Ghana’s Public Interest and Accountability Committee (PIAC) is preparing to pursue legal action against the Ghana National Petroleum Corporation (GNPC) over $488 million in unpaid oil revenues, escalating a dispute rooted in conflicting interpretations of the country’s petroleum revenue laws.
The funds, which include $145 million from 2024 oil liftings by GNPC subsidiary Explorco and additional amounts tied to Jubilee Oil Holdings Limited, have not been remitted to the Petroleum Holding Fund (PHF), a national account mandated to manage oil proceeds for public benefit.
PIAC Chair Constantine Kudzedzi emphasized the committee’s stance during the launch of its 2024 annual report, stating, “Proceeds from Explorco’s liftings represent the state’s indirect participation and must be paid into the PHF.” GNPC, however, disputes this interpretation of the Petroleum Revenue Management Act (PRMA), arguing that Explorco’s commercial activities fall outside the PHF’s scope. Kudzedzi indicated that judicial intervention may be necessary to resolve the impasse. “We have thoroughly analyzed the law and maintain our position. If GNPC remains opposed, the courts must clarify what constitutes petroleum revenue under the PRMA,” he said.
The PRMA, enacted to ensure transparent management of oil revenues, requires all funds from petroleum sales to flow through the PHF. PIAC’s report underscores that Explorco’s earnings qualify as state revenue under this framework. The disagreement highlights ongoing challenges in Ghana’s efforts to enforce accountability in its oil sector, where legal ambiguities frequently spark institutional clashes.
Debt Transfer Risks to GNPC Subsidiary
Beyond the revenue dispute, PIAC raised alarms over GNPC’s transfer of sovereign debt obligations to Explorco, including liabilities linked to government-backed agreements with Karpowership and Litasco. The report warns that burdening Explorco with state-related debt could undermine its role as GNPC’s independent commercial arm, designed to sustain the corporation once PHF funding ceases. “Loading Explorco with legacy liabilities risks its financial health and contradicts its purpose,” the report stated.
Legislative Reform
To prevent further exposure, PIAC urged Parliament to enact laws prohibiting GNPC and its subsidiaries from assuming government-guaranteed debts. This recommendation aligns with broader calls to shield state-owned enterprises from politically driven financial risks, a recurring issue in Ghana’s resource management sector.
Ghana’s oil governance framework has faced similar disputes in recent years, reflecting systemic gaps in revenue transparency. A 2022 PIAC report previously flagged $284 million in unremitted PHF funds, prompting calls for stricter enforcement.
The current standoff could set a precedent for how Ghana balances corporate autonomy with public accountability as it seeks to optimize benefits from its hydrocarbon resources. With oil contributing approximately 8% of Ghana’s GDP, the outcome holds significant implications for fiscal stability and public trust in resource management.
