Controversial Contractor Hans & Co Under Scrutiny Over $200M Oil Field Cleanup
Ghana faces mounting challenges in its efforts to decommission the Saltpond Oil Field, an offshore site that yielded less than $10 million in revenue over its five-decade lifespan.
Initial projections placed the cost of decommissioning at $100 million, but estimates now suggest expenses could soar to $200 million, raising serious questions about project management and accountability.
Vice President of IMANI Ghana, Bright Simons, in a series of tweets, revealed that nearly half of the projected budget has already been spent, with little progress to show.
The spotlight has turned to Hans & Co, a contractor with a controversial role in the operation, and the Ghana National Petroleum Corporation (GNPC), which initiated the clean-up in 2021 to address environmental hazards posed by the deteriorating oil rig and abandoned wells.
A Troubled Legacy
Commissioned in the 1970s, the Saltpond Oil Field symbolized Ghana’s early attempts at oil exploration. However, production peaked in the 1980s and dwindled shortly after, with the site effectively abandoned by 2010. Decades of neglect left behind hazardous infrastructure, prompting GNPC to launch the decommissioning exercise.
The project’s execution, however, has been plagued by controversy. Hans & Co, a firm under the Hans Group, was contracted for the decommissioning despite lacking experience in petroleum or environmental engineering. Critics have described the company as “mysterious,” with little public information about its expertise or leadership.
Hans & Co’s Controversial Role
Hans & Co’s Executive Chair, Ms. Gloria Bartels, is a well-known socialite often featured in society magazines for her high-profile lifestyle rather than her business accomplishments. Analysts speculate that her company’s powerful political and social connections played a pivotal role in securing the lucrative contract. Reports suggest Hans & Co has ties to influential figures in Ghanaian politics and charismatic churches, though these claims remain unverified.
The firm’s questionable qualifications have drawn scrutiny, especially after its refusal to collaborate with TSB-Ensol, a consortium of established decommissioning experts. TSB-Ensol, composed of TSB (a decommissioning specialist since 1987) and Ensol (a local Ghanaian firm), was awarded a $3 million contract to oversee project management. Hans & Co’s non-cooperation sidelined TSB-Ensol, further delaying the project and escalating costs.
A History of Mismanagement
The Saltpond Oil Field’s issues are not new. The original operator, Agripetco, abandoned the site in the 1980s, leaving the infrastructure in disrepair. PFI, which assumed control in 1984, reportedly allocated funds for decommissioning. However, these resources appear to have been mismanaged or ignored, leaving subsequent administrations to grapple with the fallout.
Today, the financial and environmental costs of neglect are becoming increasingly apparent. Public outrage has intensified as Ghanaians question why the decommissioning project, intended to mitigate environmental risks, has instead spiraled into a financial debacle.
Calls for Accountability
Industry experts warn that the Saltpond saga sets a troubling precedent for Ghana’s oil and gas sector. Without robust oversight and accountability, the project risks cementing its status as a cautionary tale of mismanagement.
As the operation continues, attention remains fixed on Hans & Co and its enigmatic leader, Ms. Bartels. With $200 million potentially at stake, the question looms: will the decommissioning resolve a decades-old environmental challenge, or will it further tarnish Ghana’s management of its natural resources?
Find below the tweets by Mr Simons:
First Tweet
Your reward as a policy analyst in Ghana is a healthy dose of chronic headaches.
Today, I am trying to wrap my poor head around the crazy story that is the “decommissioning” of the Saltpond Oil Field. “Decommissioning” is just a fancy word for cleaning up an oil field of its abandoned equipment and facilities after production has ceased. Ready for your own headache? Let’s go.
1. We like to say that Ghana first started producing oil on a commercial basis in 2010, after Jubilee’s discovery in 2007. This is not entirely accurate. As far back as 1970, a commercial discovery was made at Saltpond by a consortium known as Signal Amoco.
2. But the quantity of oil found was small and the companies shied away from investing enough money. The Saltpond field was thus passed to Agripetco, which also struggled to make enough money from it.
3. In 1984, the government handed it over to PFI but nothing much became of that arrangement, so in 1985 the field was shut down.
4. In 2000, it was revived and an agreement signed with Lushann, run by a Ghanaian based in Texas and two Nigerian partners. He tried to milk it for what it was worth. But by 2015, it was clear that the whole setup was a mess and the field was shutdown again. In 2016, Lushann’s agreement, initially scheduled to end in 2024, was cancelled.
5. Between 1970 and 1985, the field produced about 3.55 million barrels of crude oil. Between 2000 and 2015, it produced about 1.4 million barrels of oil. Had it even been the case that the companies who operated the field were conscientious in paying their taxes and royalties, Ghana would have earned about $60 million over the 45-year period.
6. Unfortunately, the companies were not consistent. There were many years during which nothing at all was paid. For example, between 2002 and 2011, Lushann refused to pay most of what it owed to Ghana citing poor cashflow.
7. When the government sat up and pushed hard, royalties totaling about $500,000 were paid for the 2 years of 2012 and 2013, but not the taxes and dividends. Lushann said they just couldn’t afford.
8. I estimate that over the 55-year period of its existence, adjusted for inflation, the government has, on behalf of Ghana, earned less than $10 million from Saltpond, even after adjusting for inflation.
9. Meanwhile, the main jack-up rig in the field, which is in the sea offshore Saltpond, by the way, has been rotting. It is said to pose a danger to vessels and wildlife. Under Ghanaian law, after profitable oil has been depleted, the investors operating the field have to clear off the equipment and facilities. Because Saltpond field has always been managed by deadbeat investors, those costs now fall on Ghana.
10. Between 2016 and 2018, Pap Energy was contracted and paid to do all the preliminary work to lay the grounds for the decommissioning/clear-up.
11. This being Ghana, the new government that took office from 2017 insisted that another consulting exercise was needed. Hence, in 2021, $3 million more was found and paid to Ensol-TSB to provide project management consulting ahead of the removal of the “Mr. Louie” jack-up rig installed in the Saltpond field by Agripetco in the 1970s.
12. In 2022, the main contract for removal was awarded to Hans and Co to the tune of $96 million. By 2024, $89 million of the amount had been logged as spent. The contractor was however still owed $3.7 million.
13. The bulk of the work done by Hans & Co involves pumping cement into various components of the rig structure in order to seal and plug any potential leakages, whilst maintaining structural integrity.
14. In October 2023, the work was suspended and a few months later the Hans and Co crew left the country. The contractor claims that it can’t continue to remove the physical structures without more money.
15. How much more money do they say is needed? A whopping $81.11 milliion!
16. What I am telling you is that to remove a rotten rig from offshore Saltpond, Ghana is very close to spending $200 million! For an oil field that has not generated even up to $10 million in 55 years!
17. By the way, the picture on the left is how the rig looked before the roughly $100 million was spent on the project. The one on the right is how it looks like now. You can proceed to ignore the lighting contrast. Thank you.
18. How’s that headache going for you?
Second Tweet
My post about how Ghana has spent nearly $100 million to remove a rotting oil-rig offshore Saltpond without much success (before & after pictures attached) triggered several DMs. One question that kept coming up is: whose is the lucky company – Hans & Co – that got the deal?
Well, it is all very mysterious. Let me first clarify the point I made about TSB-Ensol and that $3 million contract. Ensol is a local company that partnered with TSB, a company that has specialised in decommissioning/removal of oil field equipment & facilities since 1987.
Their consortium – TSB Ensol – did get a $3 million contract to provide project management and oversight on behalf of GNPC for the Saltpond decommissioning exercise. However, they were not allowed to provide the project management services. Hans & Co refused to cooperate. Hans & Co had such powerful allies in high places that the technical agencies directly responsible for contract-awarding didn’t seem capable of getting them to cooperate.
Well, as I said, Hans & Co is very mysterious. As you can see from their website (hansgroupltd.com) attached, they follow the old Akan proverb that good beads don’t rattle. They really don’t have to sell themselves to anyone. Anyway, the mysterious firm is apparently part of the Hans Group, which doesn’t publicise its management. The Executive Chair is one Ms. Gloria Bartels, who is described by the posh bloggers as a “socialite” and “of old money”.
She seems to split her time between the UK and Dzorwulu and features occasionally in glamour magazines, such as Ovation. Usually in the context of high society weddings. Her daughter owns a high fashion brand and has been tipped by the posh bloggers as deserving her own TV show.
It is a bit difficult finding links between Hans & Co, which started operating in 2018, and petroleum/offshore environmental engineering. There does seem to be good links with some charismatic churches and a swashbuckling pastor however. Though even that association is somewhat hazy.
Ms. Bartels is prominent enough to have got an invitation as a donor to charity fairs held by the former first lady. Hans Group hired the drillship, Trident VIII, on the strength of the financial mobilisation provided by GNPC to plug and cement the 6 wells hooked up to the rotting oil jack left behind by Agripetco in the 1980s.
Some Ghanaian analysts say that the company that took over from Agripetco in 1984, PFI, left money behind for the decommissioning but somehow that job was ignored.
Forty years later, Ghana has hired a powerful socialite with an impeccable fashion sense to fix the problem of decommissioning/cleaning-up the Saltpond Oil Field.
At a potential cost of $200 million. Despite making less than $10 million from the field during its 55 years of existence. Talk of headaches!
Third Tweet
The headache has degenerated into a heartache.
This rotting Rig could have been Refurbished for less than 10 million Usd. The Technocrats and Politicians are always at their game of “What is in this for me?” ( Corruption )
Ghana is bleeding and will continue to Bleed to Death if not Stopped.