Group Frowns on PetroSA Acquisition

Posted on: www.dailyguideghana.com

Mohammed Amin Anta Adam

By William Yaw Owusu

Accra, Wednesday September 26, 2012.

The Civil Society Group on Oil and Gas has raised concerns over the bidding processes that enabled South Africa’s national oil company, PetroSA to acquire Sabre Oil’s stake in the Jubilee Oilfield.

PetroSA recently announced the takeover, which meant that South African company now owns interest in three assets: the producing Jubilee Field, the Deepwater Tano Block and the West Cape Three Points Block which represent about 4.05 percent stake and estimated at about $365 million.

According to media reports, Tullow Oil was said to have showed interest in buying the stake after Kosmos abandoned earlier plans of acquiring the Deepwater Tano Block for an estimated $365 million dollars but it was unclear how much the South Africa national oil firm paid to acquire the whole stake.

There have been intense debates over how to finance the sector as well as the capacity of Ghanaian entrepreneurs to compete effectively in the sector with foreign firms.

Civil society groups have raised issues, saying the process was not competitive enough to allow any Ghanaian entrepreneurs to attempt to acquire the stake.

They said given the right opportunities, Ghanaian firms would be able to address challenges of the sector.

Coordinator of the group, Mohammed Amin Anta Adam told Citi FM that “the financial market has been so globalized it doesn’t really matter where you raise your capital, what is important is the ownership of the Ghanaian community.”

He added that “Even Tullow and Kosmos both went for loans from the IFC of the World Bank; I think Ghanaian entrepreneurs also have that capacity to raise such funds.”

He said, “You recall the acquisition of E.O Group by Tullow, this was not floated openly for other people to express interest but was something more like an internal arrangement which I think was unfortunate especially because the interest held by a Ghanaian was taken over by Tullow Oil.”

According to Mr. Adam, apart from the Ghana National Petroleum Corporation (GNPC), the only Ghanaian interest left among the Jubilee Partners is Sabre and therefore PetroSA’s acquisition meant there would be no meaningful Ghanaian participation in the entire operation of the Jubilee Oilfield.

He said although it was not out of place to encourage foreign acquisition in Ghana’s oil and gas industry, the authorities should make sure that the rules were followed strictly for Ghana to gain maximum benefits.

“Foreign acquisition of interest in Ghana’s oil and gas industry is not bad because Ghana is still looking for foreign investments up stream to get the necessary capital and technology to be able to get more oil so from that perspective it should be encouraged,” he said.