Date: June 1, 2012, 9:22 am


Hon. Samuel Atta Akyea, Member of Parliament (MP) for Akim Abuakwa South, has been cautioned that he risks being in conflict of interest if he proceeds to serve as counsel in a case that Lushann Eternit Energy Limited (LIEC) of Houston, operators of the Saltpond oil fields is threatening to bring against the Public Interest and Accountability Committee (PIAC).

The MP, considered to be among the finest lawyers in the country, has spoken on radio about the intentions of his clients who are incensed by aspects of the PIAC’s first annual report on Petroleum Revenue Management and a consequent publication in the Friday May 18, 2012 edition of the state-owned Ghanaian Times TROLEUM FUND on the matter. Giving that the PIAC report, which covers 2011, will eventually be discussed by Parliament, members of the Civil Society Platform on Oil and Gas (CSPOG) believe the legislator is leading himself into a conflict of interest situation where he would have to choose to defend his commercial interest (as a lawyer) against the public interest (of Ghanaians) when the report is laid before Parliament.

The report by PIAC is to go to Parliament when it gets there, is he going to speak for the company or the country inquires Mohammed Amin Adam, a member and former co-ordinator of the Platform. “He better advise himself, otherwise I see a conflict of interest situation there,” Mr Adam, now Extractive Industries Programme Co-ordinator at the Ibis office in Ghana, said in response to questions from journalists who were at a press conference called in Accra last Thursday. Dr Steve Manteaw, Chairman of the CSPOG, agreed with Mr Adam, stressing that the issue of conflict of interest is quite pervasive in the country, citing the case where MPs and other public officials sit on boards of multinationals as an example.

Meanwhile, the Platform has observed that the threat of legal action by Lushann, trading as Saltpond Offshore Producing Company Limited (SOPCL), “is without basis and must therefore be discontinued.” Reading a prepared text to journalists on behalf of the Platform, Dr Manteaw stated that “it is abundantly clear that Lushann has no basis for dragging PIAC and The Ghanaian Times to court. Their decision must have been made in haste, and it is not too late to reverse it.” The Platform, which has representation on the PIAC, called the press conference to share its perspectives on the intended legal action against the Chairman of the PIAC and The Ghanaian Times.

The group also used the occasion to pledge its unflinching support for the PIAC. PIAC report The PIAC, established under Ghana’s Petroleum Revenue Management, 2011 Act (Act 815) to mainly exercise additional public oversight in the management of petroleum revenues, launched its first report on Thursday May 17 in which it made two references to SOPCL with regards to payment of royalties and surface rentals to the state by the company. First, PIAC said in view of the fact that there were no records to show that the revenues from oil production from the Saltpond fields had been paid into the Ghana Petroleum Holding Fund (PHF), its report focused on crude oil production from the Jubilee field in 2011. Secondly, “Not all payments expected to go into the Ghana Petroleum Holding Fund were reported on. Act 815 covers all oil receipts and Section 6 of Act 815 lists surface rentals explicitly. The surface rentals were paid into Government of Ghana Non-Tax Revenue Account in 2011 and not accounted for in the Petroleum Holding Fund, nor were payments from the Saltpond field included.” These were picked on by The Ghanaian Times, eliciting threat of legal action from SOPCL against the newspaper and PIAC. In a move seen as solidarity with Lushann, the Ministry of Energy reacted by providing some information about payments made by the company.

The Head of Public Relations at the Ministry, Edward Bawa, was reported by another state-owned daily, Daily Graphic as having disclosed that total royalties amounting to $146,482.37 for four liftings in 2011 were paid by Lushan Energy (or SOPCL) into the Government of Ghana non-tax revenue account number 02-230600660-00. Mr Bawa also reportedly told Daily Graphic (Wednesday May 23, 2012) that the company had subsequently been advised to pay all expected government petroleum inflows into the PHF.

 He went on to confirm that the company has since paid an amount of US$104,268.12 in respect of the first quarter of 2012 liftings into the Petroleum Holding Fund. But Dr Manteaw and the Platform have questioned the Ministry of Energy’s locus in this matter and viewed its actions as literally jumping to the defence of Lushann Energy when the Ministry should have defended the PIAC, a statutory body set up under the laws of Ghana. “It is indeed rather curious that it takes the Ministry of Energy, and not Finance and Economic Planning to respond to a finding that indicts the Minister of Finance and Economic Planning,” Dr Manteaw submitted. He argued that Section 16 of the Act 815 requires the Minister of Finance to reconcile quarterly petroleum receipts and expenditures and submit reports to Parliament as well as publish the reports in newspapers. While the Minister has met these requirements, “we cannot remember any reporting by the Minister on crude oil liftings from the Saltpond fields and revenues from the sale of this crude oil,” he told journalists.

Nonetheless, the information provided by Mr Bawa of the Ministry of Energy is a vindication of the PIAC’s position, Dr Manteaw observed, explaining that the PIAC report and subsequent remarks by its chairman, Major (Rtd.) Ablorh Quarcoo, do “not in any way suggests that Lushann Energy has made no payments. It rather suggests that the Petroleum Revenue Management Act which requires all petroleum related revenues to be paid into the Petroleum Holding Fund established by the Act must have been violated.” Besides, “The PIAC report covers 2011. So if for that same period payments from SOPCL were lodged in an account other than the Petroleum Holding Fund, then it is plausible that PIAC, whose mandate is drawn from Act 815 and who will be looking for evidence of payments in the Petroleum Holding Fund, will not find such evidence.”

From the foregoing, the CSPOG demands “an audit and publication of the volumes of production from the Saltpond fields, the revenues generated from the fields, and payments made to the state including surface rental and royalty payments.” The group further demanded full disclosure of all payments to the Ghana National Petroleum Corporation (GNPC) and GNPC’s payments to Government in respect of its participation in the Saltpond project.

“We demand the immediate transfer of all monies held in the Government of Ghana non-tax revenue account number 02-230600660-00 in respect of the Saltpond fields into the Petroleum Holding Fund. “We demand explanation from the Minister of Finance and Economic Planning for his failure to report on the liftings and corresponding receipts and other payments from the operations of SOPCL after the PRML [PRMA] had taken effect. We also want to know why it condoned the continued payment by Lushann into the Ministry’s non-tax revenue account, when it was aware of the new statutory arrangements for such payments.”

and Saltpond fields Production of heavy crude is ongoing at the Saltpond Offshore Field, which is in the Central Region, 65 miles west of Accra under the watch of the SOPCL jointly owned by Lushann and GNPC. Lushann has a 55% share while the GNPC holds 45%. The GNPC has two levels of interest in the Saltpond field: a 15% carried interest by virtue of the petroleum agreement and a 45% share as per the joint venture agreement.

The Government of Ghana, in addition, has a 3% royalty stake in the offshore field as provided in the petroleum agreement. In February 2011, the GNPC announced a pull out but it remains unclear whether a buyer has been secured with the SOPCL being tightlipped. A response provided to this paper during enquiries by Quincy Sintim Aboagye, Chief Executive Officer of SOPCL, was: “Both companies are still working out modalities for this process. As soon as this is concluded, we shall issue a statement covering all the questions.”



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