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“REVIEW ENI/GNPC SANKOFA
CONTRACT” – MINORITY LEADER TO ITALIAN PM
The Minority Leader in Parliament, Hon. Osei
Kyei-Mensa-Bonsu, MP for Suame, on Tuesday, February 2,
2016, urged visiting Italian Prime Minister, His Excellency
Mr. Matteo Renzi, to prevail on ENI, a state-owned Italian
oil conglomerate, its partners and the Government of Ghana,
to review some aspects of the contract involving the
exploitation of the Offshore Cape Three Points Block (OCTP).
According to Hon. Osei Kyei-Mensa-Bonsu, a careful
interrogation by the Minority of documents on the $7 billion
deal has led to the discovery of some “sore points and
knotty issues”, which will, in the long run, shortchange
Ghana.
The Minority Leader made this known to the Italian Prime
Minister in the holding room of the Speaker of Parliament
after H.E. Matteo Renzi had delivered a speech to the House.
In the presence of Ghana’s Minister for Foreign Affairs,
Hon. Hannah Tetteh, and high-ranking government officials
from the two countries and a section of the media, Hon. Osei
Kyei-Mensa-Bonsu expressed grave worry about the contractual
arrangements in the ENI deal, and requested that the parties
involved take a second look at the agreement.
Whilst thanking the Italian Prime Minister for his visit and
address to the House, Hon. Osei Kyei-Mensa-Bonsu noted that
Ghana is appreciative of the years of collaboration and
partnership that have existed between the two countries in
various fields.
The ENI-Sankofa gas project, the Minority Leader added, is
the single largest investment in Ghana. This agreement, like
all others, he, however, noted must inure to the benefit of
the two countries and must in no way be lopsided, which is
the case in the present deal.
The Prime Minister indicated that he would look into the
matter.
Concerns by NPP
The Director of Communications of the New Patriotic Party,
Nana Akomea, in an earlier statement, explained that his
party’s worries about the ENI deal stem from the fact that
the government of Ghana has provided financial terms to ENI
and its partners of 20% return on investment, instead of the
normal 12.5%. This, in the view of the NPP, is an unusually
high rate for commercial transactions of this nature,
especially as GNPC assumes all the risk in the project.
Additionally, the negotiated gas price of $9.8/MMBtu for gas
from the Sankofa fields, according to the party, is too high
by world standards, which stand at between $5-7/MMBtu.
“It is even higher than the price of gas sold to Ghana from
Nigeria, which stands at $8.3/MMBtu, delivered at Takoradi.
It is even more expensive than our own Atuabo Gas price of
$8.8/MMBtu delivered at Takoradi. At the negotiated gas
price of $9.8/MMBtu, it puts to great risk Ghana’s potential
of becoming the Petrochemical hub of the region to Nigeria,
due to that country’s lower gas prices,” the statement
added.
The agreement, according to Nana Akomea, also compels the
Ghana National Petroleum Company to buy up to 90% of ENI
produced gas at a higher negotiated price of $9.8/MMBtu for
20 solid years. Furthermore, GNPC, after buying the gas from
ENI at a guaranteed price stands the risk of losing its
market (VRA, IPPs, petrochemical industries) to other cheap
gas suppliers.
Whereas the cost of development of ENI’s Sankofa fields,
with less reserves of oil equivalence, stands at $7 billion,
the cost of the development of the Jubilee Fields, which has
even more reserves of oil, came to $4 billion. The cost of
development of the TEN oil fields, also with more oil
reserves of oil equivalence, Nana Akomea noted, came to $4.9
billion.
“We wonder the quality of due diligence done, if any,” he
queried.
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