Government has commenced an initiative called the Energy Sector Recovery (ESR) programme to ensure all debts in the sector are 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 recover 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 2016.
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 online.
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 valuable.”
GNA