Ghana earned $783m in revenue from oil production in 2021 – PIAC
The Public Interest and Accountability Committee (PIAC) has revealed that Ghana recorded $783 million in revenue from oil production in 2021.
PIAC noted that the increase in revenue was due to the high cost of crude oil prices on the global market.
The $783 million represents a 17.5% increment in revenue from the $666 million recorded in 2020.
Despite an increase in the turnover of oil production, the volume of barrels of crude oil reduced in the year ending 2021.
Annual crude oil production declined by 17.7 percent from 66,926,806 bbls in 2020 to 55,050,391 bbls in 2021, despite the rebound in economic activities in 2021, after the easing of COVID-19 restrictions.
Furthermore, the report, disclosed that for the year under review, the average achieved crude oil price of $69.2 per barrel by the Ghana Group in all fields was higher than the government’s benchmark price of $54.8 per barrel.
PIAC’s report further disclosed that four of the 18 subsisting Petroleum Agreements have been terminated by the Petroleum Commission in 2021 for non-performance in their minimum work obligations.
In terms of the management and performance of the Ghana Petroleum Funds, reserves of the fund increased by 14.99 percent (US$971.4 million) over that of 2020 (US$844.8 million) despite withdrawals worth US$114.9 million from the Ghana Stabilization Fund.
Since its establishment in September 2011, PIAC has exercised its oversight responsibility of monitoring and evaluating the management and use of Ghana’s petroleum revenues by the government and stakeholder institutions.
Meanwhile, the Natural Resource Governance Institute (NRGI) in its 2021 Resource Governance Index assessment of Ghana’s oil and gas industry, has placed the sector in a ‘‘good’’ performance band with a composite score of 78 out of 100 points.
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The score marks 11 points increase in the 67 points score recorded by the index in 2017.
The improvement in the country’s score is largely owed to strengthened resource governance underpinned by improvements across both the index’s value realization and revenue management components.
According to the NRGI, the following accounted for the higher composite score of 78 points by the country’s oil and gas industry in its resource governance Index;
- Ghana’s oil and gas sector’s move into the “good” performance band in the 2021 RGI is driven by improvements in the governance of licensing and national budgeting along with continued improvements of the state-owned Ghana National Petroleum Company (GNPC) and the Ghana Stabilization Fund, the country’s sovereign wealth fund.
- Adoption of new laws regarding licensing and national budgeting strengthened Ghana’s extractives legal framework and helped drive the 2021 RGI score increase.
- Both law and practice scores increased, but the difference between them widens from -7 to -22, signaling a worrying “implementation gap.”
- GNPC improved its performance through commodity sales disclosures, but areas for future improvement include the timeliness of disclosures and aspects of corporate governance.
- The Ghana Stabilization Fund scored a full 100 points on governance, owing to new disclosures of assets and asset classes.
- Ghana’s oil and gas sector outperformed the older gold mining sector owing to enhanced transparency and accountability in the oil and gas sector legislative framework.
Ghana’s oil and gas sector has grown steadily since production began in the Jubilee oil field in 2010, with hydrocarbon exports increasing from $127 million in 2010 to over $4.9 billion in 2019, comprising almost 23 percent of Ghana’s merchandise exports.
The governance of the sector has improved since the 2017 RGI, driven by a 14-point increase in value realization and 20-point increase in revenue management. Ghana’s enabling environment continues to provide a solid base for good resource governance, although areas for improvement remain.
