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Govt targets GH¢1.12bn from petroleum in 2013

BY: Enoch Darfah Frimpong

The government is projecting to rake GH¢1.12 billion in revenues from petroleum exports in 2013.

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Out of the projected amount, GH¢717.89 million is to come from the share of the state in the oil production; GH¢277.38 million from royalties in both the Jubilee and Saltpond oil fields; while GH¢107.81 million is to be received as corporate tax from the oil companies operating in the country.

Additionally, the government is estimating that monies paid for surface rentals and gas receipts would account for GH¢814,072 and GH¢18.84 million of this year’s petroleum receipts respectively.

Presenting the 2013 budget to Parliament Tuesday, the Minister of Finance and Economic Planning, Mr Seth Terpker, said  this year’s revenue projections from petroleum were based on an estimated average crude oil price of US$94.36  per barrel and a daily production of 83,341 barrels.

The 2013 revenue estimates from oil and gas, as captured in this year’s Budget and Economic Policy Statement of the government, is moderate compared to the 2012 approximation but higher than actual amount received from the sector in the just ended year.

Although the government, in the 2012 budget, estimated to receive some GH¢1.24 billion from petroleum that year, it got GH¢979.32 million from the sector, according to the 2013 budget.

The shortfall emanated from a myriad of factors that included a slowdown in daily output of oil, fall in global prices of crude compared to government’s estimated average price of the product and a-less-than estimated revenue from oil tax.

It is not clear if the government’s inability to meet its target from petroleum revenue in 2012 informed the moderate forecast in 2013.

The Executive Director of Integrated Social Development Centre (ISODEC), Mr Bishop Akolgo, however, told the Daily Graphic in an interview that the 2013 estimation could even be a mirage should crude oil prices in the international market fall below US$100 and daily production at the Jubilee Field fails to increase.

“The only way the government can achieve that target is if production goes up and prices stay above the US$100 mark. Otherwise, it will be difficult,” he said.

Crude oil prices are currently averaging at US$110 per barrel while daily production at the Jubilee Field is hovering around 110,00 barrels, according to data from Tullow Ghana, the operator of the field.

Mr Akolgo also advised the government “to be a bit conservative” in its projections for corporate tax from petroleum, explaining that the capital gains recovery as contained in the contract between Ghana and partners of the Jubilee Field made it difficult for the companies to pay tax while recovering their cost.

“Revenue from corporate tax will be minimal, that is if it will even come,” he observed.

The five partners of the field are currently recovering some US$4.2 billion which they said was invested in the field between 2007 and 2010.

The recovery is done at 20 per cent per annum over a period of five years, according to the agreement on recoverable cost.

Story by Maxwell Adombilla Akalaare