PRESIDENT PLACES GHANA GAS UNDER PROBE

Ghana National Gas Company (Ghana Gas or GNGC), recently caught up in allegations of management intransigence and questionable procurement, is currently under investigations, President John Dramani Mahama has disclosed.

“I asked the Minister [for Energy] to engage an appropriate technical person to carry out an audit based on the allegations that have been made…,” President Mahama said Thursday night at the Institute of Economic Affairs' (IEA) Evening Encounter platform in Accra.
Despite being Vice President and head of the Economic Management Team at the time (July 2011) when Ghana Gas was incorporated, President Mahama implied that he was sidelined in the processes leading to the setting up of the company. “I was not a part of the current structure that was established but I would have thought that consultation would have been held enough to come out with the current structure that exists.”
The revelations were occasioned by a question from Dr Steve Manteaw, Chair of the Civil Society Platform on Oil and Gas (CSPOG), who wanted to know from the President what he would do about the issues of alleged impropriety that  have surrounded Ghana Gas' dealings with Sinopec International Petroleum Services Corporation.
The Chinese firm is in charge of building a plant as well as laying pipelines onshore and in offshore shallow waters for the utilisation of gas potentials from the Jubilee Field under a turnkey arrangement. The project is being funded with a $750 million component of the $3 billion loan facility that Ghana secured from the Chinese government last year.
But according to documents authored by persons close to Ghana Gas and Sinopec, there were suspicions that the gas plant as well as the pipelines would cost more than those of rival bidders even though the performance efficiency of the gas plant was comparatively lower. It is suspected that the Chinese firm might have engaged in transfer pricing manipulation, having asked its special purpose subsidiary offshore firm, SAF Petroleum Investments (FZE), which is registered in Dubai, to procure the facilities and turn them over.

It is also alleged that Dr George Adjah-Sipa Yankey, Chief Executive Officer of Ghana Gas, had also refused to be answerable to the Energy Ministry and the Petroleum Commission, allegedly claiming to be answerable to the President. This was in spite of the provisions of the Petroleum Commission Act, 2011 (Act 821) which gives the Commission the mandate to regulate the petroleum sector and its activities. The Commission in turn is accountable to the Ministry.
A few hours to the IEA Evening Encounter, Dr Manteaw had addressed a heavily attended press conference on behalf of the CSPOG, demanding that President Mahama instituted investigations into activities of Ghana Gas.
Calling for further actions, the group stated: “We demand...that Dr. George Sipa Yankey be made to step aside as Chief Executive Officer of Ghana Gas, pending the institution of a high level forensic investigation into the affairs of the company.”
Dr Manteaw then took advantage of the opportunity offered CSPOG to ask the President a question at the IEA event to articulate the concerns of the Platform regarding the gas development to the President.
“They [CSPOG members] are unhappy about management intransigence, questionable procurement through which Ghana must have been shortchanged, issues related to transfer pricing manipulations, etc.
“They are also unhappy about the manner of establishment of Ghana [National] Gas Company as a limited liability company and yet financed 100 per cent with public money. This arrangement, they claim, extricates the company from parliamentary oversight and for which reason it’s been difficult to call Ghana Gas Company to order. They are concerned because this is our oil money,” he informed President Mahama.
He then tabled a demand followed by a quiz about what the President intended to do. “They want Ghana Gas Company restructured as an affiliate of Ghana National Petroleum Corporation [GNPC] to tap into the latter’s expertise and experience as well as to enhance the corporate profile and leverage of GNPC in the industry.
“Will you consider setting up an enquiry into the affairs of Ghana National Gas Company as being demanded by my group? And will you be amenable to reconsider the nature of the establishment of the Ghana gas company as being demanded by the group?”
Responding, President Mahama narrated that “Shortly after I was sworn in as President, a document came to my attention that somebody had brought to me and made all kinds of allegations in respect of, I think, some of the issues that you are talking about. I called for a briefing on it. I was given a briefing on it by the Minister [for Energy].”
He said he subsequently met with stakeholders including the chair of the board of Ghana Gas, the CEO of Ghana Gas, the Ministry of Energy, and the GNPC, as well as someone identified as the author of the documents that had damned the Ghana Gas-Sinopec transaction.
Consequently, “I asked the minister to engage an appropriate technical person to carry out an audit based on the allegations that have been made in that paper. My understanding is that, that audit is ongoing and when I get a report of it, it will inform me to be able to take any further decisions that need to be taken.”
Regarding CSPOG’s call for restructuring of Ghana Gas, President Mahama indicated his willingness to do so should it be in the interest of the nation. “We are happy to hear your views about restructuring Ghana Gas Company. I think that what we want is the best for Ghana and if your views are the best for Ghana I don’t have any hesitation implementing them.”
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