The Ghana National Petroleum Corporation’s expenditure on various line items, mainly administrative expenditure and capital projects, has witnessed significant increases by more than 200 percent, according to the 2022 Annual Report by the Public Interest and Accountability Committee (PIAC) on government’s oil revenue.
Despite petroleum revenues recording a historic high in 2022, PIAC recommends that GNPC manages its expenditure and builds buffers against volatilities in petroleum revenue inflows in the future.
In 2022, GNPC received US$38,835,537.56 as gas commodity revenue from the Cash Waterfall Mechanism (CWM), which constitutes petroleum revenue. However, this amount was not paid into the Petroleum Holding Fund (PHF).
PIAC also notes that GNPC continues to fund the construction of roads in the Western Corridor Enclave, constituting quasi-fiscal expenditure that should be the primary responsibility of the central government and not the National Oil Company (NOC). The total expenditure by GNPC on these roads since 2014 is US$124.66 million.
PIAC reiterated its call for GNPC to focus on its core mandate and for the government to desist from borrowing or requesting GNPC to make advances and guarantees on behalf of government and its agencies.
PIAC further notes that GNPC is using the Jubilee Oil Holdings Limited (JOHL) to carry out operations not approved in GNPC’s workplan, such as Explorco cash calls on Springfield, ENI Block 4, and SOPCL decommissioning, amounting to US$5,546,419.12 and US$11,000,000.00, respectively.
Total lifting proceeds received by JOHL, a subsidiary of GNPC, for 2022 amounted to US$272,652,208.95.
Despite calls by PIAC that revenues of JOHL constitute petroleum revenue and should be paid into the PHF, GNPC disagrees and continues to use the lifting proceeds of JOHL for other expenditures.
PIAC recommends that crude oil receipts by JOHL should be paid into the PHF since it forms part of Ghana’s petroleum revenue.
Total expenditure on the Saltpond decommissioning amounted to US$26.64 million in 2022, which is US$3.23 million more than the US$23.41 million approved in the 2022 Workplan of Operations of the Ghana National Gas Company (GNGC).
PIAC in the report said although GNGC generates some revenue from the sale of processed gas, it has been unable to settle its indebtedness to GNPC for raw gas supplied because of the zeroed policy introduced by the government to subsidize its portion of the CAPI of the gas. Apart from the payment of gas revenue in 2015 by GNPC, there have been no further gas payments into the PHF.
