In a significant development, the government of Ghana has successfully completed the divestiture of shares in Jubilee Oil Holdings Limited (JOHL), an offshore entity, to GNPC Explorco, a subsidiary of the Ghana National Petroleum Corporation (GNPC).
This move, outlined in a comprehensive report by the Parliamentary Committee on Mines and Energy during the third session of the 8th Parliament, marks a pivotal step in addressing longstanding concerns raised by watchdogs, including the Public Interest and Accountability Committee (PIAC), regarding the use and management of oil revenues.
The transfer of JOHL shares to Explorco aligns with a directive from Parliament, instructing GNPC to expedite the process, while marking the substantial influence of civil society and regulatory bodies in shaping Ghana’s energy policies and governance.
Originally acquired by GNPC through a share purchase agreement in 2021, JOHL holds a 7 percent (7%) commercial interest in the Jubilee and TEN oil fields. However, controversy arose due to its incorporation in the Cayman Islands, a tax haven, leading to concerns about transparency, accountability, and the risk of revenue leakages, in violation of the Petroleum Revenue Management Act (PRMA).
Despite the delayed transfer, JOHL has proven to be a lucrative investment, reporting a gross margin of $207 million in 2022 from the Jubilee and TEN fields.
But, PIAC raised concerns about GNPC utilizing JOHL for unapproved operations, including cash calls on Springfield and ENI Block 4, as well as the decommissioning of the Saltpond oil rig. Leading to this development, PIAC emphasized the importance of revenues from Explorco’s operations being lodged in the Petroleum Holding Fund (PHF).
“PIAC has always been in constant discussions with GNPC, therefore we are not surprised with the current development. GNPC has since exhibited good faith by telling PIAC in its meetings that they are working on the process of transferring the shares to Explorco”, noted Technical Manager at PIAC, Mark Agymang.
Head of Policy, Petroleum and Conventional Energy at Africa Centre for Energy Policy (ACEP), Kodzo Yaotse, has also stressed the need for thorough accountability of the revenues accrued to JOHL despite the transfer’s belated status.
This development highlights the delicate balance between economic interests, regulatory oversight, and public accountability in Ghana’s oil and gas sector, emphasizing the need for transparency and adherence to established governance mechanisms.