It has emerged that the GNPC, the Ghana Standard Board and Ghana Revenue Authority (GRA) who are supposed to be the watch dog to ensure productive operations, proficient measurement and pricing of the petroleum have all deliberately or negligently breached Article-11 of the oil contract agreement signed in 2004 between GNPC on behalf of Ghana Government and Kosmos (the parent contractor), so as to serve the parochial interest of the few.
This became evident when they allowed the removal of the Ultrasonic Export Flow Meters onboard the FPSO Kwame Nkrumah vessel in April/May 2011 to avoid measurement of the amount of oil exported. This has paved way some unscrupulous government officials to use false accounting, resulting to over 4.5 million barrels of crude oil missing from the Ghana oil field between January and October 2011, yet the government of Ghana has not seen the importance of setting up investigation into such a veritable report released.
This colossal breach of the oil contract by GNPC and the Ministry of Energy, the two regulators in the industry has caused the use of a system called ullaging, in which a dip stick or ruler is used to manually calculate the amount of oil meant for export after the flow meters were deliberately removed from the FPSO vessel. And according the reports, this has been creating a serious confusion and misunderstanding between the Ghana Revenue Authority officials, the customs officers and the Representatives of the buyers leading to a situation whereby the GRA and customs officers were not allowed to accompany the tankers to take records of the quantity of oil being exported even in light of the export flow meters reported not working.
The representatives of the buyers were reported to have been furnishing the revenue agencies in Ghana instead with figures on the amount of oil exported - situation experts say it’s tantamount to serious corruption and unacceptable.
Reader can recall that the NPP UK & Ireland have consistently drawn the attention of the GNPC and the government to this colossal breach of the very contract signed between Ghana government and Kosmos as far as the oil exportations without the accepted measuring system is concerned, but the NDC government have had dead ears to these legitimate calls because of their intention to put their grubby hands into the till of Ghanaians and take the oil money through corruption..
Right now, out of the four export flow meters removed in April for calibration, only two have been replaced with new meters in August, meaning the rest of the outlets are still being measured with the dip sticks.
NPP UK & Ireland finds it unfathomable that such threatening indiscretion and lapses have been allowed to happen with management of Ghana crude oil. In fact, we believe such gross transgression can never be tolerated in any disciplined and competent administration except.
Now, quoting part of Article-11 with the head line “MEASUREMENT AND PRICING OF PETROLEUM” of the 133 pages contract agreement signed between Ghana government and Kosmos in 2004; it is stipulated categorically that under no reason shall oil be allowed be exported without the agreed means of measuring.
In Article 11.2; It’s stated that - GNPC or its authorized agent shall have the right:
a) To be present at and to observe such measurement of Crude Oil; and
b) To examine and test whatever appliances are used by Contractor.
In Article 11.4; It’s stated that- If, upon the examination or testing of appliances provided for in Article 11.2, any such appliances shall be discovered to be defective:
a) Contractor shall take immediate steps to repair or replace such appliance; and
b) Subject to the establishment of the contrary, such error shall be deemed to have existed for three (3) months or since the date of the last examination and testing, whichever occurred more recently.
In Article 11.5; It’s stated that - In the event that Contractor desires to adjust, repair or replace any measuring appliance, it shall give GNPC reasonable notice to enable GNPC or its authorized agent to be present.
In Article 11.6; It’s stated - Contractor shall keep full and accurate accounts concerning all Petroleum measured as aforesaid and provide GNPC with copies thereof on a monthly basis, not later than ten (10) days after the end of each month.
In all, the operators at the oil field should have had no right to remove the any of the meters without replacing them with immediate effect but this has been allowed to happen under the purview of President Mills and his energy experts. These meters have been removed for more than six months now without replacement. The question is why?
The article 11.6 in the contract is an internationally recognised Planned Preventive Maintenance system (PPM) used in many processing and engineering maintenance firms with the essence of prompting the technical team of any developing faults in a system before a catastrophic failure occur. The unfortunate thing is that the GNPC have flouted with impunity, this part of the contract from day one since the start of production. The contractors at the Jubilee Field have failed to provide GNPC with copies of full and accurate accounts concerning all petroleum measured and metering accuracy on monthly basis.
To make matters worse, Tullow Oil, one of the partners in the Jubilee fields, is also said to have disconnected a monitoring device installed by the Ghana Revenue Authority (GRA) to independently monitor crude oil being exported. Tullow claims the device was interfering with their operations, hence their decision to disconnect it.
With the passage of the Petroleum Commission Act by Parliament on Wednesday 1st June 2011, in accordance with article 269 of the 1992 Constitution, everyone assumed that it had paved way for an establishment of Petroleum Commission to oversee the regulation and management of the petroleum products and co-ordination of the policies in relation to resources but up to today not a single person has been called to form such commission.
Today, we can only take joy in the support from the Civil Society Platform on Oil and Gas who have also expressed similar concerns with a report on Ghanaweb -08/12/11 with head line “CSO’s raise red flag over FPSO metering system,” saying no independent institution in the country can verify the calibrations of the newly installed flow meter on the FPSO Kwame Nkrumah on the Jubilee Oil Field.
We believe that every rationale Ghanaian would worried if up to today the top officials of the Ghana Standard Board (GSB) could be quoted by saying the Standard Board do not have the requisite training to detect whether the metering system onboard the SPFO not functioning accurately. “It is not that we have not verified the calibrations on the flow meters alone, but also on the production line meters, and that is a serious concern because when the calibrations have not been verified on the flow meters on the production line meters, it means that you cannot tell whether the meters have been tempered with or not. This is an issue the Ghana Standard Board has to deal with but unfortunately they don’t have the logistical capacity or the expertise to do it,” he said.
NPP UK & Ireland believes that our mother land deserves far better than this abysmal management from NDC government.
Source: Hayford Atta Krufi Chairman – NPP UK & Ireland Research credit -Peter Antwi Boasiako NPP UK Communications and Research Team
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