Saltpond decommissioning project: GNPC refutes report of alleged procurement breaches
Saltpond decommissioning project: GNPC refutes report of alleged procurement breaches

Saltpond decommissioning project: GNPC refutes report of alleged procurement breaches

The Ghana National Petroleum Corporation (GNPC) has refuted claims of procurement breaches related to the award of consultancy contracts for the Saltpond decommissioning project. 

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Responding to the allegations, GNPC released a ten-point statement on Friday clarifying the procurement process for the project. 

The Corporation emphasized that a news report had misrepresented the facts surrounding the contract awards.

It said the Saltpond Field, discovered in 1970 and put into production in October 1978, faced multiple shutdowns due to declining production, eventually leading to a complete shutdown in 2015.

It further explained that in response to the decision to decommission the Saltpond Field, the Ghanaian government appointed it to manage the project. On January 12, 2022, GNPC signed the Saltpond Field Decommissioning Contract with Hans & Co. Oil and Gas Limited, the chosen decommissioning contractor.

GNPC said given its limited experience in decommissioning, they sought a project management consultant to ensure quality control and assurance throughout the Saltpond Field Decommissioning Project (SFDP).

Per the statement, GNPC applied for single-source procurement on October 19, 2021, but later canceled the tender based on legal grounds after an internal review. Following a comprehensive review in July 2022, GNPC re-applied to the Public Procurement Authority (PPA) for a project management consultant, this time opting for an open competitive tender method based on PPA's recommendation.

Out of three firms that expressed interest, only two partnerships, Ensol Energy Ghana Limited (Ensol) and TSB Offshore Inc. (TSB), and PAP Energy Limited and Luy Resources, submitted proposals at the Request for Proposal (RFP) stage.

The statement said after a thorough evaluation of the proposals, GNPC awarded the contract to the Ensol-TSB partnership based on the merit of their tender.

"On March 7, 2023, Ensol notified GNPC of the withdrawal of its partner TSB from the project management consultancy contract and proposed a replacement. According to Ensol, TSB made a decision to prioritise other contracts it had over the project management consultancy contract due to the prolonged procurement process from tender submission in October 2022 until contract execution at the end of January 2023. Nowhere in the communication between GNPC and Ensol is there a suggestion that TSB’s withdrawal was as a result of any malpractice by anybody related to GNPC, and as such anybody suggesting that must provide evidence. Ensol’s request to replace TSB with another firm is currently going through GNPC’s internal due diligence process. It is therefore false that the PPA objected to Ensol’s proposed new partner," the statement said.

Addressing another allegation, GNPC clarified that almost 70% of the consultancy work was not completed by GNPC's technical teams before the project management consultancy contract was awarded.

"It should be noted that the scope of the project management consultancy is in three (3) phases: pre-decommissioning, decommissioning, and post-decommissioning. The critical phase covers decommissioning which is ongoing and post-decommissioning. In recognition of the fact that part of the pre-decommissioning had been done at the time of execution of the project management consultancy contract, the final contract price of under three million US dollars (USD3,000,000.00) was consistent with the change in scope".

GNPC also reassured the public of its commitment to ensuring the successful execution of the Saltpond Field Decommissioning Project, considering the significant environmental health and safety implications involved.

Read the entire statement below;

GNPC CLARIFIES PROCUREMENT OF PROJECT MANAGEMENT CONSULTANT FOR SALTPOND FIELD DECOMMISSIONING

Accra, 19 May 2023: The attention of the Ghana National Petroleum Corporation (GNPC) has been drawn to a publication by one Thibault Lanchon of the Africa Intelligence media entity, an affiliate of Indigo Publications ran by Phillipe Vasset on the above subject. The said publication seeks to disingenuously impugn procurement breaches regarding the award of consultancy contracts in respect of the Saltpond decommissioning project. The Corporation’s response to the false allegations raised by Africa Intelligence are as follows.

1. The Saltpond Field was discovered in 1970 and put into production in October 1978. It had been shut in several times due to a decline in production with complete shutdown in 2015 when production became non-commercial.


2. The Government of Ghana decided to decommission the Saltpond Field and appointed the Ghana National Petroleum Corporation (“GNPC”) to manage the project. On January 12, 2022, GNPC and Hans & Co. Oil and Gas Limited, the decommissioning contractor, signed the Saltpond Field Decommissioning Contract for the decommissioning of the Saltpond Field.

3. As part of the project implementation, GNPC without any prior decommissioning experience began its search for a project management consultant to ensure quality assurance and quality control of the Saltpond Field Decommissioning Project (“SFDP”).

4. OnOctober 19, 2021, GNPC applied to the Public Procurement Authority (“PPA”) to use the single source procurement method to engage a project management consultant for the SFDP. The PPA approved GNPC’s request on January 27, 2022. Following an internal review of the process, GNPC cancelled the tender on legal basis.


5. After a subsequent comprehensive review in July 2022, there was a need for a project management consultant. GNPC re-applied to the PPA to secure a project management consultant for the SFDP using the single source procurement method. In a letter dated July 28, 2022, PPA recommended that GNPC adopts an open competitive tender method instead of the 2 single source procurement method. GNPC complied with PPA’s directive and commenced a competitive tendering process in respect of the project management consultant for the SFDP.

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6. Three (3) consultancy firms responded to GNPC’s request for expression of interest for the project management consultancy and all three (3) advanced to the Request for Proposal (RFP) stage. However, of the three (3) consultancy firms, only the partnerships of Ensol Energy Ghana Limited (“Ensol”) and TSB Offshore Inc. (“TSB”); and PAP Energy Limited and Luy Resources submitted proposals at the RFP stage.

7. After evaluating all the proposals submitted, GNPC awarded the contract to the Ensol-TSB partnership and executed the project management consultancy contract on January 30, 2023. The award of the project management contract to the Ensol-TSB partnership was based solely on the merit of the tender submitted. The Ensol-TSB partnership showed it had a comparatively better experience in the upstream petroleum industry and scored higher in critical requisite areas for project management consultancy for decommissioning. For example, Ensol had provided services to reputable international oil companies who were GNPC’s partners prior to the SFDP and the current GNPC Chief Executive assuming office. It is therefore erroneous to imply that the Ensol-TSB partnership was awarded the project management contract, not on the strength of its proposal but on bias.

8. On March 7, 2023, Ensol notified GNPC of the withdrawal of its partner TSB from the project management consultancy contract and proposed a replacement. According to Ensol, TSB made a decision to prioritise other contracts it had over the project management consultancy contract due to the prolonged procurement process from tender submission in October 2022 until contract execution at the end of January 2023. Nowhere in the communication between GNPC and Ensol is there a suggestion that TSB’s withdrawal was as a result of any malpractice by anybody related to GNPC, and as such anybody suggesting that must provide evidence. Ensol’s request to replace TSB with another firm is currently going through GNPC’s internal due diligence process. It is therefore false that the PPA objected to Ensol’s proposed new partner.


9. The statement that “almost 70% of the consultancy work had already been done by the GNPC’s technical teams” before the project management consultancy contract was awarded is false. It should be noted that the scope of the project management consultancy is in three (3) phases: pre-decommissioning, decommissioning, and post-decommissioning. The critical phase covers decommissioning which is ongoing and post-decommissioning. In recognition of the fact that part of the pre-decommissioning had been done at the time of execution of the project management consultancy contract, the final contract price of under three million US dollars (USD3,000,000.00)
was consistent with the change in scope.

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10. Given the far-reaching environmental health and safety implications of the SFDP, GNPC assures the public that it is committed to ensuring the successful execution of the SFDP as has been the case throughout the lifecycle of the SFDP.

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