Ghana National Petroleum Corporation (GNPC)

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The Ghana National Petroleum Corporation (GNPC) was established in 1983 as a state-owned entity to undertake the exploration, development, production and disposal of petroleum in Ghana,[1] and is also responsible for importing the country's crude and refined petroleum product requirements.[2] All international oil companies operating in Ghana are required by law to partner with GNPC in their exploration activities.[3]

Contents

History

The GNPC was established to support the Ghanaian government's efforts in providing a reliable supply of petroleum products and reducing the country's dependence on crude oil imports through the development of its own petroleum resources. Prior to the establishment of the GNPC in 1983, this had been a competency of the Petroleum Department under the Ministry of Fuel and Power. The coordination of petroleum exploration activities was the job of the Technical Directorate of the Ministry of Fuel and Power and the Geological Survey Department before the establishment of the GNPC.[1]

The Petroleum Law of 1984 empowered GNPC to operate in all open acreage of the country on its own or in association with foreign partners, with the Production Sharing Agreement the basic contract between the state, GNPC and private companies [4]

Functions

According to the GNPC website, the corporation was established with six primary objectives, to: accelerate petroleum exploration; make production meet national requirements; ensure that Ghana obtains the greatest possible benefits from its petroleum resources; obtain the appropriate technology for petroleum operations; enable the training of citizens of Ghana and development of national capabilities in all petroleum operations; and prevent adverse effects of petroleum operations on the environment, resources and people of Ghana.[1]

Activities

The GNPC has a 13.75% stake in the 80,000 barrel per day (bpd) Jubilee oil and gas field.[5] In October 2010, GNPC made a $5 billion joint bid with CNOOC, China’s largest offshore oil producer, to buy the assets of Kosmos Energy in Ghana, including Kosmos' 23.49 percent stake in Jubilee. Kosmos had agreed to sell its Ghanaian assets to ExxonMobil for $4 billion on 12 October 2009, but the next day GNPC said it was still in talks with Kosmos about acquiring the assets itself,[6] and nixed the ExxonMobil deal. In November 2010, Kosmos rejected the GNCP-CNOOC bid, with GNPC chief geophysicist Gabriel Q.A. Osatey saying at the time that Kosmos "has now decided to remain [in Ghana]. That is for sure."[7]

Since Ghana started pumping oil from the Jubilee field in December 2010, GNPC has inked deals with several international entities to exploit Ghana's hydrocarbon reserves. In June 2011 Hess Corporation announced the discovery of oil at the Paradise-1 deepwater exploration well, which Hess would operating with a 90% working interest, with GNPC controlling the remaining 10%.[8] In August 2011 the company signed a Memorandum of Understanding (MoU) with Saudi Arabian firm PetroSaudi International to jointly explore, develop and produce oil and gas and related services in Ghana. Also in August 2011, Ghana's government announced it planned to borrow $800 million from the state-owned China Development Bank to develop its natural gas infrastructure.[9]

Organisational structure

The GNPC has a seven-member Board of Directors appointed by the Ghanaian Government to supervise the corporation’s operations.[10] As of early 2012 Nana Boakye Asafu-Ajaye served as the company's Chief Executive Officer, while Thomas Manu was its Director of Operations.[11]

The Ministry of Energy in 2001 commissioned a committee to advise the government on a restructuring of GNPC to focus on the corporation's core business - i.e. oil exploration - divesting GNPC from non-viable activities and determining appropriate workforce levels for the new organisation. At the time, Energy Minister Albert Kan-Dapaah said that GNPC had over the years embarked on activities unrelated to petroleum activities on the pretext that it was raising revenues for core activities. This involved the formation of subsidiary companies and acquiring interests in others, including Ada Songhor Salt Limited, Energy Products Limited, Connexat Limited, Prestea Sankofa Gold Limited, Western TeleSystems, Valley Limited and Globaltouch Holdings Incorporated.[12] Further restructuring has taken place to position GNPC to make it more competitive in a privatised market. The first phase of this encompasses separation of the company's industrial activity from its trading functions, including the importation of crude oil and other products (particularly liquid petroleum gas). The second stage envisions establishment of a gas affiliate which would manage the company's project to produce gas in the Tano basin.[2]

External Links

Ghana National Petroleum Corporation Act, 1983

References

  1. 1.0 1.1 1.2 "About GNPC" GNPC website, Retrieved 13 February 2012.
  2. 2.0 2.1 "Ghana National Petroleum Corporation (GNPC)" MBendi Information Services, 12 December 2011.
  3. "GNPC Positions To Become Lead Operator" Ghana Web, 20 January 2012.
  4. "Oil and Gas in Ghana" MBendi Information Services, 22 November 2011.
  5. "GRA Moves To Tax Tullow-EO Deal" Ghana Oil Watch, Retrieved 28 July 2012.
  6. "Cnooc Said to Bid $5 Billion With GNPC for Kosmos Jubilee Stake" Bloomberg, 22 October 2010.
  7. "Bid for Ghana Oil Field Rebuffed" Wall Street Journal, 2 November 2010.
  8. "Anadarko Hits Oil in Ghana Again - Analyst Blog" Nasdaq, 19 January 2012.
  9. "Ghana's GNPC Inks Oil and Gas MOU with Petrosaudi" GulfOilandGas.com, 16 August 2011.
  10. "Organisational Structure" GNPC website, Retrieved 13 February 2012.
  11. "Management" GNPC website, Retrieved 13 February 2012.
  12. "Committees present reports on GNPC, Saltpond oil" Modern Ghana, 25 June 2001.
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