Government to amend Aker Energy deal in 2022 Budget, says Ofori-Atta

Experts in the petroleum industry have described the GNPC/Aker Energy oil block deal as a good transaction that could be a game-changer for Ghana

Ken Ofori-Atta, Minister for Finance says the government is ready to amend the Aker Energy and AGM Petroleum deal as captured in the 2022 Budget Statement.

He said the terms and conditions of the loan for the acquisition of the shares will be brought to the House for consideration.

Ofori-Atta said he has officially written to Parliament indicating the modifications to the 2022 Budget Statement and Economic Policy of the government.

Speaking to the media on Monday (6 December), Ofori-Atta said, “Relating to the Aker Energy transaction, we shall amend paragraph 829 of the 2022 Budget on the acquisition of a stake from Aker Energy and AGM Petroleum by Ghana National Petroleum Corporation (GNPC), to reflect the resolution of Parliament dated 6th July, 2021.

The minister added that “the terms and conditions of the loan for the acquisition of the shares shall be brought to Parliament for consideration pursuant to article 181 of the Constitution.”

Rational behind acquisition

The government, acting through GNPC, has initiated the process to acquire a 37% stake in Deepwater Tano Cape Three Points and a 70% stake in the South Deepwater Tano block.

The purchase agreement, once finalised, will result in the establishment of a joint operating company between Aker Energy, AGM Petroleum Ghana Ltd and GNPC Explorco.

The planned acquisition, which has received cabinet approval, was laid before Parliament on Monday 2 August 2021 for the input from the House and its approval to mandate the ministers responsible for energy and finance to commence negotiations and agree on a purchase price with Aker Energy and AGM.

Ghana has in place 18 petroleum agreements, many of which have not seen substantial work done as of December 2020. Out of the 18 concessions, three are producing fields and four are discoveries.

The Petroleum Exploration and Production Act 2016 (Act 919), which governs the upstream petroleum industry, gives GNPC exclusive rights to undertake its mandate in all open blocks in the country. It requires all individuals wanting to undertake upstream petroleum operations in Ghana to partner with the corporation.

But the declining number of majors in Ghana and the ongoing energy transition means that if no one else is willing to explore or develop, GNPC may have to develop Ghana’s deepwater resources alone. To do so, GNPC must have operator capabilities and the technology.

GNPC acknowledges that it will need some capacity-building in order to become an operator on its own. The process requires a major oil company willing to travel on this learning route with GNPC. Partnership with Aker Energy and AGM, with proven deepwater capabilities, provides such an opportunity for the national oil company to develop operator capabilities.

GNPC proposes to partner with Aker Energy/AGM to develop the DWT/CTP and SDWT blocks jointly. The two companies, with a wealth of deepwater experience and the requisite technology, are keen to enter into this arrangement with GNPC.

The existing discoveries by Aker Energy and AGM (the Pecan and Nyankom fields) are by far the largest discoveries in Ghana, and the only ones that can be developed as standalone developments. This partnership has the potential to add more than 200,000 barrels of crude oil to Ghana’s current production within the next four to five years.


The Ministry of Energy says the transaction offers significant benefits to Ghana in its quest to develop its petroleum sector. Among other things, GNPC gets to build operator capacity at a critical moment in history to ensure that Ghana’s hydrocarbon resources can be fully developed.

Other expected benefits are that Ghana’s crude oil production will increase by 140,000 to 200,000 barrels per day within three to nine years; and the oil produced may be exported or refined in Ghana for domestic use, thereby reducing imports of refined products, which in turn will conserve foreign exchange. Moreover, a local content agenda can be set effectively by GNPC, and a GNPC with operator capabilities will provide enhanced value creation for Ghana.

GNPC Explorco will eventually recoup the capital expenditure as part of petroleum costs and loans offered to GNPC Explorco for the transaction can be repaid at first oil through securitisation of crude oil entitlements.

In addition, tax expenditures (through exemptions) and initial concessions extended to Aker Energy/AGM will be reclaimed substantially by GoG and assets to be acquired by GNPC Explorco will be done at a discount to current valuation.

Royalties, tax revenues and profits to GNPC Explorco will amount to approximately $6.5 billion in nominal value over 15 years. Substantial foreign exchange inflows will accrue to Ghana, which will contribute to GDP growth and expanded job opportunities.

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