The Finance minister Ken Ofori Atta has written to the Chief Executive Officer of the Ghana National petroleum Corporation demanding answers to why the commission sold Ghana’s TEN crude oil lower than the lowest on the market.
A letter addressed to the GNPC CEO and sighted by Starrfmonline.com said as a result of the low pricing of the crude by the corporation, the state lost revenue amounting to $9.83millon.
“The ministry has observed with great concern that the achieved price for the Ghana Group’s crude oil has fallen short of expectation, in comparison with Brent oil prices, sources from Bloomberg.
“For the TEN field, GNPC gives the offtaker the option to choose whichever 5-day moving average of prices to use for determining the value of the cargo. This price is determined within 30 days before the Bill of Lading (B/L) date. GNPC`s letters regarding TEN lifting states the price determination thus, “Any 5 consecutive quotations within a period commencing 30 quotations prior to Bill of Lading.
“This has given the offftaker, the latitude to choose lower prices of value TEN crude oil. Our analysis reveals that, in 5 out of 6 cases, TEN crude oils was priced lower than the lowest possible Brent crude oil price based on different 5-days moving average within the 30-days window before the B/L date. All lifting except the 5th , were affected by this low pricing phenomenon. The potential loss, based on the low case scenario, is approximately US$9.83 million.
“If GNPC had insisted on the highest possible price within the pricing window, the state would have gained a total of US$34.12 million more, as shown in Table 1. High case price scenarios yielded price variances between US$0.76/bbl and US$8.80/bbl. A total of US$8.76 million was lost to the state on the 3rd TEN transaction, for example,” the letter addressed to the GNPC boss in July stated.
Reacting to the development, the General Manager for Commercial at GNPC Joseph Dazdie told Starrfmonline.com Thursday September 6, that no money was lost to the state and that an appropriate and detailed response has been sent to the ministry since the letter was received by the corporation.
“We responded to the issue. We clarified the issues and as far as we are concerned we think the ministry is satisfied because they did not come back after our response. I don’t think the state lost any money as was perceived. We gave the explanation to the transactions and every detail was provided to the ministry and so there are no issues at all,” he said.