Petroleum receipts double in 2018

A combination of rising production and higher global market prices are giving Ghana direly needed increased revenue. The latest report on petroleum receipts has shown a 94 percent increase in petroleum receipts for 2018 to GH¢4.529.68 million up from GH¢2,334.12 million recorded for 2017.

The 2018 Reconciliation Report on the Petroleum Holding Fund (PHF) attributes the increase mainly to an increase in price from an annual average of US$53.49 per barrel in 2017 to US$70.34 per barrel in 2018 and an increase in lifting volumes from 5,856,921 barrels in 2017 to 9,783,239 barrels in 2018.

The report reconciles the actual total petroleum receipts and the Annual Budget Funding Amount (ABFA) of the previous fiscal year.

Production

Total crude oil production from the three producing fields – Jubilee, TEN and Sankofa-Gye Nyame – in 2018 was 62,770,787 barrels, translating into an average daily oil production of 170,233 barrels (bopd), compared to 58,659,625 barrels (160,711 bopd) for the same period in 2017, representing an increase of 6.55 percent.

The increase in production is attributable mainly to an increased production from the TEN and SGN Fields.

Revenue Distribution

The Ghana National Petroleum Corporation (GNPC) was allocated a total of US$305.27 million, made up of Equity Financing Cost (US$201.10 million) and its share of the net Carried and Participating Interest (US$104.14 million).

A total of US$436.75 million was transferred into the Ghana Petroleum Funds in 2018, compared with US$203.83 million in 2017.

Out of the amount transferred, the Ghana Heritage Fund received US$131.02 million, as against US$61.15 million in 2017, while the Ghana Stabilisation Fund received US$305.72 million, as against US$142.68 million in 2017. The total amount transferred in 2018 from petroleum liftings and related proceeds to the ABFA was US$235.10 million.

In line with Section 23(4) of the Petroleum Revenue Management Act, (PRMA), withdrawals from the GSF were capped at US$300 million in the 2018 Budget. A total of US$283.97 million was consequently withdrawn from the GSF in 2018. In accordance with 23(3) of the PRMA the excess from the GSF not withdrawn – about US$21.69 million – was sent into the Sinking Fund, established to save up money to meet Ghana’s foreign debt repayment obligations.

The PRMA requires that not more than 70 percent of Government’s net petroleum receipts are designated for ABFA and not less than 30 percent designated for the GPFs. Out of the amount transferred into the GPFs, the GHF receives not less than 30 percent, with the rest transferred into the GSF.