Corruption At Petroleum Commission

The often criticised Petroleum Commission was back under the spotlight yesterday, as sources within Tullow Oil, operator of Ghana’s only producing fields, revealed that management of the Commission were forcing them to sole source a $350m drilling contract to a company associated with the previous government.

A letter received from the head of the Commission and addressed to the CEO of Tullow, Charles Darko, ordered the company to cease its tender process for the rig contract.

The PC noted that a drilling company owned in part by Rigworld was the only drilling company compliant with the Local Content Law and therefore should be awarded the contract without delay.

In the industry, Rigworld is known to have powerful people in the Commission, with worrying interest in the entity. Rigworld, under the previous government, was known as the favoured Ghanaian company by the Commission. With the same head of the Commission still in office, it appears not much has changed.

But, there is stronger resistance now from some of the big oil companies who were always leaned upon to favour some special companies.

Tullow’s management, recognising the costs to the government of Ghana, has made private submissions to the Petroleum Commission's CEO, raising concerns regarding the time taken by the Commission to approve applications for permits submitted by other drilling companies and the impact this has on their ability to deliver tenders and achieve the lowest prices.

The beneficiary of the PC's intervention is Maersk Drilling, a subsidiary of Maersk.

Its partner Rigworld has been frequently cited under the previous government as a major recipient of PC favour. The company has awarded a virtual monopoly of the rights to supply crew members to offshore operators. This was after being criticised for its poor treatment of offshore Ghanaians workers on the Jubilee FPSO.

The JV between Maersk and Rigworld was fast tracked, in similar fashion, to the award of the drilling contract associated with the ENI operated Sankofa field. Again, as with the TEN tender, the Petroleum Commission leveraged its influence to ensure that the process was in effect sole sourced, with potential competitors’ time barred on the basis of Local Content, an area where the PC has complete discretion.

The Petroleum Commission and its CEO, Theophilus Ahwireng, have come under heavy criticism from operators and service providers alike, both ingenious and foreign. All parties argue that the PC is too focused on influencing tenders and pays little attention to its other functions, namely acting as an effective regulator of the industry.

Accusations of bias and manipulation of contracts have also been thrown at the award of the ENI FPSO to Yinson, a company whose local partner oil marine services has also partnered with PGS, a Norwegian seismic provider. PGS and OMS have, in a competitive global market, been awarded all three of the major seismic contracts awarded in Ghana in 2016/17. In the two-year period prior to December 2016, OMS related companies were awarded Ghanaian contracts in excess of $1.5bn.

Mr Ahwireng, a GNPC stalwart, recognised as an accomplished technocrat, is the only survivor of the governments cull of Energy sector related public officials, appointed by the previous administration. This current scandal, if confirmed, will likely be the final straw for a president and minister who have expressed and shown zero tolerance for accusations of corruption.

The New Statesman