The Minister of Energy, Dr. Joe Oteng-Adjei has virtually abrogated a Petroleum Agreement (PA) amongst the Government of Ghana (GoG), Ghana National Petroleum Corporation (GNPC) and AKER ASA and Chemu Power Company Limited in respect of the South Deep Water Tano Contract Area. The Minister�s action was contained in a letter dated December 30, 2009 which was addressed to the President of AKER ASA Group. (See page 2 for the full text of the Minister�s letter).
The Petroleum Agreement (PA) under reference was unanimously ratified by Ghana�s Parliament at its 20th sitting on November 5, 2008 after it (PA) had had the appropriate approvals of the Ministry of Energy, Cabinet and the GNPC Management and Board as required by the Laws of the Land. The text of the Resolution was subsequently formally forwarded to the Attorney General for appropriate action by the Clerk of Parliament in an official correspondence dated November 13, 2008.
Records available to The New Crusading GUIDE indicate that since the ratification of the Petroleum Agreement (PA), AKER ASA which is a Norwegian company and a big player in the global oil industry, and its Ghanaian subsidiary, AKER GHANA LTD, have been engaged in the most extensive 3D seismic data acquisition programme ever to be undertaken in the history of oil exploration in Ghana. Millions of dollars have been spent on that endeavour. The companies have also duly discharged all their tax obligations to the State of Ghana.
However, upon the assumption of Office by the Mills Administration, some leading Government and Party Officials including Dr. Joe Oteng-Adjei began to raise �red flags� about the processes leading to the consummation of the Petroleum Agreement (PA), especially the connection between AKER ASA and its local (Ghanaian) partner, CHEMU POWER COMPANY LIMITED. DR. OTENG-ADJEI AND HIS COLLEAGUES ALSO CONTENDED THAT THERE WERE SOME �LEGAL DEFECTS� WITH THE PA BECAUSE SECTION 23(15) OF THE PETROLEUM (EXPLORATION AND PRODUCTION) LAW 1984 (PNDC L84) CLEARLY REQUIRED THAT A GHANAIAN REGISTERED COMPANY OUGHT TO HAVE BEEN THE SIGNATORY TO THE PA, AND NOT AKER ASA.
The Norwegians, confronted by this legal hurdle raised by Dr. Oteng-Adjei and company, initially proposed to rectify the situation by making both AKER ASA and AKER GHANA co-parties to the Petroleum Agreement (PA); a solution which they believed to be �natural and most efficient� until otherwise decided by the Parties.
The Norwegians, however, indicated their readiness to take on board any reasonable preferences of GNPC and the Minister in confirming AKER GHANA�s status as the performing party to the Petroleum Agreement (PA).
There is evidence to show that the GNPC wrote to Dr. Oteng-Adjei on February 24, 2009 to explain the situation AND RECOMMENDED THAT THE SOLUTION TO THAT �LEGAL DEFECT� LAID IN AKER ASA TRANSFERRING AND/OR ASSIGNING THE PA TO AKER GHANA LIMITED, THE ENTITY THAT WOULD BE OPERATING THE PA.
�THIS ASSIGNMENT IS PERMITTED UNDER THE PROVISIONS OF ARTICLE 25 OF THE PETROLEUM AGREEMENT�, the GNPC letter signed by the then Managing Director, M.O. Boateng advised the Minister.
�Indeed Aker Ghana Limited has commenced work under the Petroleum Agreement and currently has a seismic vessel on location in its contract area to acquire approximately 2,600 square kilometers of 3D seismic data which exceeds the 1,500 square kilometers negotiated in the Petroleum Agreement�, added Mr. Boateng.
He continued: �AKER ASA HAS BEEN INSTRUCTED TO EFFECT THIS ASSIGNMENT AND AKER ASA WILL BE SUBMITTING THE DEED OF ASSIGNMENT TO GNPC AND THE HON. MINISTER FOR ENERGY FOR APPROVAL AS REQUIRED UNDER THE PETROLEUM AGREEMENT�.
In reaction to this development, AKER ASA and AKER GHANA wrote to the GNPC on February 26, 2009, saying that in view of their understanding that the GNPC preferred AKER Ghana to be confirmed a party to the Petroleum Agreement through an assignment �THEREFORE WE HEREBY CONFIRM THAT WE AGREE TO FORMALLY ASSIGN AKER ASA�S POSITION AS A PARTY UNDER THE PETROLEUM AGREEMENT TO AKER GHANA, AS INSTRUCTED BY GNPC�.
However, the Ministry of Energy in a letter dated April 8, 2009 and signed for the Minister by Dr. M. Apiageyi Gyamfi, Director for Petroleum, informed the GNPC Boss that �the matter has been put on hold until all issues concerning the process of awarding the block to Aker ASA and Chemu Power Company Limited are addressed�.
The Minister himself in a letter dated May 12, 2009, and addressed to the Ghana Office of the Aker ASA, requested the latter to �MAKE AVAILABLE AS A MATTER OF URGENCY ALL DOCUMENTATION IN RESPECT OF THE RELATIONSHIP ESTABLISHED BETWEEN AKER ASA AND THE GHANAIAN COMPANY, CHEMU POWER WHICH IS A PARTY TO THE AGREEMENT�.
�SUCH DOCUMENTATION INCLUDES CORRESPONDENCES LEADING TO THE JOINT SUBMISSION OF THE APPLICATION FOR THE ACREAGE AS WELL AS AGREEMENTS ON THE RELATIONSHIP THAT WAS ESTABLISHED BETWEEN THE TWO COMPANIES. PLEASE TREAT AS URGENT�, Dr. Oteng advised entreated.
The Norwegians subsequently complied with the Minister�s request and in a letter dated May 19, 2009, provided a chronology of their activities in Ghana and their relationship with Chemu Power, relative to the processes towards the signing of the Petroleum Agreement (PA).
In spite of all that and contrary to the advice given by the GNPC and other legal authorities, both local and international, Dr. Oteng-Adjei wrote to the Norwegians on December 30, 2009, indicating that after having given extensive consideration to the Petroleum Agreement (PA), their company (Aker ASA) �purported to enter into with the Government of Ghana (GoG) and Chemu Power�, the Ministry of Energy was unable to give its consent to the assignment request put in by the Norwegians.
Hear him: �As you are aware the Petroleum (Exploration and Production) Law clearly requires a Ghanaian-registered company to be the signatory to the Petroleum Agreement. THE ASSIGNMENT YOU HAVE REQUESTED IS LEGALLY IMPOSSIBLE IN VIEW OF THE UNDERLING FAILURE OF COMPLACENCE WITH THE LAW�.
The Minister, apparently motivated by some allegations peddled by Anadarko and its allies in January, 2009; allegations which had been positively debunked by GNPC, indicated to the Norwegians that it had been established that, �based on an application that preceded yours, negotiations had been at an advanced stage for a Petroleum Agreement with another consortium of companies and the negotiations were not concluded simply because the consortium would not accede to a demand to include a particular �local partner��.
�In the interest of transparency and fairness, therefore, I am allowing that consortium to be given the chance to conclude the negotiations they had begun�, he underscored.
The Minister then intimated that �considering that you had undertaken some data acquisition, I am, by copy of this letter, asking GNPC, as the owner of such data, to reimburse you the costs of the data�.
�We look forward to future opportunities to have you participate in petroleum exploration activities in Ghana�, concluded Dr. Oteng-Adjei.
MEANWHILE, UNCONFIRMED INFORMATION REACHING OUR EDITORIAL DESK, INDICATES THAT THE DECISION OF THE ENERGY MINISTER COULD END UP IN COSTLY LITIGATION/INTERNATIONAL ARBITRATION WHICH COULD HAVE DIRE CONSEQUENCES FOR THE INVESTMENT CLIMATE IN GHANA�S OIL INDUSTRY.
Stay tuned�
"Letter To The M.D Of GNPC"
FOR THE RECORDS
�FROM THE AKER ASA/CHEMU POWER FILE (1)
LEGAL OPINION EXPRESSED BY ANKAMAH, GUNN & CO. (SOLICITORS & ATTORNEYS AT LAW) ON THE AKER ASA/AKER GHANA SAGA
THE MANAGING
DIRECTOR
GHANA NATIONAL
PETROLEUM
CORPORATION
PMB
TEMA
Dear Sir,
*FACTS
Aker ASA, a Norwegian company and Chemu Power Company Ltd, a Ghanaian company negotiated for and entered into a Petroleum Agreement with the Government of Ghana represented by the Ministry of Energy and the Ghana National Petroleum Corporation on 24th October, 2008 with regards to Aker ASA�s interest consisting of approximately 2,583 square kilometers of acreage in the Deep Water Cape Three Points Block. The Petroleum Agreement was preceded by a Memorandum of Understanding dated 15th October, 2008 involving the same parties which contained the terms of the Agreement reached at the negotiations. The Parliament of Ghana ratified the Petroleum Agreement on 5th November, 2008.
After the signing of the Agreement and before ratification by Parliament, Aker ASA incorporated a company known as Aker Ghana Ltd with the object of carrying out petroleum operations in respect of the Petroleum Agreement. Aker ASA owns 100% shares in Aker Ghana Ltd. The Certificate of Incorporation and the Certificate to Commence Business of Aker Ghana Ltd were issued on 29th and 30th October, 2008 respectively.
Chemu Power Company Ltd was incorporated in Ghana on 7th February, 2008 and issued with its Certification to Commence Business on 8th February, 2008.
*ISSUE
*THE IMPLICATION OF FAILING TO EXPRESSLY LIST AKER GHANA LTD AS A PARTY TO THE SOUTH DEEP WATER TANO PETROLEUM AGREEMENT:
*DOCUMENTS AND AUTHORITIES CONSIDERED
The documents authorities referred to and studied were:
* MOU dated 15t October
2008
* Petroleum Agreement dated
24th October, 2008
* Petroleum (Exploration and
Production) Law, 1984
PNDCL 84
* The Companies Code 1963 (Act 179)
* General Legal Principles of
Corporation Law
*OPINION
Section 23 (15) of the Petroleum (Exploration and Production) Law, 1984 PNDCL 84 provides for the incorporation of a company in Ghana under the provisions of the Companies Code, 1963 (Act 179) by a contractor or subcontractor which is not an incorporated company in Ghana for the company which is incorporated in Ghana to be authorized to carry out solely petroleum operations in respect of which a Petroleum Agreement or Petroleum Sub-Contract has been entered into and such company shall be a signatory to any Petroleum Agreement.
The law in clear and simple terms states ��shall register an incorporated company in Ghana�� In drafting of Contract or Agreements, the usage of the word �shall� places a mandate or an obligation on the parties to the Contract or Agreement. That mandate or obligation was fulfilled by the incorporation of Aker Ghana Ltd. The Drafters of PNDCL 84 foresaw a situation such as the one under consideration, hence the usage of the important word �shall�.
Furthermore, the intention of the parties which was expressed in a Memorandum of Understanding dated 15th October, 2008 was to agree to certain provisions which were to be part of a Petroleum Agreement which was eventually signed and given legal backing by its ratification by Parliament. The legal question to be asked is �Could a procedure lapse that could be cured or resolved be a clog or impediment to a proper performance of a contract?�
The procedure lapse of failings to list AKER Ghana Ltd as a party to the Petroleum Agreement was cured by the incorporation of AKER Ghana Ltd as required under PNDCL 84 before the ratification. The ratification seals and in simple language completes and gives legal validity to the Petroleum Agreement. At the time of ratification Aker Ghana Ltd had been registered and was in existence as legal entity and yet without questioning the status of Aker ASA Parliament went ahead and ratified the Agreement. Why was the issue under consideration not raised at the ratification stage? The onus was on the Government of Ghana to have addressed the issue and ensure that it was rectified.
In addition all the requirements of a basic contract have been satisfied and due diligence conducted has revealed that Aker Ghana Ltd in collaboration with its principal shareholder AKER ASA has paid all monetary considerations and are on site working. Latest due diligence conducted has revealed that Aker Ghana Ltd and Chemu Power Company Ltd have done the single largest 3D seismic shooting on the block allocated to them which is over 2,500 square kilometers and have spent several millions of dollars to that effect.
Furthermore it must be pointed out that it was incumbent on Ghana National Petroleum Corporation and the Ministry of Energy as representatives of government to have timeously informed Aker ASA of the necessity to incorporate a company in Ghana with the object of carrying out the operations specified under the Petroleum Agreement. Having delayed in informing Aker ASA, the Government of Ghana cannot turn around and blame Aker ASA for its failure to make Aker Ghana Ltd a party to the Petroleum Agreement for the sake of the equitable maxim. �He who comes to equity must come with clean hands�. It would not paint a good picture to the international investment community.
*CONCLUSION
After careful review and study of the documents and conducting research in corporate and contract law including legal principles and maxims in equity, OUR CONCLUSION IS THAT EVEN THOUGH AKER GHANA LTD IS NOT A SIGNATORY TO THE PETROLEUM AGREEMENT, SECTION 25 OF THE AGREEMENT PERMITS THE TRANSFER OR ASSIGNMENT OF THE AGREEMENT TO AKER GHANA LTD. WHEN THAT IS DONE AKER GHANA LTD WOULD STEP INTO THE SHOES OF AKER ASA AS IF AKER GHANA LTD DID IN FACT SIGN THE PETROLEUM AGREEMENT AND BY DOING SO WOULD TAKE OVER ALL ITS RIGHTS, OBLIGATIONS AND LIABILITIES UNDER THE AGREEMENT.
Yours faithfully
ANKAMAH GUNN & CO
14th April, 2009
*EDITOR�s NOTE: Please stay tuned for more of such documents on the above subject-matter.
Source: Special Investigations Team (SIT), New Crusading Guide/Peacefmonline.com/Ghana
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