PIAC detects wrong figures from Saltpond Oil fields
Reports on crude oil production from the Saltpond oil field are full of discrepancies, the 2014 report of the Public Interest and Accountability Committee (PIAC) has said.
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While the company operating the field, the Saltpond Offshore Producing Company Limited (SOPCL), reported a marginal increase, figures from the Ministry of Finance (MoF) and the Ghana National Petroleum Corporation (GNPC) indicated a decline in production in 2014.
The SOPCL reported that a total of 79,602 barrels of oil was produced from the Saltpond Field in 2014 compared to 76,995 barrels produced in 2013, while the Ministry of Finance and the GNPC indicated that the Saltpond Field produced 95,093 barrels of oil.
The MoF/GNPC figures showed that there was a 9.5 per cent year-on-year decline in production when compared to the 2013 production output of 105,040 barrels.
Recommendation
The PIAC, which has oversight responsibility for the management of the country’s petroleum resources, therefore, recommended that the institutions involved should work to resolve the discrepancies in lifting figures from the Saltpond field.
According to the PIAC, discrepancies in the lifting figures did not give a true performance state of the oil producing field, which is located about 65 miles west of Accra, and therefore, the government was not able to determine the actual royalties due.
“Similarly, the lifting figures from the SOPCL and MoF/GNPC sources differed with SOPCL reporting increment in lifting while MoF/GNPC indicated otherwise,” the report said.
The committee also recommended a critical appraisal of the continuous operation of the Field against the background of low crude oil prices.
PIAC said it was not commercially sensible to continue oil production at Saltpond, where oil production has been taking place since the 1970s, because it will be difficult for the company to meet its expenses, let alone declare profit.
In 2014, all the major components of petroleum revenue exceeded their forecasts, with the exception of royalties from the Saltpond field.
The field’s revenues fell short of its target by 57 per cent. In the case of gas receipts, no payments were received, according to the report.
Out of the US$192.66 million that was received in 2014 in royalties, payments from the Saltpond Field accounted for 0.08 per cent, with much of the money coming from the Jubilee Field.
The report also showed that royalties from Saltpond declined by 43 per cent, dropping from US$217,214 in 2013 to US$151,986 in 2014.
Allocation of revenues
As at the end of year 2014, nearly US$3 bilion had accrued to the state as petroleum revenues since first oil in 2010.
In 2014, however, a total of US$978.02 million accrued to the government and this was distributed between the GNPC (18.48 per cent), Annual Budget Funding Amount (ABFA – 51.31 per cent) and the Ghana Petroleum Funds (GPFs – 48.69 per cent).
The allocation to the ABFA in 2014 was distributed to only three priority areas, instead of the usual four. These were expenditure and amortisation of loans (GH¢163.08 million), roads and other infrastructure (GH¢215.69 million) and agriculture modernisation (GH¢170.62 million).
“No allocation was made to the capacity building priority area in 2014 because planned expenditure was contingent upon the CDB-related Small and Medium Enterprise (SME) Projects Incubation Facility, which did not take off,” the report said.