GNPC to finalize $400 million ENI loan

Ghana’s state-run oil giant will soon be in the international market to finalize a transaction covering a $400 million dollar loan that will support new capital investments, according Alex Mould, chief executive of the Ghana National Petroleum Corporation (GNPC).

GNPC’s intention to seek foreign cash for its operations without first obtaining Parliamentary approval has triggered controversy and a court action to stop the deal.

Mould said the team at GNPC has no intention of seeking Parliamentary approval, especially as a court in Accra threw out an injunction application filed by some minority members of parliament (MPs) against the transaction early this year.

It will be recalled that in January this year, the commercial division of the Accra Fast Track High court dismissed an injunction application filed before it by three opposition lawmakers, praying the court to stop the GNPC from contracting a $700 million dollar international loan without Parliamentary approval.

The Plaintiffs, Mathew Opoku Prempeh, Anthony Akoto Osei and Samuel Atta Akyea, had prayed the court to order the GNPC to suspend any transactions covering the intended loan until the substantive case is decided. However, the presiding Judge, Justice Mrs. A Bartels-Kodwo, did not accept their plea and dismissed the application.

The MPs have since served notice they will appeal the decision but it is unclear if they have filed any papers at the Appeals Court.

Alex Mould argued that in the ENI transaction, there was a portion that the GNPC felt was not risky and as such should not attract the rate of return similar to the rate of return that is paid to investors that do risky businesses.

“If you are going to explore for oil, that is very risky, if you going to build a pipeline and a receiving facility to connect the gas that is being produced to our existing pipeline, that is not risky and GNPC believes that we should be able to fund such things,” he added.

Mould further noted that “the international market has proven that the GNPC is capable of doing this without having government support this transaction. As a stand-alone project financing, GNPC is able to do this”.

The GNPC Chief Executive said because the court dismissed the injunction application filed against them, “we are going ahead and in a few weeks we should complete that transaction. With the oil prices where they are we should be looking at something between 300 and 400 million, which is exactly what we need for that project.”