Ghana’s Petroleum Service Revenue Hits $301.2 Million in H1 2024; Local Firms Earn $27.5 Million
The total value of service recorded for the first half of 2024 in the petroleum upstream sector according to the 2024 semi-annual report by the Public Interest and Accountability Committee (PIAC), amounted to $301.2m.
Of the amount, $27.5m representing 9.3% of the total service revenue was earned by indigenous Ghanaian companies in view of the Government’s enforcement of the local content law.
A little over $271.4m and $2.3m also representing 90.10% and 0.77% of the total service value went to Joint Venture Companies (JVCs) and Foreign Companies respectively.
Per the PIAC report, despite the Petroleum Commission enforcing the local content law with the 1% deduction from the contract sum of oil production companies in accordance with the Petroleum (Exploration and Production) Act, 2016 (Act 919), challenges persist in the implementation of the law.
Notable among the challenges is the non-compliance from contractors and subcontractors who are citing stabilization clauses in their petroleum agreements to avoid the 1% deduction from the contract sum.
According to PIAC, as of June 5, 2024, receivables based on approved contract sums by the Local Content Fund amounted to $11.8 million.
Per the report, the Petroleum Commission in H1 2024 developed minimum local content requirements for the under-listed proposed contracts to optimize local content in procurement and tender processes and ensure continuous growth in local content development:
- Valve and Actuator Maintenance Services
- KNK FPSO MRO Supply
- Rigging and Lifting Support
- Inspection Services
In H1 2024, the Commission engaged 10 Joint Venture Companies (JVCs) assessed in 2022 and 2023, and 10 newly-assessed JVCs to review their performance concerning the progress of their Technology Transfer Programmes.
Also, the Commission in the quest to promote the transfer of skills, know-how and technology in the upstream petroleum industry:
- Reviewed and analyzed Technology Transfer Plans and Reports of 33 JVCs;
- Reviewed JV agreements of ten (10) existing JVCs and one (1) new JV (Marine Platform);
- Reviewed Technology Transfer Agreements of initial permit applications to ensure compliance; and,
- Reviewed Share Transfer Agreement of one (1) JV company
Meanwhile, Ghana has produced a cumulative 633,299,085 barrels of crude oil since launching production in 2010, generating approximately $10.7 billion in state revenue.
The disclosure came from PIAC Coordinator Isaac Dwamena during a media briefing in Accra, where he outlined production trends and government revenues spanning over a decade.
Ghana produced an initial 10.6 million barrels in 2011, reaching a record 34.3 million barrels in 2019. However, recent output has tapered, with 2023 reporting 22.4 million barrels, and production from January to July 2024 amounting to 24.8 million barrels.
Despite variable production levels, government oil revenues have remained a robust contributor to public finances.
Ghana recorded a sharp increase in oil revenue from $327 million in 2012 to $596 million in 2013, but subsequent years saw revenues fluctuate, dipping to $126 million in 2016.
Since then, earnings have rebounded, culminating in an all-time high of $840.7 million in the first half of 2024 alone. The spike marks Ghana’s highest semi-annual oil revenue since production began.
