With the inability of the Ghana National Petroleum Corporation (GNPC) to meet its budgeted revenue from loans and guarantees to the government and its agencies, the Public Interest and Accountability Company (PIAC) has urged the company to suspend any plans to give any other loans until significant collections are made from its debtors.
GNPC has an outstanding loan and guarantees amounting to $126.68 million out of a cumulative total of $318.09 million owed to it by the government and its agencies since 2011, according to PIAC.
Additionally, the company is estimated to have spent US$640,292.89 on the Maritime Border Special Project (MBSP) in 2021.
In its 2021 Petroleum Revenue Management Annual Report, PIAC noted that: “Cumulatively, GNPC has spent a total of US$11.85 million on maritime border-related activities, even Ghana is responsible for these activities”.
It was following this development that PIAC called on the GNPC to redouble its efforts to recover loans from the government and its agencies to ensure that the company’s work program does not suffer from non-performance. .
“At this time, GNPC should cease making loans and guarantees until significant collections are made on outstanding loans and guarantees owed to the company,” PIAC said in its latest report.
In addition, the report also revealed that the Petroleum Commission (PC) has, since 2021, terminated the petroleum agreements of some four international oil companies operating on the Deepwater Tano Cape Three Points block for non-performance.
This includes Swiss African Oil Company Limited – SWAOCO, UB Resources, Brittania U and Sahara Energy Fields Ghana Limited.
However, despite the termination, these four companies represent approximately 73% of an ongoing surface rent of US$2.57 million.
PIAC revealed that surface rent arrears increased by 22.22% from US$2.11 million in 2020 to US$2.57 million in the 2021 year under review.
While the committee commended the Petroleum Commission for terminating the agreement of four contractors for non-performance, it urged the commission to ensure strict compliance with minimum labor obligations by international oil companies.
During the year under review, the average crude oil price of US$69.18 per barrel (bbl) achieved by the Ghanaian group across the board was above the government benchmark price of US$54.75/bbl.
However, annual crude oil production decreased by 17.7% from 66,926,806 barrels in 2020 to 55,050,391 barrels in 2021, despite the rebound in economic activities in 2021, following the easing of COVID-related restrictions. -19.
Total oil revenue increased by 17.5% from $666,390,751.22 in 2020 to $783,325,849.87 in 2021 due to higher crude oil prices. This is despite lower crude oil production in 2021, PIAC’s report says.
Furthermore, it emerged that after a 3-year pause, allocations to the Ghana Infrastructure Investment Fund resumed in 2021, amounting to US$49.39 million, following the adoption of the Ghana Infrastructure Investment Fund (Amendment) Act 2021 (Act 1063).
Among other recommendations, PIAC called for strict compliance with the Supreme Court’s 2019 ruling in Kpodo v. Attorney General, which stipulates that 5% of the ABFA will be allocated and paid into the Common Assembly Assemblies Fund. district (DACF).
This follows the payment of GH¢32.38 million to the DACF, for the first time since Ghana began collecting oil revenues in 2011, due to the 2019 Supreme Court ruling.
However, the disbursement made was 1.74% of the ABFA, instead of the 5% specified in the Supreme Court ruling.
However, PIAC requested the Ministry of Finance to provide a breakdown of disbursements to the DACF and report to PIAC.
In the meantime, he said, “The Ministry of Finance, in collaboration with relevant institutions, should develop appropriate guidelines on the use and reporting of disbursed ABFAs to DACF.”