TEN Field contributed 16% of total crude oil production in 2016

Ghana’s second major oil production field, the Tweneboa-Enyenra-Ntomme (TEN) Field contributed 16 percent to the annual crude oil production in 2016.

Although, that was a drop from 37.41 million barrels (mmbbls) production recorded in 2015 as compared to 32.30mmbbl production recorded last year.

The TEN production actually cushioned up the total crude oil production for the year 2016, since the Jubilee Field has performed abysmally. The TEN Field came on stream in August 2016.

The Public Interest and Accountability Committee (PIAC) has explained that the crude oil production shortfall would have recorded approximately 28 percent but for the TEN Fields.

Total crude oil production recorded a decline of 13 percent in 2016.

According PIAC, Ghana lifted 4.86mmbbls from the Jubilee Fields in 2016 representing 18.06 per cent which is consistent with the country’s shareholding in the field.

The sole lifting undertaken by the Ghana Group from the TEN Field in 2016 also represented 18.60 percent of the total liftings made by the TEN patrons.

The PIAC report on the management of petroleum revenues showed that, the actual petroleum receipt in 2016 has declined by US$149 million compared to the 2015 proceeds.

In 2015, the revenue from petroleum amounted to US$396.17 million but declined to US$247.18 million in 2016 representing 44% year-on-year decline.

The 2016 decline is also 29% lower than government’s budgeted revenue of $348.42m.

In the 2016 budget statement, the petroleum sector was projected to bring in US$502.10 million based on the projected benchmark crude oil output of US$38.73 million and benchmark price of US$53.05 per barrel.

However, the benchmark revenue for the second half of the 2016 was revised downwards from US$502.10 million to US$348.42 million in the 2016 mid-year budget review when the international benchmark price was further reviewed downward to US$45.35 per barrel.

Although an amount of US$348.42 million was expected from the upstream petroleum sector, the actual receipt fell short of the projected amount while the Finance Ministry attributed the under-performance of the 2016 receipt to lower crude oil price on the world market and the prolonged disruption of production on the jubilee field.

Contrary to the Finance Ministry’s explanation, the 2016 PIAC report shows that 2016 revenue shortfall would have been 46% lower than what was received had all the invoices for gas exported to the Ghana National Gas Company (GNGC) been paid.

Apart from the Corporate Income Tax (CIT) which exceeded target, none other sources of petroleum revenues achieved set targets, he said.

Ninety-two per cent (US$27million) of the CIT received in 2016 was, however, in respect of tax liabilities that Tullow Ghana ought to have paid over the period 2011-2014.

A total of US$229 million, representing approximately 93 percent of total petroleum receipts was allocated during the reporting period.

Mr Mark Agyemang, Technical Manager at PIAC, who presented the sixth annual report of PIAC last week announced that an amount of U$98 million, (about GHC388 million), representing 70 percent of the net amount US$140 million was transferred to the Government of Ghana for further distribution and 42.95 percent of actual disbursement) was transferred to the Annual Budget Funding Amount (ABFA) account in 2016.

The remaining 30 percent (US$42 million) of the amount received by the government to be distributed to the ABFA and Ghana Petroleum Funds (GPF) in 2016 was transferred to the GPF with the Ghana Stabilisation Fund (GSF) receiving US$29 million which is 70 percent and the Ghana Heritage Fund (GHF) receiving US$12 million.

Moreover, the Ghana National Petroleum Corporation (GNPC) in 2016 also received a total revenue allocation of US$88 million, which is 38.64 percent.

At the end of 2016, the total balance in the Petroleum Holding Fund Account (PHF) was US$27 million which comprised undistributed petroleum receipts amounting to US$27.369 million and a mandatory minimum balance of US$200,000.

Meanwhile, four priority areas selected by the Finance Minister to be funded with the Annual Budget Funding Amount from 2017-2019 with their projected 2017 allocations include; Agriculture with a projected allocation of GHC156 million; while Physical Infrastructure and Service Delivery in Education was GHC211 million.

Physical Infrastructure and Service Delivery in Health was also projected to receive an allocation of GHC50 million, with the Road, Rail and other critical infrastructure development pegged to receive an allocation of GHC76 million.

The PIAC was also projected to receive an allocation of GHC1.9 million for the period of 2017-2019.

The report however recommended that GNPC should desist from spending part of its dwindling allocations on non-core businesses such as financing of the Western Corridor Roads.

The GNPC was also asked to disclose what steps it had taken to retrieve the US$50 million loan it advanced to the Ministry of Finance in respect of the Western Corridor Roads.

The report also advised that the ABFA allocation to road infrastructure should continue to be spent on fewer road projects so as to ensure timely completion of beneficiary projects.

The Ghana Revenue Authority (GRA) was asked to ensure that auditing of tax returns filed by the Jubilee Partners was carried out expeditiously so that any additional assessment payable was paid on time.

Source: Adnan Adams Mohammed

 

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