Petroleum rakes in US$840 million half-year, highest since production started 2010

The government received the highest petroleum revenue for a single half year in 2024 since the start of petroleum production in the country in 2010.

Data from the 2024 Semi Annual Report of the Public Interest and Accountability Committee (PIAC) showed that petroleum receipts for the period increased by 55.6% from US$540.46 million 2023 half year to US$840.77 million in the same period of 2024.

Consequently, crude oil production also increased from 22.45 million barrels in the first half of 2023 to 25.86 million barrels in the same period this year, posting a growth of 10.7 per cent compared to a decline of 13.2 per cent in the previous period.

The significant rise in revenue was mainly due to increased production for the period especially with the coming on stream of the Jubilee South East (JSE) Project.

Sharing findings of the 2024 first half year PIAC Annual Report in Accra on Wednesday(6 November), the new chairman of the PIAC, Constantine Kudzedzi, said provided the country remained on the current path, the upward growth trend was expected to continue to the end of the year.

“Looking at the half year development, if we continue that way there is a likelihood that the overall performance of the year would be better.“ Oil production fluctuates, we have started with 30,000 per day. All things being equal, we can increase depending on the quantity of oil available to produce,” he said.

Surface rental

The chairperson said the surface rental arrears remained high at US$1.2 million excluding that of the terminated petroleum agreement.

“There was neither allocation nor disbursement to the industrialisation priority area during the period under review.

“The retention of the current cap of US$100 million on the Ghana Stabilisation Fund (GSF) for the year 2024 is not in accordance with the formula stipulated in petroleum revenue management regulations, 2019 (L.I. 2381) and does not help build the fund to serve its purpose,” he said.

He said a proper application of the capping formula under L.I 2381 would have returned an amount of US$530.10 million in the reporting period.

Observations

Kudzedzi said PIAC had noted that the Ghana National Petroleum Corporation (GNPC) was yet to establish a reserve fund, a requirement outlined in Section 18 of the Provisional National Defence Council Law (PNDCL 64).

He said this reserve fund was crucial for covering anticipated expenditures in GNPC’s long-term plan, especially considering that petroleum revenue allocations for Level B expenditures might be discontinued in 2026, as stipulated in the Petroleum Revenue Management (PRMA).

He said the committee noted that although the discounted industrial development tariff (DIDT) was suspended by the Ministry of Energy in January 2023, the Ghana National Gas Limited Company (GNGLC) continued to invoice lean gas volumes at discounted tariffs.

He said PIAC identified that no petroleum agreement was signed during the period under review, as it had been since 2018.

“PIAC notes that in comparison to first half 2023, less drilling operations on the Jubilee field were carried out during the period under review,” he added.

Recommendation

The chairperson stated that the Ghana Revenue Authority (GRA) should take immediate steps to recover the outstanding surface rentals and also ensure that surface rentals assessed are paid into the Petroleum Holding Fund (PHF) not later than February 28 of each year, as provided in Regulation 5(1)(b) of L.I. 2381.

He said the GNGLC should comply with the directive of the Ministry of Energy to suspend the implementation of the DIDT.

“The committee urges the Ministry of Finance to demonstrate the essence of prioritisation of the Industrialisation Priority Area by consistently committing disbursement of the ABFA to the Priority Area,” he said.

He added that Parliament should decline or review any cap on the Ghana Stabilisation Fund (GSF) that deviates from the statutory provision and direct the Minister of Finance to comply with Regulation 8 of L.I. 2381.

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