s main creditor.

Aker Norway, has more or less defaulted on the loan of $200 million they were given to invest in Pecan and handed over the asset in a face-saving “sale” for $1.

Aker will only recoup some of its earlier investment, if AFC, succeeds in developing the field to the point where it can produce and sell oil to recoup its investment and make some money.

So, in short, the same blocks that barely two years ago, were worth more than half the IMF money this country has sweated blood for nearly a year to secure, have either been abandoned or pawned for scraps.

The question likely to be on the minds of the public is: what happened to the $1.1 billion that GNPC was authorised by Parliament to borrow to buy stakes in Nyankom and Pecan? The answer is simple: the energy minister, GNPC and the bevy of bureaucrats at the various state agencies feel that they don’t have to answer to anyone. And nobody can make them talk.

So after nearly throwing away $1.6 billion for stuff that Ghana could simply have waited and gotten back for free, the people responsible for such reckless decision-making are still taking strategic decisions for the country and refusing to account for any aspect of their stewardship. Sadly, the controversies around Aker are far from over.

But there is no proposal on how much the Ministry considers fair value for the FPSO. Newly constructed FPSOs, which are normally converted oil tankers with a few years of operational history, typically cost between $700-1.2 billion to build over a 2–3-year time span.

The CSOs questioned “why are the developers opting to charge Ghana a hefty sum of $1.7bn for more or less ‘scrap metal’ when the book value of the FPSO is significantly less than that?

They argued that “the FPSO project for Guyana’s Yellowtail project costs US$1.75 billion, according to SBM Offshore (the EPC Company). The FPSO will be designed to produce approximately 250,000 barrels of oil per day, will have associated gas treatment capacity of 450 million cubic feet per day and water injection capacity of 300,000 barrels per day”.

“The FPSO will be spread moored in water depth of about 1,800 meters and will be able to store around 2 million barrels of crude oil. Ghana’s Aker FPSO is nowhere near these technical specifications 2. Originally, a tanker called S.T. Polar Alaska, manufactured 36 years ago, was converted into an FPSO 14 years ago. Typically, FPSOs have an average payback period of 5-7 years, varying based on size and configuration.

“The lease period for rented options is commonly ten years. Technocrats have expressed concerns about the FPSO’s age and have recommended caution, but there is political pressure to proceed with the deal. We are monitoring this keenly and demand transparency on the judgment of the Ministry before the approval is granted”.

The CSOs explained that their “campaign is a reminder of the importance of holding governments accountable and ensuring that the interests of the people are protected. It is also a reminder that value for money should always be a key consideration when making decisions about public resources.”

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