The energy think tank argues that failure to contain the situation could lead to a power crisis which will discomfort consumers.

Operators of the Jubilee fields have announced a shutdown in May for some repair works on the turret bearing.

Speaking to Citi Business News on the matter, the Head of Programs at ACEP, Alhassan Iddrisu called on government to effectively carry out all outlined plans to ensure that Ghanaians enjoy uninterrupted power during the shutdown of the FPSO.

“I think that our production capacity makes us a bit comfortable. We generate more than we currently need, so we don’t expect any power shortage during the shutdown, seeing that the Ministry of Energy has put in place measures to forestall any occurrence of shortage in power supply. But we cannot relapse in our efforts. We call on government to marshal resources to ensure that the shutdown of the FPSO Kwame Nkrumah is handled effectively.”

Alhassan Iddrisu has meanwhile called on Government to increase the level of investment of Ghana’s oil revenue into key areas like health, agriculture and education.

According to him, this will help bridge the widening inequality gap in the country.

The latest Ghana Poverty and Inequality Report indicates that despite the gains made in reducing poverty, inequality continues to increase.

In an interview with Citi Business News, Alhassan Iddrisu stated that it was the responsibility of the government to lead efforts at lifting Ghanaians out of poverty.

“We have been advocating for investment of oil revenue in pro-poor sectors, like education, health and agriculture. Because we think that these types of investments have a wider effect on the poor, the vulnerable and the marginalized. Once we continue to invest in these sectors we’re sure we’re bringing everyone along, the privileged and those who are less privileged.  .”

Alhassan Iddrisu was speaking on the sidelines of a stakeholder engagement forum, on the theme “Addressing inequality in Ghana through equitable fiscal policies of government and harmonized national identification system.

The program saw presentations on topics like “Using a harmonized national identification system to address inequality” and “Addressing inequality through government fiscal policies.”

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By: Bobbie Osei/citibusinessnews.com/Ghana

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The government extended the Karpower deal for the supply of electrical power in a move that seems different from what was expected from the current administration after it criticized the deal in opposition.

In an interview with Citi News, Acting Executive Director of ACEP, Benjamin Boakye said even though the renegotiation is a good step, the government must reveal the full facts of the terms.

“The Karpower agreement was too expensive for Ghana and we have always called on the government to renegotiate the contract. We are happy about re-negotiating the agreement but what we are not sure of is what the specific terms of the renegotiated agreement are. If you are extending this period, we need to get the facts so we can do a proper analysis of the decision taken.”

We’ll save $60 m yearly from renegotiated

Though the exact savings from the renegotiation of the Karpower deal from 10 to 20 years are yet to emerge, the Deputy Minister for Energy, William Owuraku Aidoo has said Ghana will be saving at least $60 million per year.

These savings will come from the utilization of gas from the Sankofa fields.

Mr Aidoo justified the government’s extension of the deal it once criticized and said the previous deal was not cost-effective because of the 10-year duration.

It is unclear what the new terms are, but the company recently announced it will move from using Heavy Fuel Oil [HFO] to natural gas when it moves the vessel from Tema to Takoradi.

The Karpowership from Turkey has the capacity to supply 470 megawatts (MW) of power to Ghana.

“The basic structure of the deal then was totally wrong. It was nothing to write home about… We’ve renegotiated the Karpower deal and stretched it over 20 years to ensure value for money,” Mr Aidoo said on Eyewitness News.

“If you sign a power purchase agreement over a short period of time; that was 10 years, what it meant was that the good people of Ghana would virtually have to pay through the nose over a 10-year period which necessarily means they would have to pay higher tariffs. To stretch over a longer period will [see tariffs] come down to somewhere in the region of 10 cents per [kilowatt hour].”

Retort from Minority

The Member of Parliament for Damongo Constituency, Adam Mutawakilu, however, said the renegotiation was nothing exciting.

He also said the reduced tariffs as a result of the extension was no surprise.

“We know Karpower is a ship. The moment you extend the period, the tariff will come down so it is not magic that they have done. But what they have done is that, by going that way, they will not be able to build an asset for the country. That means after 20 years, the ship goes back.”

‘Karpower barge deal makes no sense’ – Bawumia

In December 2015, Dr Mahamudu Bawumia, then running mate to Nana Addo Dankwa Akufo-Addo, said it “made no sense” for government to secure the power barge as an emergency solution to the power crisis, explaining that the deal did not give the country value for money.

The 225 megawatts power barge docked at the Tema Port in December 2015, to augment the shortfall in power supply at the time.

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By: Marian Ansah/citifmonline.com/Ghana

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The IES believes this will also defeat the immediate claims by the government of reducing the cost of power produced from the power barge.

The comments come on the back of government’s extension of the agreement with Karpower by ten more years.

The government is convinced that the extension is a good deal agreed on citing varied reasons.

However, the opposition NDC insists the extension is a mere indication of been vindicated.

The various players have been sharing their perspectives with Citi Business News on the extension which is expected to bring the cost of power per kilowatt hour down from 16 to 10 cents.

Click to listen to full audio report.

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

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The development also puts consumers at risk as there are fears the products may have been in circulation at the various retail outlets.

The revelation comes seven months after the National Petroleum Authority (NPA) directed that all diesel in circulation must contain a maximum sulphur content of 50 parts per million.

The Managing Director of TOR, Isaac Osei disclosed this to Citi Business News.

He however indicated that there are measures in place to reach the goal soon.

“If the facility should receive about 300 million dollars, we should be able to install a de-sulpherer to get the 50 parts per million as planned. In any case we do not have to do so now but we are planning towards it; this year, we will be doing a configuration study and it will inform us on the type of equipment we could put in place in order to comply with the law but then we would be the only country to have done that,” he stated.

NPA’s directive takes effect on July 1, 2017

The National Petroleum Authority (NPA) first directed that all diesel in circulation should contain at least 500 million parts per million in November 2016.

This is to precede a final directive which took effect on July 1, 2017 where all imported diesel were expected to contain at least 50 parts per million.

Even though importers of such products have since been complying with the directive, the nation’s refinery is yet to do so.

But industry watchers believe this is long overdue considering the health implication of the unwholesome products.

A Senior Policy Analyst at the African Center for Energy Policy (ACEP), Jo-Ann Sackey tells Citi Business News the national oil refinery should expedite its work.

“It has been over a year since the new directive was announced so we would like to know what steps they (TOR) have taken so far to make sure this should not happen; 2020 is just two years away so are they saying that we should ensure using dirty fuel between now and then?”

Despite this, Mr. Isaac Osei is confident of reversing the trend as in his view, Ghana has advanced in processes to meet a sub-regional timeline of 2020, compared to her counterparts within the sub-region.

“The Nigerians say they will do theirs in 2022, Ghana is way ahead of everyone else because it is the only country which has decided that all imports should be at 50 million parts per million that does not affect refineries. People have also been talking about quality; but I think it is not about quality but rather about standards, when standards are yet, then you would have to comply.”

Consumers at greater risk if …

For, industry watchers like ACEP, TOR’s continuous distribution of refined products to Bulk Oil Distributing companies means that consumers still stand a risk of health implications associated with the high sulphur content in diesel.

“If TOR sells to other bulk distributors, then definitely the fuel is going into the pumps and then consumers will be using it subsequently but if TOR itself decides that it will only sell to specific consumers that can use the fuel without any effects, then that wouldn’t be a great concern to vehicle users,” she stated.

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post Low funding keeps sulphur in diesel products from TOR high appeared first on Citi 97.3 FM - Relevant Radio. Always.

Mr. Boakye said this would provide clarity on the government’s assertion that it saved some GHc5.7 billion from cancelling some contracts, at least within the road sector.

The government has also suggested it has saved huge sums of money by reviewing and terminating some energy agreements.

[contextly_sidebar id=”1j33gxzwKoCfa0yubotBxQl1IkU3g8rw”]Speaking on Eyewitness News, Mr. Boakye said “it makes sense to publish the details so we can interrogate the numbers to be sure that that is what is actually happening. We keep hearing that some deals have been made but no data is available to support it and that I don’t think is right.”

The Minority Spokesperson on Roads and Transport, Kwame Agbodza, had said he doubted the government’s claim, which was made by President Nana Akufo-Addo during his interaction with Ghanaian media members on Wednesday.

Beyond this, as far as the savings are concerned, Mr. Boakye said some of the contracts terminated may have been because contractors failed to meet certain conditions, hence, such contracts cannot be counted as having led to savings.

Such questions underscored the need for more clarity, according to Mr. Boakye, who remarked that “if there is anything that we don’t know, I think it’s alright to just put the data out there so all of us can see.”

Corruption wouldn’t be a surprise

The concerns notwithstanding, Mr. Boakye added that, there was definitely cause to suspect that some inflated contracts were awarded under the Mahama administration.

“Sometimes, when you look at the figures and you look at how contracts are negotiated and how they rushed through the process, it makes you wonder whether everything is above board and we have had the occasion to question many of those agreements… I wouldn’t be surprised if there is an investigation and we establish that some of those contracts were purely based on some corrupt practices that allow such deals to go through.”

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By: Delali Adogla-Bessa/citifmonline.com/Ghana

The post Back your claims of ‘inflated’ contracts with evidence – ACEP appeared first on Citi 97.3 FM - Relevant Radio. Always.

The comments also follow the commencement of operations of ExxonMobil in Ghana.

The company is expected to sign an agreement with the government on Thursday, January 18, 2018, on the development.

Citi Business News has been speaking to some industry players ahead of the official signing and they believe government must work to avert some mistakes made in previous oil agreements.

The Executive Director of KITE, Ishmael Egyekumhene described as good indication for future investments, the coming on board of Exxon Mobil.

He tells Citi Business News compelling oil companies to comply with the country’s local content policies will help retain enough revenue in the system.

“Anybody signing a petroleum agreement will have to have that at the back of their minds…We have targets as to how many Ghanaians should be employed, we have targets as to where they can source various products. These are all clearly spelt out in our local content policy. So unlike ten years ago, we are in a position where we seem to know what we like and what we expects for us so I expect them to go strictly by our local content policy,” he stated.

For this year (2018) alone, government is seeking to raise 3.2 billion cedis in revenue from the oil sector.

This is slightly higher than the 3.1 billion cedis estimated in 2017.

As at September 2017, Government has accrued 1.45 billion cedis from the oil sector.

For this year, government has also projected crude oil price of 57.36 dollars per barrel.

With production expected to come from the current oilfields which are the Jubilee, TEN and Sankofa Gye Nyame.

Meanwhile Energy Minister, Boakye Agyarko has also indicated that his outfit will subject all oil blocks contract to competitive bidding to give value for money.

“…Implement open and transparent public competitive tender processes in the award of petroleum blocks, it is our target that this year we conduct the first bidding grounds for the award of exploration introduction rights to successful companies.”

Already, the African Centre for Energy Policy (ACEP) has urged that government sanctions all oil companies that fail to comply with the countries laws guiding oil exploration.

“And how that happens, we have to continue to interrogate whether the politicians are behind them and just giving them the extension even though they are not performing, we have to continue to interrogate that to ensure that the country’s interest is rather served than that of the politicians,” the Executive Director of ACEP Benjamin Boakye told Citi Business News.

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post ExxonMobil must abide by local content laws – Analyst appeared first on Citi 97.3 FM - Relevant Radio. Always.

The energy think tank explains that, Ghana’s decision to review downwards its sulphur content for imported petroleum products, limits it from importing fuel from Nigeria.

Nigeria has for the past three weeks been hit with fuel shortages particularly in Lagos and Abuja.

The development has left commuters and drivers stranded. The government is seeking to improve its refinery system, and increase local supply going forward.

But commenting on the issue, the Executive Director for ACEP, Benjamin Boakye, told Citi Business News that the move will least affect fuel supplies in Ghana.

“It is a unique situation for Nigeria; I do not see a direct implication on Ghana particularly when we have moved away from the product specification that defined the region. In the past we had similar range of products and therefore Nigeria was driving the market so what was going through Nigeria same time could have reached Ghana, Togo and Benin and sometimes Ivory Coast and so we had one cargo moving throughout the sub-region.”

Mr. Boakye however explained to Citi Business News that the absence of a robust system to improve local production and supply of refined products, could have triggered the massive impact of the shortage.

In his view, the government should work to improve the local base so as not to lose the hindsight benefit of its local content laws.

“I think Nigeria is trying to implement some aggressive local content rules which it intends to take some market away from the big players and I think that is the implication of having an aggressive approach when you do not have strong indigenous companies to drive the market. So it must ensure that consumers and do not suffer from something that is well intended,” he further asserted.

Nigerian authorities to the rescue

Bloomberg reports that the Nigerian Vice President Yemi Osinbajo on Christmas Eve made a surprise visit to petrol stations in the commercial hub Lagos, where motorists had been queuing for hours as the nation grappled with a fuel crisis.

The government and the Nigerian National Petroleum Corporation are working to address the issue “as quickly as possible,” Osinbajo was cited as saying in a statement emailed by his office on Monday. “People have gone through a lot of pain and anguish in the past few days, and that is deeply regretted.”

Revamp TOR to save Ghana from similar fate

In a related development, the Institute of Energy Security (IES) has impressed on the government to work to improve Ghana’s local supply of petroleum products.

In IES’s view, the reduction in imports will largely hinge on the ability to revamp operations of the Tema Oil Refinery (TOR).

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post Nigeria’s fuel shortage won’t affect Ghana – ACEP appeared first on Citi 97.3 FM - Relevant Radio. Always.

According to him, there must be transparency and accountability to ensure that such allocations truly benefit the programme.

“It is not just about raising revenue to say we are supporting free SHS, but which specific items are receiving the fund for the sectors, and how can we track it as a people to ensure that the monies are not sipping or diverted into pockets, but rather going to finance education or infrastructure. If we don’t do that, we continue to spend and the outcome will not be the way we want. We are spending so much on education, and yet the challenges are not going away, it means that we need to track how revenue is spent and how the monies that are allocated to ministry of education are performing, and that is the only way we can guarantee real success in the education service” he said

[contextly_sidebar id=”XRPmCRJMpTejnzIQV7fv6pVWp9Pyw7uy”]A research report launched by ACEP on Tuesday, revealed that there was no value for money in oil revenue-funded educational projects in three Senior High Schools.

The report noted that the projects had no impact on student performance nor welfare, and that contracts for all three projects were awarded through selective tendering with only one complete.

Others incurred budget overruns to the tune of GhC1million. ACEP reprimanded the Ministries for what it calls centralized corruption.

According to the 2015 report on the petroleum Holding Funds, an amount of GHC 61,006.75 was disbursed for the rehabilitation of the science resource center at Nalerigu SHS, but since 2015 when ABFA was disbursed to date, no rehabilitation work has happened on the science resource center in Nalerigu SHS.

In 2015, a sum of GHC243,805.49 from oil revenues was disbursed to Swedru school of business (SWESBU) for the construction of 2,500 seater capacity assembly dining hall with an attached kitchen. The project was assessed to provide an evidence-based evaluation of the progress of work done, and how efficiently the funds have been spent on the project since it was awarded. The project has currently been stalled due to non-disbursement of funds to complete it.

“We are centralizing corruption in our country, the Ministry of Education and all the other ministries, they want to spend in Accra so that they can control the money. If you have a project all the way in Nalerigu, why would want to award the contract in Accra when there are local contractors, the community members are there, the district assembly is there, who can engage the contractors and supervise them, so they send these projects to the community, they keep the money in Accra, and projects don’t get done and yet they get paid”Ben Boakye said.

The only recent rehabilitation was completed in 2012; after the Ministry of Education had awarded a contract in 2011, through multiple sole-sourcing to Messr Zidra Fisheries & Enterprise limited to renovate the science resource center at a contract sum of about GHC104,659.53.

The project was however executed and completed in 2012 by AL RAS ENT, a sub-contractor who is based in Bolgatanga.

“Why would someone register a company as a fishery, and later become a construction company. These are interesting prompts that demand that we continue to track how people get contracts, and how they deliver them. For all you know, these are politicians, who are setting up companies and they can move them to any project anywhere they find across the country, so need to begin to track who are behind these companies and how they get contracts in the first place” he said.

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By:Farida Yusif/Citifmonline.com/Ghana

The post Free SHS may collapse without tracking of funds – ACEP appeared first on Citi 97.3 FM - Relevant Radio. Always.

Of the 14 petroleum agreements, five have been affected by the ITLOS ruling, hence their inability to conduct the expected activities on the allocated block.

[contextly_sidebar id=”0QPDtQYHukYok9pwJ6dCUspKinGSk3zz”]The remaining nine have therefore flouted the rules and are also said to have evaded a penalty of 150 million dollars each.

In addition, the expected depletion of oil resources from the Jubilee oilfields by 2025, coupled with declining global oil prices, are expected to affect revenue from the sector.

The Executive Director of ACEP, Benjamin Boakye also argued that the overreliance on oil makes it necessary to ensure maximum benefit from the mineral resource.

According to him, the wanton extension granted the defaulting institutions is also unfortunate for the industry.

“The contract requires that if you do not spend your minimum program, you have to pay your minimum balance to GNPC. But these companies are not paying the differences between their minimum programs and their expenditure to GNPC and we are concerned that even as they are not paying, they are still getting extensions for the blocks,” he asserted.

Mr. Boakye added, “And how that happens, we have to continue to interrogate whether the politicians are behind them and just giving them the extension even though they are not performing, we have to continue to interrogate that to ensure that the country’s interest is rather served than that of the politicians.”

The companies were expected to have injected $923 million expenditure for the initial period contracts.

Meanwhile, all those agreements whose initial periods had expired were supposed to have spent $750 million.

Benjamin Boakye who was speaking at the launch of ACEP’s latest report, the Petroleum Contracts Monitor, 2017, further argued “that is why we are recommending that government should review all those contracts to see those that are not performing and cancel them so that those that can actually deliver on the contract are brought on stream to ensure that we can sustain the oil production that we have started.”

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post ACEP demands cancellation of non-performing Petroleum deals appeared first on Citi 97.3 FM - Relevant Radio. Always.

“ACEP recommends that the government should pass the promised Mineral Revenue Management Act to create additional sources of funds from solid minerals to finance the free SHS policy,” the policy think tank stated in a 10-page document analyzing the 2018 budget with regards to oil and gas.

[contextly_sidebar id=”HuDn3DafUxdZPjtVhj9RqUgAiudSFpB7″]A number of analysts and civil society organizations have criticized government’s free SHS programme which they claim is not sustainable due to the lack of a solid funding source.

The government, in the 2018 budget statement, allocated an amount of GHc1 billion for the free SHS programme.

The Finance Minister, Ken Ofori-Atta, while presenting the budget statement to Parliament said government is also in the process of setting up a fund to receive voluntary contributions from individuals to support the implementation of the free SHS.

ACEP in its analysis also urged the government to educate the public on the voluntary contributions.

“…The government should sensitize the public about the existence of an opportunity to voluntarily contribute to the GETFund to finance the free SHS policy.”

Below are the recommendations ACEP made on the free SHS initiative:

a.ACEP recommends that the government should pass the promised Mineral Revenue Management Act to create additional sources of funds from solid minerals to finance the free SHS policy.

b.In light of the risk of petroleum price volatility and its effects on the ABFA, the government should pay attention to investment attraction in the upstream sector to spread revenue generation risks from the three oil fields currently operational. ACEP insists that existing non-performing petroleum agreements should immediately be reviewed and, where necessary, be re-awarded to companies that possess the requisite capacities to meet contractual obligations. These will ensure speedy off-shore activities to increase the likelihood of revenue generation from upstream oil and gas sector, and thus increase ABFA allocations to the free SHS policy.

c.The Government of Ghana should also consider amending the GETFund Act to re-focus investments, both infrastructure and recurrent, on both basic and secondary levels of education. The National Education Fund-Raising Committee of the GETFund Board should be constituted, if not existent, and strengthened to generate funds through grants, donations, gifts and other voluntary contributions in accordance with section 3(d) of Act 581 to support the free SHS policy. Also, the government should sensitise the public about the existence of opportunity to voluntarily contribute to the GETFund to finance the free SHS policy.

Click here for ACEP’s full statement:

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By: Godwin Akweiteh Allotey/citifmonline.com/Ghana
Follow @AlloteyGodwin

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