Oil

Ghana has failed to achieve the targeted oil revenue of GH¢1.250 billion for 2011 as the nation has only raked in GH¢666 million from the commodity.

This represents a shortfall of GH¢583 million, which the Jubilee partners have attributed to the inability of the Jubilee field to produce the estimated 120 barrels of oil daily.

The figures were disclosed by the Public Interest and Accountability Committee, an independent body in Accra, yesterday, in its maiden annual report for 2011 on the Management of Petroleum Revenue.

The Chairman of the 30-member committee, Major Daniel Ablorh-Quarcoo, stated that out of the total receipt, an amount of  GH¢315.390 million, representing 47 percent was transferred to the Ghana National Petroleum Corporation while GH¢250.432 million went into budget spending.

The amount allocated to the annual budget, stabilization fund and heritage fund was less than the targets of GH¢395,980,000.7, GH¢111,915,435 and GH¢613,195,95.

Major Ablorh-Quarcoo said the Ghana National Petroleum Corporation (GNPC) lifted a total of 3.930 million barrels of oil, representing 16.1 percent of total oil production of 24.5 million barrels in 2011 while the Jubilee Partner lifted 20.5 million barrels representing 83.9 per cent.

According the committee, there was a deviation from the requirement of Act 815, Section 23(1) (B) of Ghana’s law which spells out how the oil revenue should be distributed to the Ghana Petroleum Funds made up of the Stabilisation Fund and Heritage Fund.

Act 815 Section 23(1) (B) states that “A minimum of thirty percent of the excess revenue determined in subsection (1) (A) shall be transferred into the Ghana Heritage Fund and the balance shall be transferred into the Ghana Stabilization Fund every quarter.

Yet, the report states that the Ghana Petroleum Funds received revenues less than what were required by the law.

Also, not all payments in terms of taxes expected from the oil industry were realized.

In the area of corporate tax, the Ghana Revenue Authority is yet to receive revenue from operators yet to recoup their pre production cost.

Ghana’s law permits the oil companies to recover 20 percent of what was invested, and according to the Jubilee partners they had invested a total amount of $4 billion which could be recouped over the next four to five years before they start paying corporate taxes.

The committee recommended that the GNPC release an interim report on what it used the 47 percent of the oil revenue it received for.

The committee also impressed upon government to expedite action on the processes needed for the development of a nationally owned long-term development plan in line with the provision of Act 815.

It cautioned the Ministry of Finance and Economic Planning to go by the methodology spelt out in the bench marks as required by the Petroleum Revenue Management Act.

Members of the Public Interest and Accountability Committee are selected from I3 organizations made up of the Clergy, Ghana Bar Association, Trades Union Congress, Ghana Journalists’ Association, Institute of Chartered Accounts and traditional leaders.

They are expected to provide an independent assessment of how petroleum revenues are managed and used in the country in line with the requirement of the Petroleum Revenue Management Act.

 By Emilia Ennin Abbey

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