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PIAC Mulls Court Action over GNPC Explorco’s $488 Million Non-Remittance to Petroleum Holding Fund

3 months ago
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PIAC Mulls Court Action over GNPC Explorco’s $488 Million Non-Remittance to Petroleum Holding Fund

The Public Interest and Accountability Committee (PIAC) is considering legal action as a final resort to obtain clarity on what legally constitutes “petroleum revenue” under the Petroleum Revenue Management Act (PRMA), amid a protracted disagreement with the Ghana National Petroleum Corporation (GNPC) over the latter’s failure to pay $488 million into the Petroleum Holding Fund (PHF).

The amount in contention includes $145 million in oil liftings undertaken in 2024 by GNPC’s wholly owned subsidiary, GNPC Explorco, bringing the total unremitted petroleum revenues held by Explorco—and previously by Jubilee Oil Holdings Limited (JOHL)—to $488 million as at end-December 2024.

Speaking at the launch of PIAC’s 2024 Annual Report, the Committee’s Chair, Constantine Kudzedzi Esq., emphasised that PIAC maintains a long-standing position that all oil proceeds—whether direct or indirect—must be paid into the PHF, in accordance with provisions in the PRMA Act.

“The Committee reiterates its position that proceeds from liftings by GNPC Explorco constitute indirect participation of the State and therefore must be paid into the Petroleum Holding Fund,” Mr Kudzedzi stated.

“We have done all the analysis and stick to our position that GNPC Explorco’s proceeds should be paid into the PHF. However, GNPC holds a different opinion. So, we may have to seek an interpretation from the courts on what constitutes petroleum revenue under the PRMA Act and this will be our last resort if the matter remains unresolved,” he added.

GNPC argues that Explorco’s proceeds do not fall under the category of revenues required to be paid into the PHF, a position PIAC disputes as contrary to the letter and spirit of the PRMA Act.

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The 2024 PIAC report further reveals what it describes as a troubling development pertaining to the transfer of loan obligations initially assumed by GNPC on behalf of the State to GNPC Explorco.

PIAC warns that this trend could burden Explorco with unsustainable debt and compromise its viability as GNPC’s commercial arm, especially in the context of the Corporation’s anticipated future weaning from PHF support.

“There is a worrying development where some loan obligations, initially borne by GNPC on behalf of the State in respect of Karpowership and Litasco guarantees, are being offloaded to GNPC Explorco. This will potentially saddle Explorco with debt and defeat its purpose as a solely commercial wing of GNPC capable of sustaining the Corporation when it no longer benefits from disbursements from the PHF,” the report stated.

As part of its recommendations, PIAC is urging Parliament to intervene by enacting measures that insulate both GNPC and GNPC Explorco from taking on loans and guarantees on behalf of the government, its agencies as well as national and local infrastructure projects.

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Tags: GNPCPetroleum Holding FundPIACPIAC Mulls Court Action over GNPC Explorco’s $488 Million Non-Remittance to Petroleum Holding Fund

Comments 1

  1. Rexford Agyei Frempong says:
    3 months ago

    GNPC is an entity on its own with its core mandates, petroleum holding funds is specifically to be recovered from exploration rights and royalties due the state. it is wrong to attempt to take resources from other operations of GNPC. The fund is specially from petroleum revenue not government agencies operations , there is a difference in the various roles of GNCP which must be acknowledged

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