Ghana bags $US5.2bn in oil money since 2011- NRGI report
Adnan Adams Mohammed
Data available indicate that since Ghana's first oil cargo lifting (sales) in 2011, about 73 cargos have been sold to date.
This has given the country total revenue of about US$5.2 billion(US$5,181,155,299) in oil money for total volume of 71,120,148 bbls, the Natural Resource Governance Institute (NRGI) has said in its newest report on Ghana's oil industry.
From this, 9% of government's revenue in 2019 was from GNPC’s oil sales in value of US$938 million. Around US$802 million of this amount, or 86%, came from cargos of oil sold by GNPC. The NRGI report titled "Ghana’s Oil Sales: Using Commodity Trading Data for Accountability" demonstrates how these data can be used by civil society organizations (CSOs), government officials, journalists and other oversight actors to hold the government, GNPC and trading companies accountable.
“Our research demonstrates the importance of the
government’s long-term sales contracts as a source of government revenues,”
says Denis Gyeyir, a co-author of the report and the NRGI Africa Program
Officer.
However, he called on the Ghana government to disclose its
long-term sales contracts agreements.
“The precise terms within long-term sales contracts
agreements, such as those signed with Unipec Asia and Litasco, are very
important in determining whether they represent a good deal for the country. We
commend the government for its release of information on the terms of the
agreement with Unipec Asia, but officials should disclose the long-term sales
contracts with both Unipec Asia and Litasco in their entirety, and commit to
disclosing any future similar agreements.”
The coronavirus pandemic and oil price crash have hit this
important source of government revenue hard, with the funds received for
similarly-sized cargoes sold by GNPC dropping from $126 million in 2012 to just
$12 million in April 2020.
“The impact of the coronavirus pandemic and oil price crash
on Ghana’s economy means that ensuring GNPC maximizes its oil sales revenues is
more important than ever,” says Nafi Chinery, West Africa manager for NRGI.
“Oil sales transparency on the part of GNPC and the government has been an
important step toward enabling citizens groups to demand effective and
accountable management of revenue flows. Information on Ghana’s long-term sales
contracts tied to resource-backed borrowing is especially important in the
context of broader debt relief and renegotiation discussions.”
Two international oil traders operating in Ghana, Trafigura
and Glencore, have disclosed their payments to the state. However, no company
has provided payment data disaggregated by cargo, which NRGI maintains is
necessary if citizens are to use this data for accountability purposes.
“Commodity traders purchasing the state’s oil in Ghana
should follow the example of the government and GNPC and disclose information
on their purchases on a cargo-level basis,” says Alexander Malden, co-author of
the report. “We call on traders to disclose cargo-specific payments to GNPC
using the new Extractive Industries Transparency Initiative (EITI) Guidance for
buying companies and relevant template in order to build citizen trust in and
understanding of this often opaque activity.”
The report, which indicated that, Ghana is one of the most
transparent countries in reporting on its commodity trading activities, praised
Ghana National Petroleum Corporation (GNPC), the Ministry of Finance, the Bank
of Ghana, the Public Interest and Accountability Committee and Ghana Extractive
Industries Transparency Initiative for disclosing information on the state’s
oil sales activities.
While Ghana is a new oil producer, oil sales are already a
significant source of government revenue. Significance of oil sales to
government revenue likely to increase as more production comes online.
A presentation on the NRGI findings pointed, at least, four
reasons why crude oil trading sector is particularly susceptible to corruption
and the reasons Involves large financial
transactions, with the average cargo being around 950,000 barrels and able to
cost well over USD 100 million; and State owned enterprises (SOEs) often have a
great deal of discretion in conducting a state’s commodity trading activities,
creating opportunities for individuals to abuse their public position for
private gain.
Other reasons are: Sector remains highly opaque and less
scrutinized than a state’s extractive activities; and Trading transactions are
not subject to the same regulations or international standards as upstream
activities.
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