MPs seek to clip GNPC’s wings
General that the corporation, if not properly checked, could grow into a "monster institution too powerful to control.”
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Already, Mr Asiamah, a member of the select committee, said the corporation had started exhibiting "signs of a monster state institution that does not want to comply with Parliamentary requirements."
A case in point, he said was the recent disagreement between the house and GNPC over the acquisition of an office space.
"The Petroleum Revenue Management Act (PRMA) says Parliament should approve of your work programme. You came to Parliament with a rental option and Parliament said no, go and build. But what did we see? They went and rented," he said.
"So, even now, they are disobeying orders and if you are not careful and you allow them to do their own things, then it will just be dangerous," he said.
The corporation has since denied flouting the orders of the house on the issue.
Regulatory constraints
With this and many other examples in place, the MP said the committee was cautious of the corporation's current requests, which are aimed at strengthening its balance sheet and legal status to maximise value from petroleum for the country.
A deputy Minister of Petroleum, Mr Benjamin Dagadu, confirmed Parliament's posture on GNPC's request in a separate interview.
He explained that the feeling by MPs was that "GNPC can overstep its boundaries if they (Parliament) are not careful."
"I think some of them feel we need to empower GNPC but in a way that it does not become too powerful," he told the Graphic Business.
Currently, the regulatory framework governing the operations of the corporation requires that its work programme, including key transactions, are approved by Parliament, a requirement GNPC has long cited as a major hurdle to its long term objective.
With a target of increasing revenues to US$1.2 billion by 2018 and subsequently becoming an influential NOC similar to the likes of Petronas of Malaysia, Petrotin of Trinidad and Tobago (T&T) and Statoil of Norway, GNPC had always maintained that regulatory restrictions on it needed to be eased and its balance sheet propped up to enable it to take up high net-worth deals as and when they arise.
Even though the Parliament and the Select Committee on Energy and Mines, in general was not against that ambition in principle, Mr Asiamah said MPs were conscious of what a "powerful GNPC can do in this country."
"If we are not careful, it becomes a monster. An example is Statoil of Norway, which became too powerful to the extent that they could even decide who becomes the next president," he said.
The GNPC has always dismissed such assertions, insisting that the push for empowerment in the face of a burgeoning local petroleum sector is to enable it to get equitable value from the resource for the country, whose interest it serves.
Ownership of CAPI
Until the amendment of the PRMA in mid last year, the GNPC served as the holder of oil proceeds categorised under carried and participatory interest (CAPI).
The review of the Act, however, changed that arrangement, making it possible for the corporation to own such revenue, a move it lauded as progressive and in support of its push for a bigger balance sheet.
That excitement was, however, short-lived as the E&P bill requested for a return to the old system.
GNPC has criticized that suggestion as disingenuous to the general wellbeing of the corporation and country's long term objectives in the petroleum sector.
"Of what benefit will it be, if they say that GNPC should not own the revenue but the government should? If the government owns it, it will just be there and used only for consumption expenditure, not investments.
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“But GNPC needs that money to trade with so that it can grow and return more value," the source said.
The corporation has subsequently submitted that position to the committee, which the deputy minister said would be considered in due course.
“Another issue of contention was GNPC’s request to have direct access to the carried and participatory interest before it is shared under the Petroleum Revenue Management Act (PRMA).
“Their main problem is to have direct access to the funds under the PRMA. They think that if that is changed and that account is not with them and they do not have collateral, it can forestall their desire to raise funds to cover their operations,” he said.
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Mr Asiamah confirmed that the issue had been raised at the committee level but said the request of the corporation was “likely to be granted.”