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GNPC: Ghana’s oil cannot be sold at huge discount

The head of Evaluation and Monitoring at Ghana National Petroleum Corporation (GNPC) says the price of Ghana’s new oil should not be markedly different from that on the international market.

Kwame Ntow Amoah told Joy FM that although he could not state the price at which Ghana’s crude oil would be sold, the expectation of GNPC was that the first consignment of Ghana’s oil price will be as close as possible to the crude oil price on the world market.

Speaking on the Super Morning Show, Mr. Amoah explained that when a relatively new oil gets on to the market, it takes some time for it to get its technical value, adding that that notwithstanding, the GNPC does not expect the price of the first consignment to be as low as the figures published in the media.

Reports have been rife about Ghana’s first oil consignment being sold at $60 per barrel much lower than the close to $90 being sold at the world market.

He said that the GNPC will not accept the argument proposed by Tullow Oil that the low pricing scheme was intended to attract buyers to Ghana’s relatively new oil, especially because Ghana had embarked on pre-marketing of its crude oil and so does not expect such a huge discount.

He said that there was a process of reconciliation by which the partners used to arrive at an agreed market price; one which has been indicated in the Ghana Petroleum Agreement.

According to Mr. Ntow Amoah, there are other transactions which were not commercial in nature called “arm’s length transactions”, that allows an entity to sell its crude to an affiliate or conduct a batter trade with an affiliate, and if Ghana used that alternative it should be able to get pricing as close as possible to the technical value.

Mr. Kwame Ntow Amoah said that based on the work which the GNPC did in the pre-marketing, it was expected that Jubilee Oil would attain a premium over Brent although they recognized that it would take time to achieve that.

He said that GNPC have worked with competent entities that have the financial muscle and the networks in the market, expected to reach world-class refineries to process the Jubilee Field crude which will increase its value.

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