Coronavirus: Oil sector suffers GH¢5.7 billion loss in revenue

The Chief Executive of the Petroleum Commission, Egbert Faibille Jnr., has disclosed Ghana lost GH¢5.7 billion (US $1.04 billion) in oil and gas revenue following the coronavirus pandemic.

Mr Faibille indicated that just like the adverse effect of COVID-19 which is crippling the economy, the upstream oil and gas sector continues to suffer extensively as a result of the mishap.

He made this known at the opening session of a three-day virtual conference organised by the Africa Centre for Energy Policy (ACEP).

According to him, “the industry had suffered significant shocks which did not only affect the economy but also impact on work obligations and operations adding that the shortfall in revenue was very significant and that companies had to invest heavily to enable staff to work remotely to keep the industry running.”

The virtual conference was themed, “The Impact Of COVID-19 in the operations of upstream oil and gas companies in Africa and surviving strategies: The regulator’s perspectives.”

Against this backdrop, Mr Faibille said an initial impact analysis on the sector showed an expected decline in growth rate of Gross Domestic Product (GDP) from 6.8% to 2.6%.

He said although oil production was ongoing, revenue forecasts for the year had been significantly affected, largely due to the postponement of the Pecan Development Campaign.

Mr Faibille in his address noted that although the oil industry regulator has attracted quite a number of investors after the first licensing round and looked forward to the next bidding to acquire blocks, the Petroleum Commission worries most of the entrants have had to be put on hold as a result of coronavirus pandemic.

He further warned of a delay in the country’s second licensing round as the government “prioritises managing the domestic impact of the virus and waits for investment conditions to improve.”

Explaining what the situation will mean for the country, Mr Fabille said “Looking further ahead, the Commission expects that licensing round activities will be subject to significant uncertainties, stemming both from the unknown length of the COVID-19, demand shock and the duration of the current excess supply,” he stated.