Oil revenue down 56%

Ghana's share of oil revenue from the export of crude oil from the Jubilee Field has so far this year gone down by about 56.2 per cent on year-on-year basis due mainly to the supply glut in the crude oil market.

Managers of the economy are even more disturbed by the disappointing performance of the Saltpond Offshore oilfield, which contributed no revenue to government's coffers - for which reason the Saltpond Offshore oilfield has been shut down and no inflow is expected to come from the field.

According to figures from the Finance Ministry, between January and September this year total petroleum receipts to government's Treasury amounted to $341 million, which is down from the $780 million recorded for the same period last year.

The revenue made from crude oil operations so far this year is the worst recorded for the first nine months of any year since 2013.

The decline in oil revenue, which has caused government to cut its spending for the year, was made worse by the shortfall in production output from the Jubilee Field, which fell to 27,668,675 barrels for the first nine months of this year, as compared to 28,107,990 barrels produced from the field in the same period last year.

Operators of the Jubilee Field say the shortfall in crude oil production was mainly due to technical challenges associated largely with gas compressors on the FPSO, which have since been resolved; and it is expected to ramp up production to its average daily production capacity of 102,000 barrels a day.

The average daily production for this year has been 101,358 barrels, down from the 102,630 barrels of oil per day (bopd) for the same period in 2014.

This brings the total production from inception to the last day of September this year to 157.6 million barrels.

Ghana joined the league of oil-producing countries in December 2010, when the country began production of crude oil in commercial quantities.

Since the first lifting of oil from the Jubilee Field offshore Cape Three Points, this year is the first time that the price at which the Ghana Group sold its liftings from the Jubilee Oilfield has fallen short of expectation.

The average price at which the Ghana Group liftings were sold for the first nine months was US$55,296. This compares unfavourably with the revised Benchmark Revenue price of US$57 per barrel, marking the first time the achieved price has fallen below the projected price since petroleum revenue accounting began in Ghana.

Finance Minister Seth Terkper says the under- performance of petroleum revenues for the year stemmed from the rapid decline in crude oil prices and rigid nature of the Benchmark Revenue (BR) estimation, using the formula set out in the Petroleum Revenue Management Act (PRMA) which did not allow for a revision to the BR once estimated.

However, with the amendment to the PRMA, the BR price was revised from $99.38 per barrel, set in the 2015 budget, to $57 per barrel in the 2015 Mid-Year Review.

The slump in oil revenue this year forced the Finance Minister to cut government's spending by GHC1.5bilIion in a paper presented to Parliament in March this year.