Revert shares in JOHL to GNPC to benefit from $100m per oil lifting – CSO Budget Forum tells Gov’t
Government has been urged by the CSO Budget Forum to transfer shares in Jubilee Oil Holdings Limited (JOHL) back to the Ghana National Petroleum Corporation (GNPC).
The collapse and subsequent reversion of ownership of JOHL to GNPC, the CSO Budget Forum asserts, will enhance government’s revenue from the oil sector.
According to the Forum, government stands to gain a little over $100m in revenue per a single lifting by JOHL.
“Government will be shoring up its oil revenue by allowing GNPC to be lifting oil rather than allowing JOHL to lift oil. JOHL makes over $100m per oil lifting and this amount does not come to government directly because JOHL is registered outside the country and in a tax haven (sic).
“Shares in JOHL need to be transferred back to GNPC so that revenue from oil lifting will go to government,” the Forum noted in a media engagement on Tuesday, October 18, 2022.
The reversion of JOHL shares to GNPC, formed part of requests tabled by the CSO Budget Forum before the Finance Ministry, in the latter’s engagement with civil society organisations in an attempt to ensure that all vital inputs from citizens and organisations are captured in the 2023 budget to be presented to Parliament next month.
Jubilee Oil Holdings Limited (JOHL) is a company owned by the GNPC but registered as a foreign company and situated in Cayman Islands, a known tax haven.
Last year, GNPC acquired a 7% interest in Jubilee and TEN oil fields for about US$164 million from Occidental (Oxy) through a process that breached the law and hid Ghanaian assets from all the accountability mechanisms established for the efficient management of petroleum revenues.
The Ministries of Energy and Finance loaned tax revenue from Oxy to GNPC to pay for the acquisition of the 7% interest. At the time of the acquisition, the 7 percent interest was held by Jubilee Oil Holdings Limited (JOHL) through Anardako WCTP, Oxy’s Ghana registered subsidiary.
Instead of acquiring the 7 percent interest, GNPC acquired JOHL in the Cayman Islands, which subsequently became independent of any local company.
For ten months since the acquisition, JOHL had operated in Ghana’s upstream petroleum sector without registration in Ghana as required by Ghanaian law.
Again, contrary to an earlier communication from GNPC that it intends to transfer the acquired interests to Explorco, its subsidiary, the Corporation only recently registered JOHL as an external company, maintaining its foreign identity.
Meanwhile, the Ghana National Petroleum Corporation (GNPC), is alleged to have intentions of collateralizing future cash flows from Jubilee Oil Holdings Limited (JOHL) for a loan facility worth $500m.
Some $390m of the loan facility according to ACEP and IMANI is meant to be used for exploratory activities by the GNPC.
The remaining $110m is meant to settle the remainder of a $164m loan advanced to the GNPC by the Ministry of Finance and Ministry of Energy.
With just a month to the presentation of the 2023 budget, the Finance Ministry has begun consultations with Civil Society Organisations and other organisations on the budget statement which will be heavily influenced by an agreement with the IMF.
Deputy Minister of Finance, Dr. John Kumah has said although the budget will cover most of the IMF programme initiatives, inputs from stakeholders such as CSOs must also be prioritised.
According to him, the Finance Ministry needed input from all stakeholders on the ongoing global crises which has affected the country’s economy before a financial plan for next year is developed.
