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Parliament’s approval of AGM deal amendment shameful – Alex Mould

Former GNPC Boss, Alex Mould has described as shameful, Parliament’s approval of the amendment to the AGM petroleum agreement despite all the questions surrounding it.

According to him, AGM’s push for the agreement which was first signed in 2013 to be amended even without any substantial work on the block was against international standards in the industry.

Parliament last Friday approved the amendment to the AGM petroleum agreement with a condition that the state’s additional carried interest to be increased from 3% to 10% in addition to 15% participating interest and 10% royalties.

The Energy Minister has six months to report back to Parliament.

Speaking at a forum organized by the Caucus for democratic governance, Ghana, Alex Mould said AGM’s request should not have been considered.

“It seems that AGM has been given a new lease of land through a sole retender and Government has reduced its stake from 49% to 18%. Be mindful that AGM was originally given this block from a competitive tender and 3 other companies that are changing the terms before they start work is akin to our controversial road contractors who bid slowly only to come back before the work starts and add to the variation.

“Even in road contracting, this is not allowed. Also, it is our understanding that the original local content partner is being replaced by a new local content partner called Board Energy. This company was set up months ago before Parliament brought this ridiculous amendment to Parliament who shamefully approved given the questions and issues raised.”

Details of the amendment

Parliament last Friday 3rd May, decided to approve amendment No 1 to the Petroleum Agreement among parties including the Ghana National Petroleum Corporation (GNPC), and AGM Petroleum Ghana Limited, in respect of the South Deepwater Tano Area located within the Gulf of Guinea.

By the dictates of Article 268 (1) of Ghana’s constitution, any rights or concession for the exploitation of any mineral, water or natural resources of Ghana is subject to ratification by the legislative assembly known as Parliament.

Pursuant to the law, the Minister for Energy laid before the House for the consideration and approval of the amendment to the said Petroleum Agreement.

The House returned a verdict of conditional approval by resolution, whereby it directed the Minister to incorporate two stated recommendations within six months in order to validate the approval.

The recommendations are

a. That the Ministry of Energy renegotiates the additional interest from 3% up to 10%.

b. That the Ministry together with Petrica Holding AS should facilitate the resolution of issues surrounding the 2.5% shareholding interest of MED Songhai in AGM Gibraltar and its consequential interest.

c. That the Minister briefs the house on steps taken to implement the committee recommendations within 6 months of this approval.

By this, the Minister of Energy has a busy schedule within the next six months as he must return to Parliament with the new additions to secure the approval for the Agreement.

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