For the second time in a row, the Ministry of Finance has failed to deposit over US$70million in proceeds from the Jubilee Oil Holding Limited (JOHL) lifting into the Petroleum Holding Fund (PHF) as mandated by law, says the Public Interest and Accountability Committee (PIAC).

This brought the accumulated proceeds of unpaid revenues into the PHF to over US$343 million at the end of 2023.

The development is thought to violate the Petroleum Revenue Management Act (PRMA).

“This Act specifies that “any amount received by government, whether directly or indirectly, from petroleum resources not included in paragraphs (a) to (d) – including capital gains tax from the sale of exploration, development and production rights – should be considered part of the gross receipts of PHF,” disclosed PIAC’s Chair, Emerita Prof. Elizabeth Ardayfio-Schandorf .

She said JOHL, initially an offshore registered company in the Cayman Islands, was acquired by GNPC through over a US$164million ‘share purchase agreement’ between Ghana and Anadarko WCTP Company in 2021.

The Chair of PIAC added that crude oil production declined for the fourth consecutive time.

According to her, production dropped from a high of 71.44 million barrels in 2019 to 48.25 million barrels in 2023 – representing an annual average decline of 9.2 percent.

Also, she said service rentals owned by international oil companies remained high at over US$2million at the end of 2023, citing the Committee’s latest report.

Again, she revealed that “the retention of the current cap of US$100million on the Ghana Stabilisation Fund (GSF) for the year 2023 did not follow the formula stipulated in LI 2381”.

Emerita Prof. Elizabeth Ardayfio-Schandorf was speaking in an engagement with media in Takoradi, and observed that a proper application of the formula would have returned a cap of US$581million.

The current cap, she further observed, did not help build a fund to serve its purpose.

She mentioned that development and production costs, referring to the PIAC report, continue to be significantly high in the TEN field while production remained low by more than 3 million barrels as compared to Sankofa Gye Nyame, even though there’s no drilling in either field.

In view of these developments, she said PIAC recommended in the 2023 report that government and relevant regulatory bodies should take appropriate steps to reverse production decline on existing oil fields and ensure investments in unexploited fields.

Meanwhile, PIAC reiterated its position that proceeds from liftings of JOHL and other subsidiaries of GNPC constitute petroleum revenues within the meaning of PRMA provisions, and therefore must be paid into the PHF.

In addition, the PIAC Chair said the committee entreated Ghana Revenue Authority (GRA) to intensify its efforts at recovering surface rental arrears with the usual default penalties applied.

While it commended the Ministry of Finance for disbursing 5 percent of the Annual Budget Funding Amount (ABFA) to the District Assembly Common Fund (DACF), the Committee urged the ministry to ensure that subsequent disbursement to the DACF meets minimum requirements of 5 percent of the ABFA.