Six years after Ghana started oil production in December 2010, and after progressively increasing production, the country experienced a drop in production in 2016, despite additional oil from the new Tweneboa, Enyenra and Ntomme (TEN) fields which started production in August last year.
According to the annual report of the Public Interest and Accountability Committee (PIAC), which was estabilished by law to monitor and evaluate compliance with how the country manages its oil revenue, says there was a 13.7 per cent year-on-year decline in crude oil production in Ghana during the period under review with annual production dropping from 37.41 million barrels (mmbbls) (102,498 bbls) in 2015 to 32.30 mmbbls [73,955 barrels of oil per day (bopd)].
The report which was launched today in Accra, says, “The decline in production occurred in spite of the fact that Ghana’s second major production field – the TEN Fields – came on stream in August, 2016 and actually contributed 16 per cent (5.32 mmbbls) to annual production.”
The report further indicates that production shortfall would have been approximately 28 per cent but for the addition of the TEN Fields.
It points out that along with the decline in crude oil production, the production of indigenous natural gas also declined by a similar magnitude of 27 per cent (from 52.455.91 MMScf in 2015 to 38,420 MMScf in 2016) compared only with Jubilee gas production and by 14 per cent when compared to the combined production from Jubilee and TEN Fields of 44,780 MMScf.
The report states that the decline in petroleum production in 2016 was caused by a 34-day shutdown of the Jubilee Field for maintenance from March 31 to May 3, 2016.
The report notes that approximately 72 per cent of the gas produced from the TEN Field was flared compared to approximately 23 per cent and six per cent that was reinjected and used as fuel for the FPSO respectively.
During the period under review the Ghana Group lifted 4.86 mmbbls from the Jubilee Field in 2016, representing 18.06 per cent which is consistent with Ghana’s shareholding in the Field.
The sole lifting undertaken by the Ghana Group from the TEN Field in 2016 also represented 18.60 per cent of total lifting made by the TEN partners, it said.
The report further states that Ghana’s crude oil from the Jubilee Field was sold at an average achieved price of $46.13 per barrel which compares favourably with the average dated Brent price of $44.01 as well as the average achieved price of all the other Jubilee Partners (Tullow – $41.7/bbl; Anadarko – $43.93/bbl; and Kosmos – $45.94/bbl).
The other Jubilee Partners, the report says, however were able to sell a portion of their liftings at a higher price as a result of their respective hedging policies with Kosmos and Tullow realising unit prices of $73.76/barrel and $61.7/barrel respectively.
According to the report, actual petroleum receipt in 2016 of $247.18 million was 29 per cent lower than the budgeted amount of $348.42 million and translates to 38 per cent year-on-year decline in annual petroleum revenues when compared to the 2015 receipts of $396.17 million.
It indicates that except for corporate income tax (CIT), which exceeded target, none of the other sources of petroleum revenues achieved set targets.
It however says, only five out of the 18 licence holders paid surface rental during the period under review.
Ninety-two percent or $27.31 million) of total CIT received in 2016 was in respect of tax liabilities that Tullow ought to have paid over the period 2011-2014.
“Only $9.35 million (16.45 per cent) out of total receivables of $56.79 million from the sale of raw gas was paid by the off-taker – Ghana National Gas Company – in 2016. Payment of the outstanding receivables for 2016 would have reduced the revenue shortfall of $101.24 million by 46 per cent while the shortfall would not have arisen had the total outstanding indebtedness of GNGC of $135.49 million been honoured during the period under review,” the report said.
By Emmanuel K. Dogbevi
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