PIAC reports fourth consecutive year of decline in crude oil production in 2023

The Public Interest and Accountability Committee (PIAC) has revealed that Ghana’s crude oil production experienced its fourth consecutive year of decline in 2023.

Speaking at a stakeholder engagement in Ningo-Prampram within the Greater Accra Region, PIAC Chairperson Emerita Professor Elizabeth Ardayfio-Schandorf shared that the country’s oil production decreased from 71.44 million barrels in 2019 to 48.25 million barrels in 2023, marking an average annual decline of 9.2%.

During the presentation of PIAC’s 2023 Annual Report, Prof. Ardayfio-Schandorf emphasized the committee’s recommendation for the government and relevant regulatory bodies to take immediate action to halt the decline in production from existing oil fields and to ensure investment in untapped fields.

The 2023 Annual Report is PIAC’s 25th publication, covering the period from January to December 2023, and aims to provide the public with transparent information on the management and utilization of petroleum revenues.

Prof. Ardayfio-Schandorf detailed that in 2023, a total of 48,247,036.61 barrels of crude oil were produced across three major fields: Jubilee, which contributed 30,444,217 barrels (63% of total production); Tweneboa-Enyenra-Ntomme (TEN) with 6,716,278 barrels (14%); and Sankofa Gye-Nyame (SGN), which produced 11,086,541.61 barrels (23%).

In addition to crude oil, a total of 255,171.97 million standard cubic feet (MMSCF) of raw gas was produced in 2023 from the SGN Field (127,203.02 MMSCF, 50%), the Jubilee Field (77,900.05 MMSCF, 30%), and the TEN Fields (50,068.90 MMSCF, 20%).

The report also highlighted that the average price achieved by the Ghana Group for all three producing fields in 2023 was $78.067 per barrel.

PIAC noted a significant decrease in total revenue paid into the Petroleum Holding Fund (PHF) in 2023, amounting to $1,062,323,419.12, a 25.65% drop from 2022. The Carried and Participating Interest (CAPI) was identified as the largest contributor at 44.31%, followed by Corporate Income Tax (CIT) at 34.38% and Royalties at 20.67%.

The report raised concerns about the non-payment of proceeds from Jubilee Oil Holdings Limited (JOHL) liftings into the PHF for the second year in a row. The cumulative unpaid revenue from JOHL amounted to $343,108,927.88 by the end of 2023.

Prof. Ardayfio-Schandorf reiterated PIAC’s stance that revenues from JOHL and other subsidiaries of the Ghana National Petroleum Corporation (GNPC) qualify as petroleum revenues under the Petroleum Revenue Management Act, 2011 (Act 815) and its amendment in 2015 (Act 893), and should therefore be deposited into the Petroleum Holding Fund.

Regarding the allocation and use of petroleum revenue, the report indicated that the total actual petroleum receipts for 2023 deposited into the PHF were $1,062,323,419.12. Of this amount, $245,588,510.58 was allocated to GNPC, $485,971,963.64 to the Annual Budget Funding Amount (ABFA), and $330,579,098.26 to the Ghana Petroleum Funds (GPFs).

The report also touched on the selection of new priority areas for the use of the ABFA from 2023 to 2025, noting that this process has been necessitated by the absence of a long-term national development plan approved by Parliament. PIAC recommended that the selection of ABFA priority areas should be guided by a long-term national development plan to ensure conformity with the Petroleum Revenue Management Act.

Source:dailymailgh.com