BoG takes $222.93m from ABFA

The Public Interest & Accountability Committee (PIAC) has revealed that the Central Bank swept an amount of $222.93 million (GHC666.06 million) from the Annual Budget Funding Account (ABFA).

It said $56.69 million was withdrawn from the Ghana Stabilisation Fund (GSF) to compensate for a shortfall in the projected quarterly ABFA for the first quarter of 2015.

“This is the first time such a withdrawal has been made from the GSF for this purpose since the coming into force of the PRMA. However, PIAC is of the view that this withdrawal from the GSF may not have been necessary if the closing balance of the ABFA Account at the end of 2014 of $222.93 million (or GH¢666.06 million) had not been swept by the BoG in assessing the GOG’s financial position for the 2014 financial year.”

Petroleum receipts

It also indicated that total petroleum receipts during the first half of 2015 amounted to $274.47 million compared to $562.48 million received during the same period in the preceding year, adding that the significant decline in revenues, which represented a 56 percent drop in revenue, was attributable to a sharp decline in global crude oil prices which affected all sources of petroleum revenues, especially Corporate Income Tax (CIT).

Surface rental

A surface rental bill of $67,438.36 dating back to February 2013 payable by Oranto/Stone Energy remains outstanding. Surprisingly, there was no record of it in the BoG half-year report even though the payment did not reflect in the list of Surface Rentals paid in the first half of 2015.

Crude oil production from the Saltpond Oilfield continued to decline, dropping from 37,443 barrels during the first half of 2014 to 27,513 barrels over the same period in 2015.

Royalties

No royalties were paid from the Saltpond Oilfield even though 25,453 barrels of oil were lifted from the fields during the period under review.

The Committee found that a minimum of $37,129, being 3% of revenues, ought to have been paid by SOPCL as royalties to the State.

The MoF explained that no royalties was paid by SOPCL because it had been informed by GNPC that SOPCL had ceased operation during the period under review whereas SOPCL reported production of 25,453 barrels of oil in the second quarter of 2015.

Gas sale

From the Western Corridor Gas Infrastructure Project (WCGIP), it said a total of 11,719,783 mmBTU of lean gas, 36,200 MT of LPG and 10,563 MT of condensates were produced and sold by GNGC with sales value of $122.03 million during the first half of 2015.

Total payment received by GNGC during the period stood at $18.40 million while $103.63 million owed by VRA remains unpaid.

Zero revenue

No revenue was received from the gas sector even though 10,606 mmBTU of wet gas valued at $32.60 million was evacuated to the Atuabo Gas Processing Plant.

“This receivable, payable by GNGC, represents approximately 77 percent of revenue expected from gas during the period. This means that the revenue shortfall encountered during the first half of the year would have been six percentage points lower had GNGC honoured its financial obligations to GNPC. GNGC could (or had) not pay GNPC because VRA, the main off-taker of lean gas, is indebted to the company up to the tune of $103.63 million as the end of June, 2015.”

Recommendation

PIAC recommended that the $222.93 million (GHC666.06 million) that was swept by the BoG should be refunded to ABFA account as soon as practicable, just as 30 percent of the Sinking Fund of the $ 100 million that was also swept, was restored by the BoG.

“This would help prevent further withdrawal from the GSF. It is also important to stress that the non-refund of the outstanding balance together with the remaining $70 million of the swept sinking fund would be tantamount to a violation of the PRMA Also, immediate steps must be taken by the GRA and/or BoG to compel SOPCL to pay any outstanding royalties that had fallen due to the State prior to the suspension of its operations.”

It added that Oranto/Stone Energy must be compelled to pay the outstanding surface rental invoice that has been pending since February 2013 with accumulated interest.