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Corrupt business deals cut by the John Mahama government have left Ghana with an unmanageable liability of $10bn based on a gas price that is one of the highest in the world.

Corrupt business deals cut by the John Mahama government have left Ghana with an unmanageable liability of $10bn based on a gas price that is one of the highest in the world.


The Sankofa gas field, operated by the Italian multinational ENI, will commence operations in September this year, producing 170 million standard cubic feet per day (mmscf/d) of natural gas. It will be Ghana’s first non-associated gas field ‒ in other words, the first to produce standalone gas, as opposed to gas as a by-product of oil.

Unlike oil, with its oft-cited “curse”, gas is assumed to be a driver of growth and development. But not in the case of Sankofa. Such is the corruption surrounding the price agreed for delivery to Ghana’s generation hub at Tema that, at almost $13 for every million British thermal units (mmbtu), it will be among the highest in the world.

Gas from Sankofa will cost Ghanaians 45 per cent more than that produced through the Tema liquefied natural gas project. It will be 70 per cent more expensive than gas from the Jubilee field and 20 per cent more costly than the crude oil it was designed to replace. Some experts describe gas from fields in the Offshore Cape Three Points block delivered to Tema as the most expensive in the world.




John Mahama’s NDC government was notorious for delivering bad contracts in the energy sector. The $8bn West Africa Gas Ltd liquefied natural gas (LNG) deal was corrupt to the point of putrefaction. The $510m AMERI power plant contract reeked, and so did the $1bn Karpower barge deal.

The mechanisms for plundering the coffers were identical every time there was a deal on the table. Whip up a sense of doom by alleging that there is an “emergency” which requires immediate action. Use this as a smokescreen for closed-door negotiations, giving ministers room to sign deals which removed the experts from state institutions, in case they tried to protect Ghana’s interests. And then, in secret, “cook” deals with dubious foreign partners who are happy to share the benefits.

Under the West Africa Gas Ltd LNG project, gas was priced at $12/mmbtu, the NDC’s then Energy Minister providing guarantees and loans to commercial partners with no capital or track record. With AMERI, the trick was to generate units priced at 200 per cent of the usual value. In each case, the government signed long-term contracts designed to lock in value long after the NDC had left office, ensuring a sustained flow of cash.

In the case of Sankofa, which presented the opportunity to secure lucrative oil-service contracts, the Mahama-led government went all out to secure big bucks far into the future.

A source at the Ghana National Petroleum Corporation recalled how, with price negotiations long stuck at $6/mmbtu, ENI began complaining about delays in awarding service contracts. In response, the chairman of the GNPC board, Ato Ahwoi, together with GNPC’s then chief executive officer, Alex Mould – brother of the former Attorney General Betty Mould, of Alfred Agbesi Woyome infamy ‒ arranged a day of closed-door negotiations between senior management at Peduase Lodge in the Eastern Region, cutting out the negotiating team. A day later they announced an agreement to purchase the world’s most expensive gas.


                                                                              Cooked and set


The “cooking” of contracts didn’t stop at agreeing unrealistic prices for gas. Mould, Ahwoi and even their negotiation team went still further, setting contractual terms which allowed GNPC no wriggle room.

Sources at the Energy Ministry suggest that one of the main holes through which value-for-money for the Ghanaian taxpayer leaked was a $10bn take-or-pay commitment associated with Sankofa, enforceable over 15 years. Agreeing to the “take or pay” provision meant that even if GNPC did not take gas because demand was insufficient or the price too high, the corporation would still have to pay $10bn over duration of the contract.

In a last push to ensure that their party people stayed in the money, the two executives also pressurised GNPC into placing its revenues from Jubilee in an account that would be used as payment security. This has not only deprived the national oil company of vital income but also obliged the new government, under the leadership of President Akufo-Addo, to seek third-party financing to cover operational expenses.

How can Ghana be a home for the most expensive gas in the world? According to the Daily Statesman’s sources at GNPC, the chief executives of GNPC (K K Sarpong) and the Ghana National Gas Company (Ben Asante) are negotiating with ENI to seek reductions. The Italians complain of inflated service contracts which they claim the Mahama government forced on them.

The 2015 decision to award the contract to provide a floating production storage and offloading unit to an obscure Malaysian company, Yinson Holdings Berhad, is one of the factors believed to have inflated an already large development cost, exceeding that of both the Jubilee and TEN fields.