Saturday, 27 February 2021

Over US$322mn received in oil revenues for H1 2020


  

Adnan Adams Mohammed

The Public Interest and Accountability Committee’s (PIAC) data indicates that, total petroleum receipts into the Petroleum Holding Funds (PHF) for the first half (H1) of 2020 stood at US$322,571,265.64, indicating 11.32 percent decline as against the previous period.

According to the data as contained in 2020 semi-annual the report, the Carried and Participating Interest (CAPI) of the Government of Ghana and Ghana National Petroleum Corporation (GNPC) contributed the highest portion of 40 percent to total receipts.

The report further indicated that, even though GNPC received GH¢110.96 million under the Cash Waterfall Mechanism, there was no payment into the PHF in respect of raw gas supplied. However, the Committee showed worries at the situation of the lingering institutional shoulder-rubbing between the GNPC and Ghana Gas Company leading to the accumulating non-payment of raw gas supplied to Ghana Gas from the oilfields.

“Consistently, the non-payment of gas revenue denies the PHF of its due entitlement”, the report signed by Noble Wadzah, PIAC Chair, and released last week agitated.

Despite, this unfortunate development, cumulative raw gas production increased significantly by 65 percent; the highest recorded half-year volume of gas produced since 2010.

The reported noted that, all the three producing Fields (Jubilee, TEN and SGN) recorded an increase in gas production, with the SGN Field recording a 130 percent increase attributable to stable production operations.

The average unit price achieved by the Ghana Group in all three Fields (US$42.49/bbl) were significantly lower than achieved unit prices in H1 2019 (US$65.08/bbl), representing a 34.71 percent decline.

For almost a decade of production, Ghana’s petroleum industry has developed steadily despite the drop in international oil prices since late 2014. The petroleum industry continues to attract key global industry players on the back of sustained investor interest, as well as significant de-risking of the Western Basin. This was evident in 2019 Licensing Rounds Bids and Negotiations. Despite these gains, the first half of 2020 proved to be a challenging period.

The 2020 Semi-annual Report is in fulfilment of PIAC’s statutory obligation under the Petroleum Revenue Management Act, 2011 (Act 815), as amended by Act 893, to publish Semi-annual and Annual Reports. This report is a reconciliation of data supplied by stakeholder institutions, and an independent assessment of the collection, management, and use of the country’s petroleum revenues for the period of January – June 2020.

This year’s delay in releasing the 2020 PIAC reports was largely due to the outbreak of Covid-19, which disrupted work activities of reporting entities. The delay in the release of data by some institutions was also a factor. However, it is the expectation of the Committee that the general public will meticulously read the Report and provide feedback especially during public engagements to be held following the release of this semi-annual Report.

Since its establishment in September 2011, the Public Interest and Accountability Committee, (PIAC), has effectively exercised its oversight responsibility for monitoring and evaluating the management of Ghana’s petroleum resources by the government and stakeholder institutions.

In compliance with provisions of the Petroleum Revenue Management Act (PRMA), the Committee prepares statutory Annual and Semi-Annual Reports, which aim at keeping Ghanaians and other interested stakeholders constantly informed of how the country’s petroleum revenues are managed and utilised. The Reports also provide the basis for public engagements and the collation of citizens’ feedback, which is subsequently shared with the duty bearers.

The Committee since its inception has published a total of 18 reports – nine (9) Annual and nine (9) Semi-Annual Reports - covering the period 2011 to June 2020, with information and data from the Ministry of Finance, Bank of Ghana, Petroleum Commission, Energy Commission, Ghana National Petroleum Corporation, Ghana Revenue Authority, Ghana National Gas Company and International Oil Companies.

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