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The Norwegian oil giant, Aker ASA have responded to the December 30, 2009 letter written to them by Ghana�s Minister of Energy, Dr. Joe Oteng-Adjei in which the latter purported to declare their (Aker ASA�s) November 5, 2008 Petroleum Agreement (PA) with the Government of Ghana (GoG), Ghana National Petroleum Corporation (GNPC) and Chemu Power Limited, null and void. (See the January 21st, 2010 edition of The New Crusading GUIDE for the full text of the Minister of Energy�s letter under reference). While acknowledging receipt of the Minister�s letter, Maria Mor�us Hanssen, a top official of Aker ASA, and Aker Ghana, writing on behalf of the Chief Executive Officer (CEO) and President of Aker ASA, categorically stated that �AKER DO NOT ACCEPT THE LEGAL VIEW ON WHICH THE LETTER (DR. JOE OTENG-ADJEI�S DECEMBER 30, 2009 LETTER) IS BASED�. The top Aker ASA/Aker Ghana official recalled that �neither the Ghanaian Government nor GNPC, had any objections to signing the agreement together with Aker ASA�, adding that �on the contrary, we were explicitly advised that the requirement of having a Ghanaian company being party to the agreement would be formalised by assignment or otherwise, at a later stage�. �WE ACCORDINGLY SEE NO BASIS FOR DISPUTING THE VALIDITY OF THE PETROLEUM AGREEMENT (PA)�, Maria Hanssen emphasised. She underscored that Aker ASA and Aker Ghana disputed that any failure of compliance with the law occurred as stated by the Minister in his December 30, 2009 letter. She expressed the readiness of Aker ASA and Aker Ghana to seek a resolution to the apparent impasse, either through an assignment as offered earlier or by other means preferred by the Minister. �WE MAINTAIN THAT AKER AND AKER GHANA HAVE A LEGAL RIGHT TO REQUIRE SUCH SOLUTION TO BE EXECUTED, AND THAT GHANAIAN AUTHORITIES HAVE AN OBLIGATION TO OFFER THE SAME�, she clarified. With regards to the Minister�s decision to let GNPC begin negotiations with a consortium of companies allegedly sidelined earlier, Aker ASA indicated that �WE CAN ACCORDINGLY NOT ACCEPT THAT NEGOTIATIONS ARE INITIATED WITH ANY NEW PARTIES REGARDING PETROLEUM RIGHTS TO WHICH WE ARE IN THE PROCESS OF INVESTING IN, IN ACCORDANCE WITH THE PETROLEUM AGREEMENT (PA). WE ARE VERY SURPRISED THAT SUCH ACTIONS ARE EVEN CONSIDERED BY GHANAIAN AUTHORITIES�. She proposed that a meeting be held as soon as possible between the two sides to exchange views and discuss possible solutions in an amicable manner. �HOPEFULLY, WE WILL EITHER BE ABLE TO FIND A BASIS FOR FURTHER COOPERATION IN GHANA, OR A SOLUTION WHERE WE GIVE ROOM FOR ALTERNATIVES PREFERRED BY YOU, ON AGREED TERMS, REASONABLY COMPENSATING US FOR THE RIGHTS WE ARE GIVING UP, AND ALL COSTS ACCRUED�, she posited. Aker ASA�s letter was copied to Mr. Ato Ahwoi, Chairman of the Board of GNPC and Nana Asafu Adjaye, the Managing Director of GNPC. Published below is the full text of the letter from Aker ASA. �FROM OSLO, NORWAY TO ACCRA, GHANA Honorable Minister of Energy Dr. Joe Oteng-Adjei Ministry of Energy Private Mail Bag Ministries Post Office Accra, Ghana Post Office Box 40 Stadium Post Office Our Reference #2151669/1 Dear Sir, Aker hereby acknowledge receipt of your letter dated Wednesday, 30 December 2009. AKER DO NOT ACCEPT THE LEGAL VIEW ON WHICH THE LETTER IS BASED. We have together with Chemu Power entered into an agreement (the �Petroleum Agreement�) with the Government of Ghana (GoG) and GNPC. The agreement is sanctioned by the Parliament of Ghana. It is our understanding that it is fully in line with historic practices in Ghana that the agreement is signed by Aker ASA (�Aker�), being the foreign �principal� of the Ghanaian company which is to be/become the formal party to the Petroleum Agreement (PA), Aker Ghana Limited (�Aker Ghana�). WE UNDERSTAND THAT NEITHER THE GHANAIAN GOVERNMENT, NOR GNPC, HAD ANY OBJECTIONS TO SIGNING THE AGREEMENT TOGETHER WITH AKER ASA. ON THE CONTRARY, WE WERE EXPLICITLY ADVISED THAT THE REQUIREMENT OF HAVING A GHANAIAN COMPANY BEING PARTY TO THE AGREEMENT COULD BE FORMALISED BY ASSIGNMENT OF OTHERWISE, AT A LATER STAGE. We accordingly see no basis for disputing the validity of the Petroleum Agreement (PA). Furthermore, we point to the fact that we have always stated that we have regarded Aker Ghana as a (co-)party to the Petroleum Agreement (PA). Aker Ghana has even explicitly, in writing, undertaken full responsibility for all obligations under the Petroleum Agreement (PA). Both Aker and Aker Ghana have offered to confirm the responsibility of Aker Ghana further, by assignment or otherwise, even if this does not seem to be required from a legal point of view. AKER AND AKER GHANA DISPUTE THAT ANY FAILURE OF COMPLIANCE WITH THE LAW EXISTS. TO THE EXTENT THE MINISTER, GNPC OR OTHER GHANAIAN AUTHORITIES FEEL THAT THERE IS A FURTHER NEED FOR CONFIRMATION OF AKER GHANA�S OBLIGATIONS/POSITION WE HAVE OFFERED TO PROCURE THAT IN ANY WAY REQUESTED. THERE IS NO DOUBT THAT ANY SUCH NEED WOULD HAVE BEEN SOLVED BY SUCH ASSIGNMENT AS OFFERED, OR BY OTHER MEANS IF PREFERRED BY THE MINISTER. WE MAINTAIN THAT AKER AND AKER GHANA HAVE A LEGAL RIGHT TO REQUIRE SUCH SOLUTION TO BE EXECUTED, AND THAT GHANAIAN AUTHORITIES HAVE AN OBLIGATION TO OFFER THE SAME. We also point to the fact that GNPC have received amounts in the order of US$4 million in accordance with the Petroleum Agreement (PA), and knowingly accepted that Aker invested significant amounts in fulfilling the conditions of the agreement by acquiring seismic data and processing such data. In the letter reference is also made to the issue of local partner. Aker has, as you know, entered into a set of agreements with Chemu Power. All of these agreements have been presented to Ghanaian Authorities. The contents of these agreements are fully in compliance with applying principles of good governance. To the best of our knowledge the same applies to Chemu�s conduct under these agreements. More importantly, Chemu Power is party to the Petroleum Agreement (PA) to which the Ghanaian Parliament gave their consent and support November 2008. As you will understand from the above, WE REGARD OUR RIGHTS ACCORDING TO THE PETROLEUM AGREEMENT (PA) TO BE IN FULL FORCE. WE WILL ALSO MAINTAIN THAT WE ARE ENTITLED TO SUCH ADDITIONAL TIME UNDER THE AGREEMENT AS WILL FULLY RESTORE OUR POSSIBILITY TO FULFIL THE PETROLEUM AGREEMENT (PA), COMPENSATING FOR THE DELAYS WHICH HAVE BEEN CAUSED BY THE LACK OF COOPERATION BY GHANAIAN AUTHORITIES AND GNPC. We can accordingly not accept that negotiations are initiated with any new parties regarding petroleum rights to which we are in the process of investing in, in accordance with the Petroleum Agreement (PA). We are very surprised that such actions are even considered by Ghanaian authorities. However, we acknowledge that we will not be able to conduct business in Ghana without being welcome, even if we have an agreement giving us specific rights to do so. We are dependent on a positive cooperation with Ghanaian authorities, and realize that we can not achieve that through legal disputes/arbitration. We accordingly propose a meeting as soon as possible in which we can further explain our views, and discuss possible solutions with you. Hopefully, we will either be able to find a basis for further cooperation in Ghana, or a solution where we give room for alternatives preferred by you, on agreed terms, reasonably compensating us for the rights are giving up, and all costs accrued. If suitable to you we would propose that we come to Ghana in the second week of February. We look forward to hearing from you. for Aker ASA and Aker Ghana Limited Maria Mor�us Hanssen 18 January 2010 on behalf of CEO and President of Aker ASA �yvind Eriksen Aker ASA Fjordalleen 16, PO Box 423 Vika, NO-0115 Oslo, Norway E-mail: [email protected] Office: +47 24 13 00 62 Mobile: +47 951 82 749 Fax: +47 24 13 01 06 Copy: Chairman of GNPC, Mr. Ato Ahwoi BAHR, att. Rune Svoren, legal counsel The Managing Director, GNPC Separating The Facts From Fiction EO GROUP�s US-BASED LAWYERS SET THE RECORDS STRAIGHT By Samuel Frempong After months of heated polemics and the seeming unending controversy over the EO Group�s acquisition of a stake in Ghana�s Jubilee Oil Fields, Solicitors of the company have finally broken their silence to set the records straight and also demystify the dubious perceptions created by the National Democratic Congress (NDC) government about the Company�s operations. It is clear that inspite of unquestionable evidence and common knowledge about EO group�s activities, government in dealing with matters relating to the company, has pretended as if there is a myth around the Ghanaian entity which needs to be broken at all cost. Following these developments, Solicitors for EO group, Barnes & Casco Limited have issued a strong worded statement to as they put it �to separate the facts from fiction� and also warned the government about its desperate moves to incriminate their client for some cheap political reasons. Published below is the unedited statement issued by Barnes & Cascio LLP, Houston, Texas. *STATEMENT OF EO GROUP LIMITED: It is time to separate fact from fiction, and end the destructive rumors circulating about EO Group�s role in the discovery of oil and gas reserves in Ghana. Here are the plain facts concerning the central issues: *WHO IS EO GROUP LIMITED?: * EO Group Limited is the successor to a Ghanaian corporation established in 2002 by George Yaw Owusu and Dr. Kwame Bawuah-Edusei � two respected Ghanaian ex-pats who were then private individuals living in the United States and looking for ways to bring economic opportunity and investment to their native land. * There are no other owners, officers or directors of EO Group. No one else has any stake or interest in this company, and no one else ever did. *HOW DID EO GROUP BECOME A PART OF THE JUBILEE FIELD OIL AND GAS DISCOVERY?: * It was EO Group that brought Kosmos Energy to Ghana and introduced Kosmos to the Ghana National Petroleum Corporation (GNPC) and the Ministry of Energy (MoE). The principals of EO Group were the honest brokers who introduced Kosmos to Ghana and encouraged Kosmos to commit to apply for the right to explore the West Cape Three Points Block in Ghana�s waters. It was this project that yielded the Jubilee Field discovery. * It was EO Group that impressed upon the GNPC and MoE Kosmos� integrity, technical expertise and financial capability. Long before anyone knew whether there was oil under that block, EO Group signed on with Kosmos as the Ghanaian member of the team in the application for exploration rights that made the discovery possible. * EO Group and its principals never paid or promised anything to anyone in the Ghana government in order to secure its role with Kosmos or in the block. Its principals simply had the willingness, persistence and vision to invest themselves in bringing a sophisticated oil and gas exploration company to Ghana at a time when no discoveries had been made for many decades and the few oil and gas companies in the country were leaving. *HOW DID EO GROUP OBTAIN SUCH A POTENTIALLY PROFITABLE INTEREST IN THE WEST CAPE THREE POINTS BLOCK?: * EO Group entered into contracts with Kosmos setting forth plainly, in writing, that in return for introducing Kosmos in Ghana and directing its attention to the West Cape Three Points block: * KOSMOS AND EO GROUP WOULD EACH HAVE AN INTEREST IN THE BLOCK, * KOSMOS WOULD PAY EO GROUP AN INITIAL FEE AND WOULD BEAR SOME OF THE EXPLORATION AND DEVELOPMENT COSTS FOR EO GROUP�S 3 1/2 % INTEREST IN THE BLOCK, AND * EO GROUP WOULD REIMBURSE KOSMOS FOR THOSE DEVELOPMENT COSTS. * The MoE, GNPC, Kosmos and EO Group then negotiated and entered into a Petroleum Agreement for the block that followed a common division of interest then being used in Ghana: * The contractors would bear 100% of the exploration and development costs and divide among themselves 90% of the production before taxes, * GNPC would receive a 10% share of production with no exploration or development costs, as well as certain highly profitable opportunities to obtain an additional share and a supply for the domestic market, and * The government would receive the royalty of 5% on production and taxes on the income of the contractors from the project. * In reality, because GNPC does not have to front exploration and development costs or incur risk, the profitability of the government�s take from this project is far greater than publicly reported. * THE WEST CAPE THREE POINTS PETROLEUM AGREEMENT YIELDS GOOD VALUE TO GHANA, AND IS BOTH REASONABLE AND FAIR IN VIEW OF THE NEAR COMPLETE ABSENCE OF SUCCESS IN PRIOR EFFORTS TO FIND OIL IN GHANA. ONLY THROUGH THE CONTRACTOR GROUP�S APPLICATION OF GREAT TECHNICAL EXPERTISE, INVESTMENT OF THE MASSIVE FUNDING REQUIRED FOR DEEP-SEA EXPLORATION AND UNDERTAKING OF ENORMOUS RISKS COULD THIS DISCOVERY HAVE BEEN MADE. *IS EO GROUP�S SHARE OF THIS FIND FAIR?: * EO Group, through its principals, quite literally brought the parties together to achieve the discovery of the Jubilee Field that is a country-changing event for all Ghanaians. EO Group�s principals invested themselves, their credibility and their resources in the effort. It was a huge gamble, and it succeeded beyond anyone�s imagination. * In fact, prior to bringing Kosmos to Ghana, EO Group had joint ventured with another exploration company that sought this same block but lacked the commitment and financial heft to see it through to conclusion. EO Group reached out to Kosmos and set in motion this enormously successful effort. * EO Group stands to receive the same benefits any business venture can achieve through innovation, dedication and risk tolerance, when the effort results in a huge discovery of petroleum. If no oil had been found, they would have been paid only their initial fee for their time and no one would have been concerned with their wasted effort. If the discovery was only marginally successful, no one would think the deal unfair. Because the project was hugely successful, they should not now be second-guessed and punished. *WHAT IS THE IMPACT OF THE CONTINUED UNCERTAINTY ABOUT EO GROUP?: * EO Group and its principals have been subjected to an incomprehensible campaign of character assassination, false allegations of misconduct, and abuse. No one should suffer such treatment for bringing such great benefit to their countrymen, and certainly not innocent men such as the two EO Group principals. * The people of Ghana are watching. Who will risk themselves to bring economic development to a nation that then turns on them, vilifies them, attempts to destroy them? * The world is watching. The international community hailed our democracy last summer and reminded us that we must abide and honor our legal and contractual obligations. Yet, now we are sending a message to the economic investment community across the globe that Ghana might reject and reform contracts to flow with the shifting political tides. What worthy investor would risk its money and effort by subjecting itself to such uncertainty, such cost, such arbitrariness? It is time for this ordeal to end. It is time for Ghana to move forward. Contact: James Barnes, Esq. Barnes & Cascio LLP Houston, Texas Office: +1 281 875 0250 Email: [email protected]