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14 July 2017

Is Siemens involved in shady oil and gas deal?

Siemens, a German conglomerate, with a checkered past over bribery allegations has its name pop up in an oil and gas deal in Ghana.

Siemens via its subsidiary formed a joint venture in Ghana sometime in 2016 to compete in a gas compressor contract in the ENI Sankofa Gas-field project. It is believed that Siemens won the contract to supply a compressor package to process the ENI Gas coming from the Sankofa field to Sanzule, a town near Takoradi in Ghana. While Siemens won the ENI contract to supply two compressors, an indigenous Ghanaian company own a similar contract to supply a third compressor to the Ghana Gas Corporation to also process the Gas coming from the Sankofa field at the Ghana Gas plant in Atuabo.

According to sources, ENI had optioned the supply of this third compressor to Siemens but this option was not exercised because Ghana Gas wanted the indigenous company to have the opportunity to perform the contract of supplying the third compressor in the interest of strengthening local competency in this area.

All these allegedly changed after officials from Siemens, according to sources at the Jubilee House, visited the president in February 2017 under the guise of promoting its technology to the new Government. It is believed that at this meeting the Siemens team promised to loan the government of Ghana USD$100M, to wit, a MOU has been signed and was confirmed at the G20 meeting in Berlin in May, 2017.

Shortly after the visit to the Jubilee House by Siemens, the energy minister, who may have been misled by Siemens and ENI, authorised the Ghana Gas Corporation to stop working on the plan to contract the supply of the third compressor to the Ghanaian company and instead authorised ENI to award Siemens the contract to supply the third compressor. Checks with people in the industry and the petroleum commission point to the minister’s excuse for this conduct being that ENI wants to have the compressors delivered by the end of 2017 so Ghana can secure its first gas in February 2018. However, further checks at the Petroleum Commission seems to point that the third compressor to be supplied by Siemens, that was taken away from the Ghana Company, is due for delivery in May 2018, thereby, raising doubts about the position of ENI that supply by the Ghanaian company will delay gas delivery from the Sankofa field. Although industry watchers are convinced that Siemen’s commitment to loan the country USD$100M influenced the minister’s decision as there was no technical or commercial reasons to award the contract to Siemens. Sources claim protests by the Ghanaian Company to the minister and Ghana Gas have fallen on deaf ears. So the questions which come up are:

Was the Minister’s decision to have ENI award the contract to supply the third compressor to the detriment of an indigenous Ghanaian company to Siemens based on technical and commercial merits?

Was Siemens commitment of USD$100M a mere coincidence to they getting awarded the contract to supply the third compressor or an inducement?

If a Ghana Company can do the job that Siemens is doing, why award the contract to Siemens
Are we now seeing another incidence of corruption by a company (Siemens) with a history of corrupt practices now rearing its ugly head in Ghana’s Oil and Gas sector?

How do we develop our local content if we allow corrupt foreign companies to dominate our industries?

Are we allowing two companies (Siemens and ENI) that have been internationally investigated and charged for corrupt practices come practice their craft here in Ghana while we preach change??

Is the Minister paying lip service to local content even though he keeps preaching it?

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