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It is illegal to force GNPC to seek $431 million loan without parliamentary approval – Minority tells president

The Minority in Parliament has raised accusations against the Presidency, alleging that it exerted pressure on the Ghana National Petroleum Corporation (GNPC) to secure a $431 million loan agreement from Lukoil International Trading and Supply Company (LITASCO) SA, a Swiss company involved in refinery and retail operations across Europe.

The Minority contends that this action by the Presidency is not only unconstitutional and unlawful but also a clear violation of Parliament’s directive and resolution.

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Based on a memo obtained by the Minority, it appears that the Presidency convened a meeting on September 14, 2023, at 11 a.m.

During this meeting, the GNPC was directed to seek board approval to raise the specified amount without the need for parliamentary approval.

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However, it’s worth noting that certain members of the GNPC board expressed their reservations about this directive.

The attendees at this meeting included the Chief of Staff, the Executive Secretary to the President, the Minister of Finance, the Deputy Minister of Energy, the CEOs of Karpower and LITASCO, as well as other executives from these companies.

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Don’t commit illegality

Speaking to the press in Parliament on Wednesday (Sept 20), the Ranking Member on the Mines and Energy Committee, John Jinapor, called on the Chief Executive of the GNPC and the board to decline the directive from the Presidency.

“If you proceed with this directive, you will be committing an illegality. You do not have that mandate or that power to enter into such an agreement without parliamentary approval.

“The Minority wishes to serve notice that we shall use every necessary tool available to ensure that we do what is right and legal,” Mr Jinapor warned.

Parliament’s directive

Just before Parliament adjourned in August of this year, the Committee on Mines and Energy, led by Chairman Samuel Atta Akyea, presented a report on the GNPC’s 2023 work programme.

One of the significant matters discussed was the GNPC’s request to secure a $620 million loan facility from LITASCO SA.

Parliament made a decision during this session, opting not to approve the specified amount as part of the GNPC’s work program.

Instead, Parliament clearly instructed the corporation to provide the terms and conditions of the proposed loan, following the guidelines outlined in Article 181 of the Constitution. This information is necessary for the House to review and make a final determination regarding the loan request.

“To utmost shock, we have come across a document indicating that the Presidency is using coercive force and the power of the Presidency to compel the GNPC to proceed and execute this loan agreement without parliamentary approval,” he said.
He pointed out that some of the board members kicked against such illegality.

Collaterizing TEN Field oil

The MP added that another document that was also intercepted at the board level of the GNPC had what he described as the deed of indebtedness, the JOHL Crude Oil Supply and Purchase Agreement, the Jubilee Oil Holding Limited (JOHL) prepayment facility agreement, the guarantees facility agreement and the crude oil supply and purchase agreement.

“The key has to do with the fact that GNPC is raising this facility from LITASCO LUKOIL and in return, they are giving our oil out to this company for the next five and a half years.

“Indeed, all the oil in the TEN Oil Field have been incorporated, including royalties and our carried and participating interests will be escrowed into this company

More importantly, Mr Jinapor explained that every year, a minimum of 3.8 million barrels of crude oil would be given to LITASCO for the loan being raised.

“No one even knows exactly what they want to use this money for apart from some repayment of debt.

“This is a government that received over $1.4 billion of oil receipts in 2022, the highest ever, and despite receiving this huge oil revenue from our oil sales, you want to take $431 million today and mortgage our future for the next five-and-a-half years and escrow the whole of TEN field oil,” he added.

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