Ghana’s crude oil production has been on a continuous downward trajectory, with the latest figures from the Public Interest and Accountability Committee (PIAC) revealing a significant decline in 2023.
According to PIAC, the country’s crude oil production has decreased for the fourth consecutive year, dropping from a peak of 71.44 million barrels in 2019 to 48.25 million barrels in 2023. This represents an annual average decline of 9.2%, raising concerns about the future of Ghana’s oil industry.
The Chairperson of PIAC, Emerita Professor Elizabeth Ardayfio-Schandorf, disclosed these figures during a stakeholder engagement event held in Ningo-Prampram in the Greater Accra Region. Presenting the 2023 Annual Report of PIAC, Professor Ardayfio-Schandorf highlighted the urgent need for the government and relevant regulatory bodies to take decisive steps to reverse the declining production in existing oil fields and to encourage investment in unexplored fields.
The 2023 Annual Report, which is PIAC’s 25th publication, covers the period from January to December 2023. It serves as a critical document for providing the public with insights into the management and utilization of Ghana’s petroleum revenues. The report’s findings have sparked discussions about the sustainability of the country’s oil production and the economic implications of the continued decline.
Breakdown of Crude Oil Production
In 2023, a total of 48,247,036.61 barrels of crude oil were produced from Ghana’s three major oil fields. The Jubilee Field, which remains the largest contributor, produced 30,444,217 barrels, accounting for 63% of the total production.
The Tweneboa-Enyenra-Ntomme (TEN) Field contributed 6,716,278 barrels, representing 14% of the total output, while the Sankofa Gye-Nyame (SGN) Field produced 11,086,541.61 barrels, making up 23% of the total production.
The report also noted the production of raw gas, with a total of 255,171.97 million standard cubic feet (MMSCF) produced in 2023. The SGN Field led in gas production with 127,203.02 MMSCF (50%), followed by Jubilee with 77,900.05 MMSCF (30%), and TEN Fields with 50,068.90 MMSCF (20%).
The decline in oil production has also been reflected in the revenue generated from the sector. PIAC reported that the total revenue paid into the Petroleum Holding Fund (PHF) in 2023 amounted to $1,062,323,419.12, marking a 25.65% decrease from the previous year. The Ghana Group, which manages the country’s stake in oil production, achieved an average price of $78.067 per barrel across all three producing fields during the review period.
A significant portion of the revenue came from Carried and Participating Interest (CAPI), which contributed 44.31%, followed by Corporate Income Tax (CIT) at 34.38%, and royalties at 20.67%. However, PIAC raised concerns about the non-payment of proceeds from the Jubilee Oil Holdings Limited (JOHL) liftings into the PHF for the second consecutive year. This non-payment has resulted in a cumulative shortfall of $343,108,927.88 as of the end of 2023, which PIAC insists should be addressed promptly.
Recommendations and the Way Forward
In light of these challenges, PIAC has made several recommendations to address the ongoing decline in crude oil production and the associated revenue shortfalls. The committee emphasized the need for the government to prioritize investment in existing and new oil fields to reverse the production decline.
Furthermore, PIAC reiterated its stance that all proceeds from JOHL and other subsidiaries of the Ghana National Petroleum Corporation (GNPC) should be paid into the PHF, in accordance with the Petroleum Revenue Management Act, 2011 (Act 815) and its amendment in 2015 (Act 893).
The report also touched on the allocation and utilization of petroleum revenue. It noted that the total actual petroleum receipts for 2023 were distributed among several key areas, with the Ghana National Petroleum Corporation (GNPC) receiving $245,588,510.58, the Annual Budget Funding Amount (ABFA) receiving $485,971,963.64, and the Ghana Petroleum Funds (GPFs) receiving $330,579,098.26.
PIAC also highlighted the need for a long-term national development plan, approved by Parliament, to guide the selection of priority areas for the utilization of the ABFA. Currently, the use of the ABFA is guided by a medium-term development strategy, which PIAC argues is insufficient for ensuring sustainable development. The committee recommends that the government move towards establishing a long-term plan to better align the use of petroleum revenues with the country’s broader development goals.
Meanwhile, the recommendations put forth by PIAC provide a roadmap for addressing these challenges, but swift and decisive action will be necessary to reverse the current trends and secure the country’s economic future.
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