News

PRESS STATEMENT

Jan 27, 2010

STOP THE POLITICAL HARASSMENT OF THE EO GROUP

The Alliance for Accountable Governance (AFAG) strongly bemoans the Political persecution of Ghanaian businessmen and especially that of the Ghanaian shareholders in KOSMOS Energy, the company that discovered Ghana’s oil fortune.

Ghana in search of economic development has made limited progress especially since independence and all attempts must be made to build our own indigenous businesses and businessmen.

The PNDC, setting its regime on the premise of attacking indigenous businessmen, labelling them as thieves and imperialist collaborators, truly antagonized a lot of hardworking Ghanaians. The result was seizure and confiscation of their properties thereby incapacitating and collapsing several indigenous businesses.

In this regard, the citizens vetting committee (CVC) and the Workers Defence Council (WDC) saw to the freezing of Assets and the collapse of all indigenous businesses under the pretext of bridging the wealth gap between rich and poor. Notably amongst them; TATA Brewery Company in Accra owned by J.K Siaw was seized and his assets frozen, Dr. Kwame Safo-Adu who secured a loan from the Africa Development Bank and the World Bank to build a Pharmaceutical factory had his factory vandalised by revolutionary cadres and Assets Frozen. Some other industrialists and entrepreneurs who fell victim to this anti-indigenous business pursued by the PNDC include B A Mensah of ITG fame; Appiah Menka of Apino and Addison.

Despite this sad background, there arose an intense interest among Ghanaians in the Diaspora with the exit of the hostile P/NDC in 2001. The many Ghanaian groups that thronged Ghana included the EO group.

In respect of the KOSMOS/EO energy deal, AFAG has been following the unfolding drama with shock and dismay. The raiding of the office and residence of George Owusu by the Police; the intimation by the Attorney General to KOSMOS USA to terminate the appointment of George Owusu and the freezing of his bank accounts and Assets since November 2009 are ominous signs. Currently AG is said to have proferred 25 charges against the EO group amongst which are: failure to call an annual general meeting in the year 2003, failure to circulate profit/loss account, balance sheet and reports of the company, establishing a business contrary to the Investment Promotion Act, forging the signature of the Partner, causing a Financial Loss of $1.325bn to GNPC, money laundering in violation of the Exchange Control Act, travelling with $10,000.00 through the Kotoka International Airport without declaring to Airport Officials.

These are politically motivated charges calculated to dent the image of Mr George Owusu and Dr. Bawuah Edusei in the corporate world and devalue Kosmos shares.

Whilst agreeing that Ghana’s search for oil, dates back to 1896 no significant discovery was made except for the Saltpond oil find in 1970.It is clear that the Ghana National Petroleum Corporation (GNPC) has never explored oil in Ghana. Indeed over 100 companies have attempted exploration and without any commercial discovery, left the country. This is a fact according to the GNPC’s own account.

However, as part of their agreements with oil companies, the GNPC have possession of all the Geological and seismic data on all the failed exploration attempts by the various companies.

Indeed but for the perseverance and dedication of the EO group after being rejected by 12 oil companies in USA, Ghana wouldn’t have found the Jubilee oil fields. AFAG has established that, as of 2002 all major oil companies regarded oil exploration in Ghana as high risk and a “grave yard”. This lead to the departure of The following companies like Hunt Oil 1999, Fusion Oil and gas from Australia in 1999, Santa Fe, 2000 NUEVO 2002, Dana 2005. Unfortunately all the wells drilled by these companies yielded no viable commercial discoveries.

It is on record that with the help of the Greater Houston Partnership, a major business group in Houston, Texas dedicated to the promotion of Business between Houston, Texas companies and the rest of the world, the EO group organized a conference in Houston to enable Ghana’s energy experts from GNPC and the Energy ministry address the industry on the offshore hydrocarbon potentials in the Country. The E.O Group then facilitated a visit to Ghana by Vanco Energy which resulted in Vanco taking an oil exploration block in Ghana.

The EO group without success with Vanco, solicited interest from many companies including Texaco, Oxy, Shell, Hess,the Chinese oil company but they were all reluctant to come to Ghana due to the risk(Talking about risk, it costs one million dollars a day to drill an oil well. It can cost up to 80 million dollars to drill one oil well).The Irony of it is that, China Oil Company which refused an offer by EO to explore Oil in Ghana in 2003 are now in a position to buy the $4billion shares of Kosmos in order to produce. What a case of “monkey dey work, baboon dey chop”

In December 2003, the EO group came into contact with the Technical personnel of Kosmos Energy whose primary focus was to explore for high risk petroleum prospects in Africa. This group previously of Triton Energy had found oil in Equatorial Guinea in 1999.

The E.O Group and Kosmos on the sidelines entered into private negotiations and E.O was entitled to 3.5% working interest. The 3.5% is a private arrangement with Kosmos Energy and not the Ghana Government. Furthermore, the EO share of 3.5% is not deductible from the government of Ghana’s share but from Kosmos’.

This cannot be said to causing financial loss to the state. Indeed this deal of 90% to the exploring private firm and 10% to state was introduced by Tsatsu Tsikata then GNPC Boss as an enticement sufficient enough to bring foreign experts to explore at their own cost. Such is the case of the agreement between Ghana (10%) and Dana (90%), Ghana (10%) and Hunt Oil (90%) and also that of Ghana (10%) and Nuevo (90%) all signed by Tsatsu Tsikata in 1998, 1997 and 1999 respectively.

In any case, it is documented that most oil companies prior their exploration made a deal of 10% of net returns to Ghana and 90% to the firm. This provision has been there before the EO group joined in the search and was in accordance with the Ghana Petroleum Law, approved by the GNPC Board, the Ministry of Energy and Cabinet and unanimously ratified by Parliament in July 2004.

Indeed Dr. Paa Kwasi Ndoum was the then Energy Minister who signed the agreement prior to the necessary paper works. Also the deliberate silence of leading members of the current NDC government notably, Haruna Idirisu, Alhaji Amadu Sorogho, Moses Asaga and Dr Kwame Ampofo who were part of the parliamentary select committee that worked on the agreement is worrying and this silence gives room for several interpretations.

If the A-G’s outfit has any questions arising out of a deal that has been ratified by Parliament, the most appropriate forum to seek redress is the Supreme Court.

Indeed, it cannot be a crime for a Ghanaian to properly secure and own shares in a Multi National Company. We have examples of Ghanaians in the same oil sector with shares in other Multi National Companies to the tune of 4.5%. If owning shares in companies were to be a crime then why are we not witnessing a parade of such cases but only witnessing the political persecution of just George Owusu and the EO Group?

We are also aware that, ANADARKO (the main Oil rig operator in the Jubilee field) Petroleum’s preliminary investigations in accordance with the Foreign Corrupt Practices Act (FCPA) for any possible fraudulent dealings had the EO group exonerated.

What therefore is the basis of the Persecution? We foresee the long Political arm of the AG in this issue but Government must learn from the words of William Cunningham;”A man will not risk what he has in trade, except for the prospect of very large gains, if he is likely to be robbed by pirates, or to be oppressed by the Government if he is successful in business”.

Government should neither rob nor dissipate the wealth of its indigenes and as stated by Thomas Hobbes” The riches, power, and honour of a country arise only from the riches, strength and reputation of its countrymen. For no Country can be rich, nor glorious, nor secure, whose citizens are either poor, contemptible, or too weak through want, or dissention”

AFAG is motivated to pursue this advocacy if it takes to organise Public lectures, Rallies or whatever platform that it takes for the citizen to rise to the fight against social injustices and a calculated attempt by the partisan and bellicose Attorney General to attack genuine indigenous businessmen.