It was all grins for the President of the republic, Nana Akufo-Addo, as he opened the valve for Jubilee South First Oil. Yes, the President’s excitement was justified because new oil field means one thing – more revenue.
But the aged question remains – what will the extra revenue from the new oil field be used for? Your guess is as good as mine. Since the discovery of oil in the country, the country has about four operational oil fields and in addition to the newly commissioned one.
Surprisingly, those oil fields did not change the fortune of the citizenry. That notwithstanding, it did change the pockets of the leaders, hence the general consensus that this Jubilee South Oil field will go the same way – ‘chop chop’
On Friday, September 8, 2023, the President graced the FPSO Kwame Nkrumah to activate the valve to mark the official commencement of oil extraction from the Jubilee South Area.
Projections for the Jubilee South-East Area are promising, with an anticipated addition of 30,000 barrels of oil per day to the greater Jubilee Field. This endeavour aims to elevate the total oil production from the Jubilee Field to 100,000 barrels per day by year-end.
The Jubilee South-East Area project stands as a testament to the collaborative efforts of its partners, who have invested a substantial $1 billion into this joint venture.
Borrowing a line from the President’s speech at the brief ceremony, President Akufo-Addo emphasized saying “this milestone is a clear indication of the government’s steadfast commitment to the growth of Ghana’s petroleum industry.”
With the assurance from the President to grow the industry, same must be made for the country so as to use these revenues for economic liberation of Ghanaians.
Revenues the State Derives from the Oil Wells
In the context of revenues the state derives from these oil wells, the latest data indicated that total petroleum revenue that accrued to Ghana in 2022 was the highest for a single year since inception of petroleum production in the country, with a figure of $1.43Billion.
The surge In earnings is in spite of continuing declining of crude oil production for three consecutive years, according to the 2022 annual report by Public Interest Accountability Committee (PIAC).
However, despite all these revenues, coupled with the various developmental taxes levied on the citizenry, Ghanaians are still protesting for social infrastructure – typical example is this week’s #FixTheMotorway protest, demonstrating the huge infrastructure deficit in the country. In sharp contrast, government appointees stash bundles of cash in their bedrooms, further highlighting the long-standing allegations of corruption against public officials.
According to the PIAC report, the 2022 production figure represents the third consecutive year of reduction in annual production volumes since 2010. A volume of 71,439,585 barrels was produced in 2019, but declined to 66,926,806 barrels in 2020, representing 6.32% drop. It further declined to 55,050,391 barrels in 2021 (17.75%) and then to 51,756,481 barrels in 2022 (5.98%). The average decline over the three-year period stood at 10%.
However, there is no doubt that this new oilfield will offset the declines witnessed during these periods and raise production quota to new levels. Coupled to that, Tullow and its partners plan to maintain this increased level of production at Jubilee over the next few years through an ongoing infill drilling program.
The partnership has identified multiple future drilling locations and is focused on high-grading these opportunities to further extend the plateau and realise the full potential of the significant Jubilee resource base. Given the enormity of the impact these revenues could have had on the lives of the citizens if it were put to good use, the earlier the leaders do the right thing, the better for the country.
In as much as Dr Matthew Opoku Prempeh, Minister of Energy, said “The government of President Nana Addo Dankwa Akufo-Addo will continue to work with all our strategic partners with a view to leveraging our God-given resources for the ultimate benefit of our people,” it only shows that Ghana is willing, but it is not yet ready to govern its fledgling oil sector. This is because, without proper governance, the new oil well valve opened by the President may only result in a curse instead of glory.
READ ALSO: Government Settles Pension and Dollar Denominated Bondholders
