Government has justified the renegotiation of the AGM Ghana Ltd petroleum agreement that led to the reduction of GNPC’s participating interest in the block from 15 percent to 3 percent.
In the same renegotiation, the Ghana National Petroleum Commission’s interest dropped from 24 percent to zero.
At a press briefing, the government said this was to incentivise the new company, Aker Energy, that had taken over AGM to carry out its minimum obligations.
“The AGM petroleum agreement was signed under the NDC government. However, the company could not meet its minimum obligations. Following the acquisition of the company, the new owner resented a request to government for renegotiation to provide some incentives to support the prospects presented by the bloc,” Deputy Minister of Energy, Mohammed Amin Adams, explained at a press briefing on Friday, February 14, 2020.
He added that the incentives were not novel and that the “renegotiation is allowed under the law and also under the petroleum agreement itself.”
Aker Energy eventually drilled three wells instead of the two outlined in the agreement and eventually struck oil after exploration in the deepwater Cape Three Points block.
“What this simply means is that the objectives of these incentives have been achieved and Ghana is better off,” the Deputy Minister said.
“Given its many commitments and the need to prevent it from being overexposed, GNPC decided to divest part of its bidding interest.”
Meanwhile, the government also denied claims by the National Democratic Congress (NDC) that Quad Energy, the company consortium partnering AGM Ghana Ltd in its oil and gas exploration, was created under questionable circumstances.
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