Energy expert has expressed worry over the number of institutions (public and independent) that the Ghana National Petroleum Corporation (GNPC) reports to in line of their duty and operations.
Currently, the national oil company reports to 15 institutions (governmental, independent, private institutions and civil society groups). This, the expert said, they are too many and needs to be streamlined to keep the Corporation more on its commercial mandate.
GNPC, since its establishment has contributed tremendously to the growing oil and gas sector and the general economy. GNPC has been playing an enabling role in the energy sector as well as the wider economy. Like any state enterprise, it has a dual mandate: to pursue commercial as well as developmental objectives.
“Currently GNPC reports to too many institutions in Ghana which need to be streamlined to keep the Corporation more on its commercial mandate”, Mr Alex Mould noted when speaking at the Oil and Gas Conference at the University of East London in the United Kingdom on Tuesday.
The diagram below summarises the numerous reporting lines
Speaking on the topic “State of Ghana’s oil and gas sector and how the national oil companies can ensure resource blessing”, the renowned financial and energy expert in his submission made some relevant proposals on how GNPC can better serve the interest of the state.
He recounted that, “During my time as CEO of GNPC, we provided the financial guarantees that enabled the deployment of the Karpowership barge from Turkey to provide electricity. The rationale for GNPC’s support in this transaction was two-fold: the power barge was necessary to mitigate an urgent power generation deficit in the country. But more importantly, the barge was meant to convert from using Heavy Fuel Oil (HFO) to natural gas. This was meant to avert incurring take or pay liabilities on the Sankofa gas.
“In this transaction also, we did something quite smart: we took up the role to supply the HFO to the barge, at a margin. We also negotiated to use mainly existing placements with banks as the guarantee. GNPC was therefore earning interest income on the guarantee.”
He further noted that GNPC similarly intervened in other areas, including pre-financing the construction of access roads to enable the evacuation of Liquefied Petroleum Gas (LPG). Not doing this would have created a bottleneck in gas processing and gas offtake.
Also speaking on the role GNPC in Technology Transfer and Technology Development in the oil and gas upstream and downstream management, he stated that, GNPC can play a significant role in attracting and adapting the right technology to further indigenize the development of the oil and gas sector in Ghana.
“The sector is technology-driven. Through its partnerships, GNPC must be conscious to partner with companies that are willing to share their technology, including proprietary ones. Then GNPC must invest in its people and processes in order to be able to adapt those technologies to suit the Ghanaian environment.
“In addition to that, GNPC must invest in research and technology to solve the peculiar problems of the oil and gas sector, within the Ghanaian context. A good example is Petrobras of Brazil, which invested heavily in understanding its oil-rich offshore reserves trapped below a 2,000m-thick layer of salt, which itself is located below 2,000m-thick post-salt sediments. Now, Petrobras has become a world leader in pre-salt and deepwater exploration and development.”
