English EN French FR Portuguese PT


30th April 2019

Dear Mr. Amewu,

Your Campaign of Insults Against IMANI is a Distraction


We have noticed several news reports, obviously being sponsored, promoted or generated by you or your assigns.

We have listed web links to a few of them:

  1. https://www.ghanaweb.com/GhanaHomePage/NewsArchive/IMANI-has-poor-understanding-of-petroleum-economics-Energy-Minister-741952


  1. https://www.ghanaweb.com/GhanaHomePage/NewsArchive/IMANI-got-it-wrong-Energy-Minister-says-about-Aker-oil-discovery-742253


  1. https://www.ghanabusinessnews.com/2019/04/27/imani-lacks-understanding-of-petroleum-economics-amewu/

The thread running through all of these is a concerted effort by yourself and your agents to paint IMANI as: “unintelligent”, “ignorant”, “incompetent”, “reckless”, “malicious” and “unsophisticated”. You have accused us of being dumber than your toddler daughter and of lacking any knowledge in “petroleum economics”.

We would suggest that as a public servant, you uphold the dignity of your office by focusing on the important issues raised, instead of playground antics of who is smarter than whose daughter.

We take our civil mandate to scrutinise what public officials and political leaders do in our name and on our behalf very seriously and for over a decade and half we have never allowed ourselves to be bullied by abuse-throwing public servants and functionaries.

We are returning to the issues we raised during our recent forum to reiterate our suspicions about your commitment to the public interest. Below, we have broken down your chain of claims into their bare elements so that we can more effectively alert the public, your employers; and the President, your appointer, of the dangers and risks this country is exposed to as a result of your current posture to Ghana’s sovereign claims in our energy sector.

The central issue we raise in our forum was the seeming lack of enthusiasm to seek the highest benefit for the people of Ghana, for example regarding the enforcement of time limits for the commencement of operations prior to assignation of rights under the original HESS contract, and the absence of a strategy when this opened up the prospect of implementing a new Petroleum Agreement, to be duly ratified by Parliament, under the more advantageous contemporary petroleum regime. We have argued that the slow approach to responding to the Aker Plan of Development (PoD), which was incurably flawed and illegal on arrival, and which had to take our prompting before your response, is further evidence that you are not committed to serving the national interests of Ghana.

We are happy you responded to the PoD, but the central issue of whether you have secured the optimum advantage for Ghana remains improperly addressed. Random press conferences full of sound and fury cannot substitute for sound, well-reasoned and clearly articulated, policy.

We also note that the Government of Ghana has on numerous occasions asserted that new finds have been made in the DWT/CTP acreage. If there have indeed been NEW finds outside the development area, then steps should be taken to negotiate a new Petroleum Agreement for them immediately, since trite petroleum law in Ghana holds that all areas outside the 10% boundary of the discovery area revert back to State ownership after the expiration of the exploration period. We will be seeking detailed information on this under our Constitutional Right to Information, in order to monitor progress and seek the necessary legal redress as citizens, if we find anything untoward. These are the critical issues at stake, and not, with all due respect, the bombast we witnessed at your recent press conference.

We outline the other critical issues as follows:

  1. Valuation of the Deepwater Tano Cape Three Points (DWT/CTP) block


You asserted that IMANI ignorantly placed the value of $30 Billion on the Oil reserves found and that we were wrong because that is the wrong approach. You said we should have known that the recoverable reserve potential based on historical rates was the right approach for estimating such a find.

Petroleum resource valuation is not undertaken using models invented by your good self, Sir. Per the information available to us, you have never, personally, designed even a basic, homogenous, reservoir volumetric model in your life before, not to talk about a full-blown simulation. Your posturing as if you have some technical insights into these affairs is therefore worrying, as you may extend such conduct to your technical advisors. Both your office and ours need to rely on our expert advisors in these matters. We have done that consistently, but we are not sure that you have.

Over the life of a field, techniques become available that enable more resources to be converted to reserves. Operators also learn more about the field geology, which knowledge may then compel them to re-assess reserves. Furthermore, changing fiscal conditions may lead to delays or suspensions in the exploitation of resources, previously deemed commercial. For example, the price of oil or natural disasters, or even reservoir failure, can render some erstwhile resources considered proven reserves sub-commercialor even worse, no longer economic.

 All these factors are commercial risk factors that the companies that we grant licenses to explore and extract these resources bear.

It is not for a Minister of State pronouncing on resource valuation to assume parameters of commercial risks on behalf of operators! At the very least, you should be seen to be canvassing an approach which strengthens Ghana’s bargaining position instead of weakening it. This is part of the pattern which raises our concern.

To emphasise, reserve commerciality and recoverability of resources are time-based determinations, made as various unrisking data become available. Simply because the ability to recover oil is heavily dependent on the technology curve and the price of oil trends. Given how widely varying field dynamics are from one oil field to another, it is SHEER ILLOGICALITY to use historical rates of recovery to value a field with a lifetime exceeding a decade, when technology continues to improve and the long-run price-trend of oil continues to be upward and positive.

At any rate, IMANI was being conservative when it produced a ballpark estimate in oral comments during its forum. That estimate did not take into account future improvements in technological and operating conditions nor valuation of gas reserves. It restricted itself solely to the GROSS CONTINGENT RESOURCES estimated by Aker itself, and accepted by the Government of Ghana, subsequent to an ongoing Appraisal program! These 1C contingent resource estimates are what Aker has committed to its investors.

To be conservative we did not use the 3C and prospective resource estimates, which may well top 1 billion barrels, as our yardstick of ballpark estimation. We restricted ourselves to the conservative lower bound of Aker’s own commercial resource estimates. The ongoing appraisal effort might well lead to an increase in the quantity of contingent resources, as has happened in the present case. It is extremely strange for a Minister of State to apply an adjustment that seeks to suppress the valuation of a national asset, to the detriment of the nation he represents! At this stage, either Aker is telling untruths, or you are, Sir.

In your intolerance and haste to condemn us, Sir, you shifted our position (as you did in many instances) and pretended that IMANI was referring to prospective, possible or probable resources, yet to be established as recoverable in future appraisal programs. We made that ballpark estimate based on the commerciality lower bound of the ‘Gross Contingent Resources’ approach, an accepted industry approach.

Furthermore, by using the spot price of oil, despite the obvious long-run price trend of oil, IMANI was clearly signalling a ballpark estimation approach hence the decision not to even bother with cashflow discounting, or to compute the additional impact of the gas resources or other knock-on commercial effects in the sector. This should have been obvious to you if your primary focus had not been demonization and ridiculing Imani.

Due to this strange unwillingness to see things from Ghana’s perspective, and to see everything from the private operator’s perspective, you insist that in coming up with a gross value of the discovery, we ought to have used historical recovery rates, which reflects specific operational and technological decisions made by other foreign operators in the past.

Seeing as you are so minded to champion the interests of Aker and the others, why did you not suggest then that we should also factor in the costs of production and maintenance and then apply a DCF analytic to get the Appraised Value? Or even extrapolate from the market valuation used by Aker when acquiring the concession? Surely that would have been more rigorous if the intention is to produce a valuation from the perspective of operators? It would seem that even in seeking to champion the interests of the private investors, rigour still failed you.

Your “historical recovery rate” model is certainly not sound even from the narrow perspective you have adopted, once more showing your weak grasp of practices in your own sector. We are compelled to say that your analytical approach raises very serious doubts about your negotiation capacity.

Just so that you never misconstrue what we say again, we shall repeat our position once more: a ballpark estimate based on gross contingent resources is a sound approach anywhere in the world where the analysis is based purely on valuing the field as a national economic resource and where the intention is meant to highlight the importance of a patriotic approach to negotiations by reminding the public about what is at stake.

Your attempt to dismiss our efforts as unsophisticated rather reveals your unwillingness to fight and obtain the highest return for Ghana; it suggests your willingness to accept any argument at all from the other side of the negotiating table.

Just for the sake of readers who may want to delve into these matters further, despite all that we have said already, let’s cite one industry example. In 2011, Tullow paid $305 million to increase its share in the multi-discovery Jubilee field by 1.75 percentage points. This, in essence, valued the field at $17.5 billion. At that time the best available information indicated resource volumes of 400 million barrels at the lower bound (less than is currently indicated for the DWT/CTP discoveries). The ballpark valuation estimate for gross (1C) contingent resources at that given date for the field was about $20 billion, very close to what the field was sold for, a price point regarded as “value enhancing” for the purchaser by analysts. This approach is more in tandem with ours than it is with your historical recoverable rates approach.

No serious analyst, whose work we have reviewed, talked about using historical recovery rates from 2010 to benchmark the Jubilee valuation. The bankers who assessed the deal used both proved and probable reserve estimates, and the contingency applied for resources were 2C contingency-based, in view of the probability of additional discoveries and the successful conversion of resources to reserves. The serious adjustments to valuation at that point was DCF analysis of income, net working interest, and commodity pricing dynamics to establish a market baseline and business case.



  1. Appraisal Program – Impact on Negotiations


Most of your other points in your hurriedly organised press conference are too contingent on various other matters, which, sadly, you completely ignored, to warrant comment here, but out of courtesy to you and the readers of our open letter, we shall briefly address them for that they are.

Our position, canvassed during our forum, was, and remains that, an appraisal program produces information critical to the negotiating stance of the host government during discussion and approval of the Plan of Development. A smart strategy in these circumstances would be to evaluate the circumstances under which the original Hess agreement was extended, and the nature of the rights transferred to Aker.

A good negotiation strategy would dictate that we do not give up more than we need to in dealing with Aker and for everything we give up, we should get something back. We don’t expect to squeeze Aker, which would be counter-productive, but we should also not give up everything without a quid-pro-quo.



In our submission on the PoD, We argued that the draft Plan of Development submitted by Aker sought to facilitate the acquisition of rights through the PoD that only a substantive new Petroleum Agreement, approved by Parliament, can confer. The same PoD purported to apply for extensions to an existing agreement which could only be obtained by a different process which would require Parliamentary approval.

It beats our imagination that a company like Aker would not know these, and makes us wonder if they expected this to pass. Clearly they did, because they even inserted conditions precedent which a cursory glance at applicable law will tell everyone is fatal to any PoD. So we asked ‘from where does Aker derive such confidence to even advance a legally flawed and totally unacceptable PoD, and how is it that we have not responded immediately or expeditiously to them, rather waiting and risking as legal argument on this’?

We pointed out that by law, once commerciality is established for a find, a Joint Management Committee, with virtually equal participation by the GNPC, takes over development planning. Or at least, ought to, in a proper reading of the law. So, that flawed PoD that you have apparently rejected was produced under the watchful eyes of the GNPC, which reports to you and answers to the Petroleum Commission. Unless both your Ministry and the Petroleum Commission were sleeping on the job, things needn’t had escalated to the level they did before you acted.

Your answer, Mr. Minister, was that you were in the consultation process and in any case you submitted the letter rejecting the PoD a day before our forum, and sought to hold us out as ignorant troublemakers.

Mr. Minister, you further said we could have simply approached your office for the information, and added other comments intended to ridicule us.

What you did not tell the public was that we had written to you and had a meeting with Senior officials (including your deputy) of the Ministry and expressed our clear concerns about these matters, which we deem injurious to national interest. So, the impression you created that we went off on our own without checking with the Ministry is incorrect, and indeed if there is any information asymmetry, the fault is entirely yours.

Your conduct overall gives rise to the suspicion that Aker may have significant influence at the highest levels of petroleum policymaking in this country, and that they were emboldened to draft the offensive parts of the P.O.D with the encouragement of powerful actors.

We assure you that we shall be paying very close attention to the approval process of the P.O.D. when Aker resubmits same for approval.



  1. Aker’s New WAG Technology

Your claim that Aker is introducing some unprecedented new technology into our deepshore oil sector, for which reason the country was poised to earn more than it would have, was one of the most bizarre in a press conference filled with strange claims. Please note that the WAG technology is NOT NEW. The Norwegian Petroleum Directorate has been developing and evaluating this technology since at least 1991. In Aker’s earlier incarnation in Ghana, especially between 2008 and 2010, this technology was already available. Your enthusiasm for channeling every marketing claim made by Aker maybe interfering with your capacity to exercise strong due diligence, Sir.


  1. FUELTRADE Matters

This matter concerns the CEO of the GNPC. We cannot therefore fathom why you would wade into the discussions when you are neither his attorney nor representative. We intend to address the matters surrounding Fueltrade in the appropriate forum.

Ghana has suffered at the hands of those who exploit our natural resources, we cannot assume that our leaders will do everything perfectly, there are too many bitter lessons we have learnt over the years. This is why we and others are banding together to police our common national patrimony. We will be requesting information on decisions made in the dealings between all the agencies and Aker, and review them to satisfy ourselves and all who care that our interests are being handled well.

As always, we are open to a mutually respectful and open conversation about critical issues in your sector, Sir, but where we feel that your intention is to quash dissent and scrutiny through wanton insults and abuse..

We wish you a happy May 1st holiday. Have some good rest, and return refreshed and in a good mood to handle pesky and “troublesome” citizens like your good friends at IMANI.

Thank you.


Yours faithfully,




More News/Articles

Subscribe to our newsletter

Get the latest News/Updates in your inbox!