Crude oil production declines in 2022, but revenue hits record high of $1.42bn
Ghana’s revenue from crude oil production hit a record high in 2022, despite a marginal decline in crude oil production for the year, according to the Public Interest and Accountability Committee’s (PIAC) 2022 Annual Report. The country earned $1.42 billion from oil production, which is the highest annual revenue since the country began oil production in 2011. The PIAC report reveals that the country earned a cumulative $8.79 billion from the production of oil, including taxes and other interest payments from the three major oil fields, namely Jubilee, Sankofa, and Tweneboa, Enyenra, and Ntomme.
However, the report shows that crude oil production fell marginally to 51,756, 481 barrels in 2022 from 55,050,391 barrels in 2021, representing a 6% decline in production. The decline is attributed to some technical challenges encountered on the field reported by the partners. The report also indicated that there has been an average decline of about 10% in the production since the last three years, partly attributed to the Covid-19 pandemic and other geopolitical concerns.
Surface Rental Arrears Continue to Rise
The PIAC report also highlights that there has been an increase in the arrears for the surface rental payment from some international oil firms, especially those whose contracts have been terminated. Surface rental arrears continue to rise, as it increased to $2.77 million in 2022, about a 65% increase over the previous year. This situation may cause financial challenges for the government, which could impact investment in other sectors of the economy.
Ghana’s Oil Revenue Management
The PIAC report also provides an overview of Ghana’s oil revenue management. The report emphasizes the need for transparency and accountability in the management of oil revenue. It calls for the government to adopt measures to improve oil revenue management and transparency, such as publishing the annual reports of the Petroleum Commission and other relevant state institutions. The report also recommends the government to ensure the timely payment of surface rental fees by oil companies to avoid accumulation of arrears.
Ghana’s crude oil production may have declined in 2022, but the country earned a record high revenue of $1.42 billion. The decline is attributed to some technical challenges encountered on the field reported by the partners, as well as geopolitical concerns and the Covid-19 pandemic. While the country’s oil revenue is a significant source of income for the government, it is important to manage it transparently and accountably to ensure its sustainability and avoid future challenges.
