Ghana’s Petroleum Revenue Hits Record High in First Half of 2024

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Petroleum
Petroleum

In an unprecedented financial upturn, Ghana’s government reported a significant surge in petroleum revenue, amassing $840.77 million in the first half of 2024—the highest since the nation commenced oil production in 2010.

This figure represents a 55.6% increase from the $540.46 million recorded during the same period in 2023, as detailed in the 2024 Semi-Annual Report by the Public Interest and Accountability Committee (PIAC).

The substantial rise in revenue is primarily attributed to a boost in crude oil production, which escalated from 22.45 million barrels in the first half of 2023 to 25.86 million barrels in the corresponding period of 2024, marking a 10.7% growth. This positive trend contrasts with a 13.2% decline observed in the previous year. The initiation of the Jubilee South East (JSE) Project has been identified as a key driver of this increased output.

PIAC’s chairman, Constantine Kudzedzi, expressed optimism about the country’s petroleum sector trajectory. “Looking at the half-year development, if we continue that way, there is a likelihood that the overall performance of the year would be better,” Kudzedzi stated during a briefing in Accra. He emphasized the potential for further production increases, contingent on available resources.

Despite these gains, PIAC’s report highlighted ongoing challenges, notably the persistent issue of surface rental arrears, which remain high at $1.2 million, excluding amounts from terminated petroleum agreements. Additionally, the report noted that no new petroleum agreements were signed during the review period, continuing a trend observed since 2018.

The committee also raised concerns about the Ghana National Petroleum Corporation’s (GNPC) delay in establishing a reserve fund, as mandated by Section 18 of the Provisional National Defence Council Law (PNDCL 64). This fund is deemed essential for covering anticipated expenditures in GNPC’s long-term plans, especially considering that petroleum revenue allocations for Level B expenditures might cease in 2026, as outlined in the Petroleum Revenue Management Act (PRMA).

Furthermore, PIAC observed that despite the Ministry of Energy’s suspension of the discounted industrial development tariff (DIDT) in January 2023, the Ghana National Gas Limited Company (GNGLC) continued to invoice lean gas volumes at discounted rates.

In light of these findings, PIAC recommended that the Ghana Revenue Authority (GRA) take immediate action to recover outstanding surface rentals and ensure timely payments into the Petroleum Holding Fund (PHF) by February 28 each year, as stipulated in Regulation 5(1)(b) of L.I. 2381. The committee also urged the Ministry of Finance to prioritize the industrialization sector by allocating portions of the Annual Budget Funding Amount (ABFA) to this area consistently.

As Ghana’s petroleum industry experiences record-breaking revenues, PIAC’s report underscores the importance of addressing existing challenges to ensure sustainable growth and equitable distribution of resources.

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