Ghana’s petroleum revenue declines by 25.65% in 2023 ..due to production shortfall

Emerita Prof. Ardayfio

Ghana’ share of petroleum revenues for 2023 declined by a 25.65 per cent due to decrease in oil production for the fourth conservative year and lower global prices.

The country earned $1.06 billion last year (2023) as compared to $1.42 billion in the previous year(2022), which was the highest since the country started commercial oil production in 2010.

Emerita Prof Arday Schandorf (left) together with Prof Paul Kingsley Bual Bassual,former PIAC Chair launching the report

Crude oil output from Ghana’s three main fields totaled just 48.25 million barrels last year, a 9.2 per cent annual drop from the 2019 peak of 71.44 million barrels.

This was contained in the 2023 Annual Report of the Public Interest and Accountability Committee (PIAC) Report on use and management of oil revenues launched in Accra yesterday.

“The government and the relevant regulatory bodies should take the appropriate steps to reverse production decline in existing fields and ensure investments in unexploited fields”, the report recommended.

Of the 48.25 million barrels produced last year, Jubilee produced 30,444,217 bbls (63 per cent); Tweneboa Enyenra Ntomme (TEN) – 6,716,278 bbls (14 per cent) and Sankofa Gye-Nyame (SGN) 11,086,541.61 bbls (23 per cent).

According to the report, the factors leading to the drop in produce included the natural decline in production, especially jubilee which started production in 2010; and other technical issues such as equipment upsets in the SGN.

Of the $1.06 million receipt, Carried and Participating Interest (CAPI) was biggest contributor with 44.31 percent, followed by Corporate Income Tax (CIT) and Royalties with 34.38 percent and 20.67 per cent respectively.

The distribution of the receipt paid into the Petroleum Holding Fund (PHF) were that Ghana National Petroleum Corporation (GNPC) received $245,588,510.58; the Annual Budget Funding Amount (ABFA), $485,971,963.64, and the Ghana Heritage Fund (GHF) – $330,579,098.26.

The report disclosed that the total proceeds from JOHL liftings received in 2023, amounting to US$70,456,718.93, were not paid into the PHF for the second consecutive year, bringing the cumulative proceeds of unpaid revenue into the PHF by JOHL to US$343,108,927.88 as at end of 2023.

The PIAC Chair, Emerita Professor Elizabeth Ardayfio-Schandorf, who presented the findings, reiterated PIAC’s position on proceeds from liftings of JOHL and other subsidiaries of GNPC constitute petroleum revenues.

She said within the meaning of the Petroleum Revenue Management Act, 2011 (Act 815) and the Petroleum Revenue Management (Amendment), 2015 (Act 893), the proceeds must therefore be paid into the PHF.