Government initiates Energy Sector Recovery programme

Accra, Feb. 14, GNA – Government has
commenced an initiative called the Energy Sector Recovery (ESR) programme to
ensure all debts in the sector were paid within the next five years.

Dr Mohammed Adam Amin, a Deputy Minister of
Energy, said this in reaction to the press conference by the National
Democratic Congress (NDC) on the state of the energy sector.

He explained that the Government had managed
the sector better and with the ESR the state would accrue its debts for a solid
and financially healthy energy sector.

In January 2017, when the NDC handed over
power, the Bulk Oil Storage and Transport Company Limited (BOST) owed $624 million
to suppliers, BDCs and related parties in respect of crude oil imports for
processing at Tema Oil Refinery and refined products, which got lost from BOST
tanks, Dr Amin said.

“But as at February 2020, the outstanding
amount to settle to clear the books now stands at $57 million,” he said.

Dr Amin said an audit on BOST’s accounts
showed that between 2013 to 2016, there was a significant rise in the net
losses by the company with the highest net loss of GH¢569 million recorded in

He noted that the 2018 management account
showed a 70 per cent reduction in losses from the previous year and a further
41 per cent reduction in the loss level.

“This steady decline in the loss level of
the company, from 2017 to 2019, shows that during the year 2020, the company
will likely make a profit. BOST under the NPP Government is in a better
position,” he said.

Dr Amin said BOST continued to pursue its
objectives including holding strategic reserves of petroleum products and that other
private depots also held sufficient stocks, which together would provide enough
buffer for product supply. 

He said the country had a reserve of about
three weeks of Petrol, four weeks of diesel, eight weeks of Aviation fuel and a
week of Liquefied Petroleum Gas.

On the issue of the AKER/AGM Agreement, the
Minister said the Agreement and all its contents were scrutinized and approved
by Parliament, which included the Minority.

“The allegation, therefore, betrays the
NDC’s understanding of transparency. The NDC has as yet not mentioned any
corrupt act involving any official of the Government in the Aker contract. We
challenge them to do so,” he said.

Touching on the incentives provided to Aker
Energy, Dr Amin said: “We should understand that project economics can be
enhanced with incentives when market conditions adversely affect the prospects
of profitability and the NDC knows this very well.”

“The decision to incentivize the project was
further informed by the imminent threat of declining crude oil production and
its potential effect on our economy”. 

He noted that the oil production profile of
Ghana showed that the contributions of the three producing fields would peak
and reach plateau levels of approximately 230,000 bbls per day this year up to
2023 after which it would begin to decline if new fields were not brought

Dr Amin said the Government had proven to be
better managers of the oil and gas sector by renegotiated the domestic gas
price from $8.8 per mmBtu to $6.08 per mmBtu that would have been lower if
Sankofa gas price was less expensive.

He said the Government had recently launched
a new strategy for the upstream oil and gas sector anchored on aggressive
exploration and the attraction of companies with a track record.

“This has become necessary because the value
of oil may decline in the future as a result of climate change and declining
funding for fossil fuel projects,” Dr Amin said.

“It is, therefore, imperative that our
strategy to provide incentive is aimed at exploiting as many potential reserves
as we find to maximize benefits to the nation while oil is still