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Minority chases finance minister for Ghana’s US$100 million oil cash

The Minority in Parliament, has expressed worry over the government’s inability to account for over $100 million accruing from Ghana’s Petroleum lifting in the first quarter of 2022, which has been hidden in the Cayman Islands in an offshore company known as JOHL.

The Herald, first reported on this matter in February this year. In that publication, the paper mentioned that its interactions with experts on the 7percent interest in the Occidental (Oxy) transaction, revealed Ghana was entitled to a whopping US$300 million but the money was being kept in an offshore account by some state officials in the name of Jubilee Oil Holdings.

This paper had mentioned that “the 7 percent interest in Jubilee and TEN fields was acquired by GNPC in October 2021. This interest is estimated to generate about $300 million, about GHS 1.9 billion, a year as cash flow. In good conscience, any well-meaning analyst would expect the Minister of Finance to plug these numbers into the fiscal table to shore up receivables of the country. This could prop the primary balance and shape market perception of the country.

“However, the Finance Minister feels comfortable diverting the cash flow to a Cayman Islands registered entity, Jubilee Oil Holdings. Consequently, he diverted the tax revenue of about $170 million to enable GNPC to front the transaction which handed the 7% interest in Jubilee and TEN to Jubilee Oil Holdings.

Yesterday, a statement issued by the Ranking Member on the Energy and Mines Committee of Parliament, John Abdulai Jinapor, mentioned a lower figure saying the minority caucus was alarmed that contrary to requirements of the PRMA, revenues accruing from the nation’s oil fields are not being paid into the Petroleum Holding Fund (PHF).

“We have become aware that following the acquisition of a Seven percent (7%) interest in the Occidental (Oxy) transaction in respect of the Jubilee and TEN Fields by the Government ostensibly for GNPC in 2021, the Minister of Finance has clandestinely ceded the shares to an offshore company known as JOHL (a company set-up in the Cayman Islands) in a very surreptitious and opaque manner,” the ranking member on mines and energy committee in Parliament, John Jinapor stated.

The revelation was also captured in the 2022 semi-annual report on petroleum receipts by the Public Interest and Accountability Committee (PIAC).

It has therefore asked the Minister of Finance and the government, to repatriate all such illegal transfer payments back into the Petroleum Holding Fund (PHF).

“The decision by the current NPP Government to transfer revenues accruing from about 944,164bbls of crude lifting in the Jubilee and TEN fields to a company established in a safe haven (outside Ghana) without Parliamentary approval, amounts to a gross violation of the Petroleum Revenue Management Act, 2011 (Act 815) and Public Financial Management Act (Act 921).

“Failure to comply with our ultimatum will compel the Minority to use the necessary parliamentary processes to haul the Minister of Finance to parliament for possible censure.

In the February 4th edition of The Herald, the paper reported that in the “context of a struggling economy; high debt and high corruption, analysts are worried about the level of greed that directs revenue efforts to the poor. The Minister of Finance is hell bent on taking e-levy from the wallets of citizens but remains adamant to plugging leakages that benefits him and his family, led by the president.

“In a series of publications, The Herald, has pointed out the obvious illegality, championed by the Finance Minister, Ken Ofori-Atta, and friends at GNPC and Ministry of Energy, to use tax revenue to acquire petroleum assets and hide it from the people.

“The 7 percent interest in Jubilee and TEN fields was acquired by GNPC in October 2021. This interest is estimated to generate about $300 million, about GHS 1.9 billion, a year as cash flow. In good conscience, any well-meaning analyst would expect the Minister of Finance to plug these numbers into the fiscal table to shore up receivables of the country. This could prop the primary balance and shape market perception of the country.

“However, the Finance Minister feels comfortable diverting the cash flow to a Cayman Islands registered entity, Jubilee Oil Holdings. Consequently, he diverted the tax revenue of about $170 million to enable GNPC to front the transaction which handed the 7% interest in Jubilee and TEN to Jubilee Oil Holdings.

“One insider expresses his shock at the decision, “I sat amazed as they were comfortable diverting the interest from the state. This money is instant cash from producing fields and more than what can practically come from the overestimated E-levy, why then is someone motivated to take that away and tax the poor people”.

“It appears the strategy of the Akufo-Addo family on the transaction is working perfectly. They have managed to quiet the media space and prevented further communication by government officials. The Deputy Minister of Energy Egyapa Mercer, who stepped in to do initial damage control, has recoiled from the fray at the instructions of his masters.

“Our sources also point to efforts to get the Minority in Parliament to remain quiet about the transaction. Ken Ofori Atta is working to prevent being called to answer questions on the floor of parliament on how he diverted Tax revenue without parliamentary approval.

“On the 14th of January 2022, the minority issued a statement to indicate commitment to hold GNPC and the government accountable on the subject.

“However, it has been three weeks without further action. At the same time Jubilee Oil Holdings, continue to lift oil and advance the interests of Akufo-Addo family.

“Already, industry watchers are losing hope that the minority can save the situation. Another individual close to the Akufo-Addo family reacts, “with the amount of cash available to manage people who understand the situation, I doubt anything will come out of the minority. Sacrificing one month receivable (about $25 million) to get people mute has been on the table. The usual targets are MPs, the media and CSOs”.

“This country is unlikely to reverse the economic doldrums with the high appetite of the Akufo-Addo family to channel needed resources for family gains. This is the underlying realism the Ken-led ministry is averse to any invitation to IMF for assistance. The entry of the IMF will hurt many deals that are yet to mature in the oil and Gas, insurance and financial sectors of the economy.

“The Finance Minister, had set up a gang of communicators to Inform Ghanaians that he does not need to go to the IMF.

“However, he deliberately avoids telling the people that he has been going to the IMF since the COVID started.

“The IMF has given Ghana $2 billion in two year. In 2020 Ghana got $ 1 billion Rapid Credit Facility (RCF). In 2021 Ghana got $ 1 billion New Special Drawing Rights (SDRs), which Ken Ofori-Atta did not blink before accessing it. The conflict of his interests against the national interest is what is preventing him from getting support from the IMF in managing the economy.

“Ken Ofori Atta knows that he will not be around to pay the US$2 billion, which is interest free with a 5 years grace period. Neither can he access further funds without a Programme. Therefore his new tactic to bastardize the fund.

Below is the full statement from the Minority

US$100 Million Worth Of Ghana’s Oil Money Missing – Minority Raises Concern

The Minority in Parliament has noted with serious concern the inability or refusal of the Akuffo-Addo/Bawumia led Government to account for over $100Million accruing from Ghana’s Petroleum lifting in the first quarter of 2022.

The decision by the current NPP Government to transfer revenues accruing from about 944,164bbls of crude lifting in the Jubilee and TEN fields to a company established in a safe haven (outside Ghana) without Parliamentary approval, amounts to a gross violation of the Petroleum Revenue Management Act, 2011 (Act 815) and Public Financial Management Act (Act 921).

We have become aware that following the acquisition of a Seven percent (7%) interest in the Occidental (Oxy) transaction in respect of the Jubilee and TEN Fields by the Government ostensibly for GNPC in 2021, the Minister of Finance has clandestinely ceded the shares to an offshore company known as JOHL (a company set-up in the Cayman Islands) in a very surreptitious and opaque manner.

The Minority is very much alarmed that contrary to requirements of the PRMA, revenues accruing from the nation’s oil fields are not being paid into the Petroleum Holding Fund (PHF), which has been confirmed in the 2022 semi-annual report on petroleum receipts by the Public Interest and Accountability Committee (PIAC).

As if this is not enough, the report further reveals that Capital Gains Tax was not assessed and collected by the Ghana Revenue Authority (GRA) in the sale of the 7% interest by Anadarko in the Jubilee and TEN Fields in 2021.

This NPP Government is proving by the day, that the nation’s oil resources cannot be entrusted in their care because not long ago the PIAC under the chairmanship of Dr. Steve Manteaw accused them over their inability to account for about GHȼ2 billion of Ghana’s oil cash for the 2017, 2018 and 2019 fiscal years.

This is surely another “Agyapa” deal in the making and we as a Minority will not sit aloof for this Government to raid the national purse, especially at a time when the nation is struggling to raise much needed revenues for critical expenditure.

We demand that the Minister of Finance and for that matter Government, must with immediate effect repatriate all such illegal transfer payments back into the Petroleum Holding Fund (PHF).

Failure to comply with our ultimatum will compel the Minority to use the necessary parliamentary processes to haul the Minister of Finance to parliament for possible censure.

John Abdulai Jinapor
(Ranking Member, Mines and Energy Committee)

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