The government is banking its hopes on the Tweneboa-Enyenra-Ntomme (TEN) and the Sankofa-Gye-Nyame oil fields to achieve its growth target of 6.3 per cent this year.
A Member of the Budget Committee, Mr Kojo Oppong Nkrumah, addressing students of the Methodist University at a post-budget programme organised by Radio Gold, said although the government’s growth target was a bit ambitious, it was confident of meeting it due to an expected increase in oil and gas production which would come as a result of higher production from the TEN fields and the introduction of crude oil and gas production from the Sankofa Field.
He said the country’s growth for last year suffered due to the challenges with the Jubilee Field which was expected to produce about 106,000 barrels of oil but ended up producing just about 88,000 barrels.
“This year, the Jubilee Field is even expected to produce less which is about 66,000. However, ramped-up production from the TEN Field and a relatively low crude oil production from the Sankofa Field will be more than enough to compensate for the expected production decline in the Jubilee Field,” he stated.
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These two fields are expected to take the average production to 123,416 bopd, up from 88,487 bopd in 2016.
Out of this, the government is expected to make an amount of GH¢2,358.2 million, representing a 231.2 per cent increase over the outturn in 2016. This amount represents an estimated 1.2 per cent of GDP.
TEN Field Project
The TEN Oil field, which started operating in August last year, is expected to produce between 20,000 to 23,000 barrels of oil per day.
The project is a joint venture led by Tullow Oil with a stake of 47.185 per cent, with the other partners, Kosmos Energy, Anadarko Petroleum Corporation, Ghana National Petroleum Corporation and Petro SA, having a stake of 17 per cent, 17 per cent, 15 per cent and 3.815 per cent, respectively.
The project derives its name from the three fields, Tweneboa, Enyenra and Ntomme (TEN), which lie 60 kilometres off the coast of the Western Region, Ghana.
TEN is expected to produce about 300 million barrels of oil over a 20-year period, equivalent to 80 per cent of oil and 20 per cent gas.
The field will produce 80,000 barrels of oil and 180mm scf of gas per day when it reaches full production.
The Sankofa-Gye Nyame Field in the Tano Basin of the West Cape Three Points, on the other hand, is on track to deliver its first oil in August 2017 and its first gas in February 2018 to augment thermal power generation that will ensure sustainable electricity production.
It is expected to deliver an additional 30,000 barrels per day of oil and 180 million cubic feet (5.07 million cubic metres) per day of gas to Ghana.
Gas from the project is expected to help generate 1,100 MW of additional electricity and once on stream, it will produce enough gas to increase the country’s electricity supply by 50 per cent.
The gas that will be produced from these two fields is also expected to help stabilise the country’s energy sector.
Mr Oppong Nkrumah was confident that this stable energy sector would help the government to meet its growth target.
“We are not expecting the energy crisis to hit us like previously and we, therefore, expect industry to perform way better than it did. We have done some work with the IMF to find out what growth level we will achieve in industry,” he stated.
He said the government was also focusing on direct stimulation initiatives to spur growth on its own beyond oil and beyond resolution of the energy challenges.
Some of these initiatives include the reduction and abolishment of some taxes, the planting for food and jobs initiative and the district industrialisation project.
“All of these put together give us comfort that we can safely target 6.3 per cent and come as close to it as possible or even exceed it,” he noted.
“If there is the need to review it by mid-year, according to the new Public Financial Management Act, the Finance minister will be before Parliament to do the reviews,” he added.
Widening the tax net
Mr Oppong Nkrumah, who is also the Member of Parliament for Ofoase Ayirebi, also mentioned that the GRA would soon be rolling out two tax compliance programmes that would widen the tax net.
Aside from the two programmes, he said the government had also lined up two initiatives which it was sure would significantly help improve tax compliance.
The two initiatives are the National Identification Programme and the Digital Addressing System, which he said would both be completed this year.
“Part of our tax problems has been because not everybody is identifiable on the database and even if you can identify him, you cannot locate him. It is, therefore, our expectation that if we are able to complete these, the tax net would be widened,” he pointed out.