Painstaking perusal of records has revealed that the previous National Democratic Congress (NDC) government had run down the various stated-owned oil companies, leaving Ghana’s oil and gas industry in a complete mess.
Officials of the NDC administration led by former President John Dramani Mahama managed the oil sector with reckless abandon as they engaged in questionable agreements that significantly subjected the country to four-long-years of dumsor and also left huge debts to the current government to settle.
Ghana National Petroleum Corporation (GNPC), Tema Oil Refinery (TOR) and Bulk Oil Storage and Transportation (BOST) were major casualties of the gross mismanagement and were all saddled with mounting debts for the appointees of the New Patriotic Party (NPP) administration to clear.
For instance, palpable negligence of officials under the NDC government in 2013, led to BOST losing over GH¢11 million to Springfield Energy.
This was because BOST could not just protect products Springfield stored in its tanks.
Again, the NPP majority in Parliament had indicated there was evidence to show how the Kingsley Kwame Awuah-Darko-led management of BOST transferred over GH¢40 million of oil cash to the presidency under President Mahama in a very bizarre manner.
The former BOST MD was also being chased by the Economic and Organised Crime Office (EOCO) over some alleged payments and withdrawals from the government’s account.
The account in question was the Chief of Staff’s ‘Sundry Account’ which the BOST boss was said to have regularly lodged money into and reportedly cashed by the Office of the Chief of Staff during the Mahama administration.
Regrettably, as the new administration is frontally clearing the mess bequeathed to it in the oil industry, NDC surrogates are busily churning out stories against the current managers of the state-owned oil companies ostensibly to cover up the dubious deals by the previous government.
Managing Directors of GNPC and BOST, Dr. K. K. Sarpong and George Mensah Okley respectively are key targets of NDC hawks even though these two managers are working hard to restore decency in their outfits.
Dr. Sarpong was recently accused of dealing with Russian oil firm LITASCO because it reportedly had some links with the current Government although the company had operations with the NDC administration.
Like all the major oil companies, the Russian oil giant was trading in Ghana long before the current administration took office and has no links to anyone in the NPP Government.
However, the truth behind the LITASCO/GNPC deals is that the Dr. K. K. Sarpong and the GNPC Board have saved Ghana some money and prevented crisis for the new NPP Administration whilst securing electricity generation and avoiding Dumsor.
$279m Litasco guarantee to BOST, ECG
Currently, Litasco has provided $279 million guarantee, comprising $100 million for BOST and $175 million for Karpowership to ensure stable power supply as well as clear the debt of BOST.
Averting a default by BOST and its adverse consequences, Ghana’s credit rating in the international financial markets was certainly an advantage.
LITASCO is the trading arm of Lukoil which, in International Oil markets, is a Russian oil giant producing 3 million barrels a day with nine refineries globally.
It is among top 6 oil trading firms in the world and a well-regarded player in International Markets operating out of Geneva.
Records indicate that LITASCO has been trading in Ghana for a few years now, intensifying its position during the Mahama administration.
It entered into deals to supply Ghana with crude oil and refined products as well as offering a $20m prepayment deal for naphtha from TOR during the previous government.
Information available to this paper showed that LITASCO supplied gasoline in June 2016, the supply of crude in November 2016 and the advance payment of $20m to BOST/TOR, then under single management of Kingsley Kwame Awuah-Darko.
At the time of the NPP government taking office, LITASCO was owed more than $64 million due to deals contracted by Mr. Awuah-Darko.
The company is still owed $6 million of that money.
Just at the beginning of the Akufo-Addo administration and even before the Energy Minister was sworn in, Trafigura, one of the world’s largest oil commodity traders, and a regular supplier of refined products to BOST/TOR in the Mahama years, threatened to injure Ghana’s reputation in the International Credit markets.
This was because the company was owed almost $100 million outstanding payments as a result of products it supplied to BOST/TOR again managed by the same Mr. Awuah-Darko.