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Ghana exceeds US$2billion revenue from oil

  • SOURCE: | qwesa2big
  • tullow oil_0After three years of commercial production of oil on the Jubilee fields, Ghana has now exceeded the long awaited two billion revenue mark.

    Since 2010 when Ghana started producing oil in commercial quantities, stakeholders in the sector, namely, Tullow oil, Kosmos Energy, Anadarko, Government of Ghana and Sabre, have produced 86.93 million barrels of oil and Ghana’s share of production has been 16.5 million barrels.

    In 2011 the country realized a sum of US$470 million from Production. The figure increased to US$567million in 20012 and US$730 million from oil production. In the first half of 2014 Ghana has already generated US400 million from the projected US$ 820 million for the year, bringing the total revenue from oil to US$2.167 billion. Ghana is likely to exceed this year’s projection as a result of the introduction of the flaring system enabled by the government of Ghana over a period the re-injection of associate carbon into the oil wells to speed oil flow.

    As a result of a redetermination of the Jubilee Field’s Original Hydrocarbon in Place (OHIP) across the Deep Water Tano and West Cape Three Point Blocks, Ghana’s share of petroleum declined slightly under the Unit Operating Agreement from 13.75% to 13.64%.

    Redetermination is a process by which owners in a unit agreement commit that at one or more dates in the future, they will revisit the unit interest due to information received from new wells or production data, and where appropriate, adjust the Tract Participations to reflect the proportion of the reservoir and associated hydrocarbons that underlie their participation arising from the new data.

    Pursuant to the terms of the Jubilee Field Unitization and Unit Operating Agreement (UUOA), the percentage share of petroleum of the Jubilee partners is subject to a process of redetermination. Any party to the Jubilee UUOA with more than a 10% Jubilee Unit Interest may call for a second redetermination after December 1, 2013. The redetermination of the blocks led to the distribution (tract participation) of the OHIP of 50% each from the two Blocks to be realigned to tract participation within the unit area in a ratio of 45.6334% for the Deep Water Tano Block (DWT) to 54.3666% for the West Cape Three Point (WCTP) Block instead of the original 50% each of the two blocks. This exercise has affected Ghana?s Participating Interest by a small margin reducing the country?s entitlement to oil under Carried and Participating Interest to 13.640% instead of the original 13.75% 1 This took effect from 1st December, 2011.

    The Ghana Revenue Authority assessed Tullow Oil Ghana for petroleum income tax in the 4th Quarter of 2012 on a taxable income of US$114,885,998. The tax liability of US$40,210,099.56 was discharged in January 2013 and it is therefore being accounted for by the GRA as part of 2013 taxes collected.
    The GRA was unable to assess and collect any Capital Gains Tax (CGT) on the assignment of interest transactions that took place during the year between EO Group and Tullow Oil as well as Sabre Oil and Gas and PetroSA. This was because current tax laws affecting operations in the upstream petroleum sector contain no provisions for CGT.

    The Jubilee and Saltpond Fields were the only producing fields in 2013. The total number of barrels produced from the Jubilee Field for the period, January to September 2013, was 27,060,737 barrels, compared with 18,423,621 barrels for the corresponding period in 2012. As indicated in the 2013 national budget ,production forecast for the Jubilee Field, , was 30,419,465 barrels, based on an average production of 83,341 bopd.

    The average daily Jubilee production from January to September 2013 was 102,503 bopd and it is expected that the projected production volume for 2013 will be achieved, in spite of the shutdown for planned maintenance of the FPSO that took place from 20th to 28th September, 2013.

    The main factor that accounted for the increased production in 2013 was the increased number of producing wells on stream in the Jubilee Field, since the number of producing wells commissioned has a direct impact on the production volumes. The producing wells were increased from three (3) in 2010 to twelve (12) in 2013.

    The total barrels of oil produced from the Saltpond Field for the period January to September 2013, was 78,376 barrels, compared with 77,374 for the full year of 2012.

    The average achieved Jubilee price for January to September 2013 was US$107.246 (where achieved price means the price at which the Ghana Group liftings were sold)

    For the period January to September 2013, GNPC lifted crude oil five (5) times on behalf of the State. This involved 4,977,922 barrels of oil which yielded US$533.86 million (GH?1,025.05 million) of petroleum revenue to the State, as shown in Table 3.

    Total petroleum receipts (i.e. proceeds from Jubilee lifting’s and other petroleum receipts) as at the end of the third quarter of 2013 was US$707.28 million (GH?1,358.18 million). This compares with a total 2013 Budget estimate of US$581.72 million (GH?1,122.72 million)
    In spite of all the growth in revenue from the exploration, Ghana’s share of the Jubilee revenue lack the pace for growth and government is being asked to ensure that revenues are well accounted for.

    Story by Kwabena Adu Koranteng

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