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GNPC Has More Questions To Answer In Sabre Oil Acquisition   
 
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03-May-2013  
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The Ghana Development Centre (GhDC), a development policy and economic think-tank, has said the denial of state-owned Ghana National Petroleum Corporation of any corrupt act in the acquisition of Sabre Oil and Gas Holdings Limited by South Africa’s state-owned PetroSA is not satisfactory.

The Centre, in a statement signed by the Executive Director, James Afedo, said: “The GNPC’s clarification leaves even more questions that are begging for answers”.

The statement said: “For instance the GNPC states in its response released on Tuesday April 30, 2013 that: ‘Sabre Oil and Gas Holdings Limited (Sabre) had stakes in Ghana under two petroleum agreements: Deepwater Tano (DWT) - 3.8250%; and West Cape Three Points (WCTP) - 1.8025%. These translated to a 2.7% interest in the Jubilee Field’”.

“We do not quite understand what the GNPC means by this particular paragraph in its statement”, GhDC noted.

It pointed out that: “The reports from South Africa show that, at the time of the purchase, Sabre Oil and Gas Holdings had about 4.05% shares in Ghana’s Jubilee oil fields, but the GNPC’s response…seems to suggest that Sabre Oil either had only 2.7% shares at the time of the purchase or 5.63% (3.8250% + 1.8025%)”.

“This position seems to contradict with the actual percentage of shares PetroSA had acquired in the Sabre Oil deal”, the think tank contended.

The processes leading to the acquisition of Sabre Oil and Gas Holdings have raised eyebrows in South Africa after the country’s Mail & Guardian newspaper reported on Friday April 26, 2013, that, the “unexplained” increase in the purchase price from $480 million to $500 million was allegedly meant to, corruptly facilitate, the payment of over $20 million in kickback to certain persons involved in the deal.

According to the media report, the subsequent jump in the selling price to $500 million plus contingencies meant there was something suspicious about the deal.

In response, PetroSA vigorously denied the allegations but admitted that there were some deviations from the state-own oil and gas company’s internal procurement processes.

“In making transactions of the type that PetroSA has been involved in, swift decision making and quick turn-around times are critical and can sometimes mean a difference between closing a deal and losing out on an important opportunity. Therefore, in the process of increasing PetroSA’s chances of successfully closing these deals, unfortunately, some deviations from our normal procurement processes have occurred. These were duly declared in the annual financial report of last year”, the company’s Head of Corporate Affairs and Shared Services, Kaizer Nyatsumba stated in a detailed press release published on its website both on April 26, 2013 and April 30, 2013.

There were reports that South Africa’s elite anti-corruption police unit has confirmed opening an investigation into the "deviations" in financial procedures at PetroSA which the newspaper said involved millions of dollars of irregular payments, but declined to give further details.

However, on Monday, PetroSA's chairman Benny Mokaba quit his job with immediate effect, apparently as a result of compromising the company’s procurement processes in favour of the acquisition deals.

PetroSA has indicated that the $500 million Sabre acquisition deal was executed after Ghana’s Energy Minister and the GNPC gave the necessary approvals.

“Regarding tax liability, PetroSA has mitigated all potential tax risks. There is currently no tax exposure related to the acquisition. In terms of the SPA between PetroSA and Sabre Oil and Gas Holdings, the seller has taken all responsibility for all tax-related expenses and transactions costs prior to the effective date of the acquisition,” the company further indicated.

“The negotiating team’s mandate from the PetroSA Board was to negotiate up to a maximum of USD 640 million for the acquisition of Sabre Oil and Gas Holdings Limited, subject to the finalization of a Share Purchase Agreement (SPA) and approvals by all relevant authorities. These authorities were PetroSA’s holding company CEF, the Minister of Energy, the National Treasury, the Reserve Bank, the Ghana National Petroleum Company (GNPC) and Ghana’s Minister of Energy. All these approvals were subsequently obtained, and PetroSA managed all the conditions precedent subject to Board approvals,” the PetroSA statements argued.

In the light of the controversy, the Ghana Development Centre has urged the GNPC to consider a more thorough response to “What exactly was the actual percentage of shares of Sabre Oil and Gas Holdings Ltd at the time of its acquisition?”

It said the GNPC must also come out clearly on whether it was not in a position to acquire the shares of Sabre Oil in order to increase Ghana’s shares in the oil fields which would have increased the West African country’s revenue potential from the resource.

The group has also raised questions about: “Who were the owners or shareholders and management of Sabre Oil and Gas Holdings?”

It said: “According to the deal, Sabre Oil and Gas Holdings Ltd was required to fulfil all tax related expenses as part of the sales agreement” and so enquired if the company honoured all of its tax obligations from the $500 million dollar revenue plus contingencies it realised from the sale of its shares” and “If not why?”

The Centre is also demanding answers to “how much, in total, the company paid to the state in taxes”.

PetroSA has admitted that its Chairman and management, at the time the deal was realized, deviated from the company’s procurement processes in order to facilitate the deal. The Chairman has subsequently resigned from his job as a result of adverse findings against him in this regard.
 
 
Source: Radioxyzonline.com
 
 

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