Amid the ongoing disagreement between the Ghana National Petroleum Corporation (GNPC) and the Public Interest and Accountability Committee (PIAC) over the management of the revenues of GNPC Explorco, as former Energy Minister, Dr. Kwabena Donkor, has provided a detailed clarification that challenges the key assumptions of PIAC.
Dr. Kwabena Donkor explains that within the frameworks of the petroleum management and companies laws in the country, ownership automatically does not determine how revenue is treated.
At the centre of the impasse is GNPC Explorco, a subsidiary of the GNPC, and whether its revenues should be classified as public petroleum funds subject to strict state oversight, as argued by the Public Interest and Accountability Committee (PIAC).
However, the former minister, in an exclusive interview with The High Street Journal, maintained that the argument put forth by PIAC is questionable in the face of the law and corporate governance.
The Question of Legal Identity
Dr. Donkor’s argument starts from the legal principle that Explorco is a separate legal entity. Though fully owned by GNPC, Explorco is incorporated under the Companies Act, 2019 (Act 992) as a limited liability company.
This means it operates independently, with its own rights, obligations, and financial structure. He insists that GNPC and Explorco are not one and the same, stressing that ownership does not erase legal separation.
“Explorco is a limited liability company, established under the Companies Act, Act 992. It is a truism that GNPC is the sole shareholder of Explorco. That is a matter of fact. However, Explorco and GNPC are not one and the same. The Petroleum Revenue Management Act restricted itself to GNPC and not to any of its independent subsidiaries that have a legal personality of their own,” he clarified.
What the Law Actually Says
The dispute hinges on the interpretation of the Petroleum Revenue Management Act, 2011 (Act 815) (as amended), which governs how petroleum revenues are collected, managed, and distributed.
According to Dr. Donkor, the law is explicit as it applies to GNPC, and not to its subsidiaries. GNPC, as a public corporation, is required to channel petroleum revenues into the Petroleum Holding Fund. Explorco, however, is not named in the law and therefore falls outside this obligation.
He indicated, “The Act is explicit, limited to GNPC. GNPC is a public corporation. Explorco is a private limited liability company.”
Public vs Commercial: A Structural Divide
He further draw a distinction between GNPC and Explorco. GNPC is publicly funded, operates under parliamentary oversight, and even faces borrowing limits unless approved by Parliament.
However, Explorco is commercially driven, funding its operations from internally generated revenue and managing its own costs. In practical terms, this means Explorco behaves like a business, not a public agency.
“GNPC has to go to Parliament for its budget to be funded by the state on an annual basis. GNPC, according to Act 919, the Petroleum Exploration and Production Law, cannot even borrow beyond a certain amount without going to Parliament. So, GNPC is a very special animal,” he argued.
“Explorco is not publicly funded. Its revenue comes from its operations. And it pays its expenses, its costs, from its revenue. If PIAC or any other person is saying dividends received from Explorco’s activities should go into the petroleum holding fund, that would even look absurd,” he added.
Where PIAC’s Argument Falls Short
PIAC’s concern is rooted in accountability, which states that revenues from state-owned petroleum interests should ultimately benefit the public.
But Dr. Donkor argues that applying this logic to Explorco creates a contradiction. If Explorco’s entire revenue must be paid into the Petroleum Holding Fund, then it effectively loses its commercial independence. It would be treated like a state agency, despite being set up as a private company.
He emphasized that you cannot set up a company under corporate law and expect it to behave like a statutory public entity.
“We cannot set it up under Act 992, the Companies Act, and expect it to behave like an entity set up by an act of Parliament. You cannot eat your cake and have it,” he maintained.
Dividends, Not Direct Transfers
Instead of direct revenue transfers to the Petroleum Holding Fund (PHF), Dr. Donkor points to dividends as the proper mechanism.
If Explorco makes profits, it pays dividends to GNPC as its shareholder. GNPC can then decide how those funds are used within the broader legal framework. This, he suggests, aligns with standard corporate practice and preserves both accountability and operational flexibility.
He noted that, “GNPC happens to be a shareholder. So, GNPC will exercise shareholder rights under Act 992. Explorco’s revenue does not fall under petroleum funds and therefore will not go into a petroleum holding fund. Explorco’s revenue is its revenue.”
A Broader Policy Question
Beyond the legal arguments, Dr. Donkor is concerned that Explorco should have been created as a limited liability company in the first place.
If the intention was to treat its revenues as public funds, then it should have been established by an Act of Parliament, making it subject to the same rules as GNPC.
But having chosen the corporate route, he argues, policymakers must accept the consequences.
Dr. Donkor’s intervention reframes the issue as not whether the state owns Explorco, but whether the legal structure chosen for it matches the expectations now being imposed.
