GHANA has received a total of US$780.07 million (GHȻ2,139.12 million) in revenues from oil receipts at the third quarter of this year, the Minister of Finance, Set Terkper has announced.
This compares favourably with the total 2014 Budget estimate of US$777.0 million (GHȻ1,709 million), he said.
The country’s Jubilee and Saltpond Fields are currently the only petroleum producing fields. The total number of barrels produced from the Jubilee Field for the period, January to September 2014, was 28,017,990 barrels (102,630 bopd), compared with 27,060,737 barrels for the corresponding period in 2013.
While the total production oil from the Saltpond Field for the same period was 60,728 barrels, compared with 78,376 barrels during the same period in 2013, Mr Terkper told Parliament on Wednesday, this week.
For the period January to September 2014, the Ghana National Petroleum Corporation (GNPC) lifted crude oil five (5) times (17th – 21st liftings) on behalf of the State. This involved 4,824,715 barrels of oil, down from 4,977,922 barrels in the corresponding period in 2013.
Receipts from crude oil liftings for the first nine months of 2014, which accrued from the sixteenth (lifted on 20th December, 2013) to the twentieth liftings, was US$514.88 million (GH¢1,415.67 million), as shown in Table 9. This involved 4,746,674 barrels and excludes the proceeds from the twenty-first lifting, which was effected on 2nd September 2014, since the proceeds were received in October 2014.
Mr Terkper who has come under attack after the presentation of the 2015 budget explained: “In spite of the fact that the actual data on petroleum receipts is for nine months, ending September 2014, petroleum receipts show an overall positive variance of approximately US$3.07 million over the 2014 Budget estimate.
The positive variance was influenced mainly by Corporate Income Tax, which exceeded its annual budget amount by US$76.65 million. This included 2013 additional Corporate Income Tax payments by Tullow and Anadarko of approximately US$10.52 million in the third quarter of 2014”.
Furthermore, returns on the accumulated amount in the Petroleum Holding Fund (PHF) and the payment of a price differential by Unipec Asia to the Ghana Group increased the year-to-date proceeds by approximately US$0.41 million.
Altogether, these more than compensated for the shortfalls in the other sources of petroleum revenue, particularly, gas receipts, which were not realised due to the non-completion of the gas infrastructure project.
The contribution from Corporate Income Tax to total petroleum receipts as at end-September 2014 was 33.83 percent, compared with 47.63 percent from Carried and Participating Interest, 18.40 percent from Royalties. Surface Rentals, PHF Interest and 2013 price differentials contributed 0.15 percent, the minister stated.
Allocation of Petroleum Receipts
In November 2013, Ghana’s Parliament approved the proposal to reduce the National Oil Company’s (NOC) share of the Carried and Participating Interest, net of Equity Financing Costs, from 40 percent to 30 percent for 2014-2016, in line with Section 7(3b) of the country’s Petroleum Revenue Management Act (PRMA). This was in view of the anticipated increase in crude oil volumes for the period, Mr Terkper stressed.
Out of Government’s net petroleum receipts, 70 percent is designated as the Annual Budget Funding Amount (ABFA) while 30 percent is transferred into the Ghana Petroleum Funds (GPFs). By the same arrangement, the Ghana Heritage Fund (GHF) and the Ghana Stabilisation Fund (GSF) received 30 percent and 70 percent, respectively, of the total receipts into the GPFs.
He noted that; “the 2014 petroleum receipts were allocated based on the provisions of the PRMA. Of the total revenue of US$780.07 million, US$136.93 million was allocated to GNPC as its share of the Equity Financing Cost (US$36.38 million) and Net Carried and Participating Interest (US$100.54 million). The total ABFA amounted to US$306.80 million between January and September 2014. The quarterly ABFA target was achieved for all the three quarters, with the excess receipts being transferred into the GPFs in accordance with Section 23 (1a) of the PRMA”.
To this end, he revealed that a total of US$336.34 million was transferred into the GPFs in the first nine months of 2014. Out of this amount, the GHF received US$100.90 million, while the GSF received US$235.43 million, Mr Terkper added.
Utilisation of the 2014 ABFA
Analysis of the allocation of ABFA in the first three quarters of 2014 shows that a total amount of US$306.80 million (GH¢888.60 million) was allocated in accordance with the PRMA. The actual ABFA allocation in US dollars was equivalent to the 2014 Budget estimate but higher in cedi terms due to exchange rate differentials, according to the finance minister.
Mr Terkper was quick to disclose that a total of US$124.53 million (GHȻ270.51 million) was disbursed to the non-CDB component of the ABFA in 2014.
Of this amount, he said expenditure on Road and Other Infrastructure received GHȻ260.65 million, while Agriculture Modernisation received GHȻ9.85 million. No disbursements were made in the two other priority areas in the referenced period, Mr Terkper told the August House.
Cap on the Ghana Stabilisation Fund
Paragraph 972 of the 2014 National Budget proposed a cap of US$250 million on the GSF, in line with Section 23(3) of the PRMA. This was subsequently approved by Parliament on Tuesday, 17 December, 2013, and the GSF was assessed on quarterly basis and the excess balance transferred for contingency purposes or debt repayment.
An amount of US$176.49 million (which was the amount in excess of the cap of US$250 million in the first quarter) was withdrawn from the GSF in the second quarter after having assessed the amount standing in the GSF by the end of the first quarter of 2014.
Similarly, a total of US$14.70 million was determined as the excess over the cap on the GSF in the second quarter and US$114.50 million for the third quarter. The third quarter excess amount was transferred in October 2014.
Of the excess amount transferred so far, the equivalent of GHȻ50.0 million (US$17.43 million) has been used to establish the Contingency Fund, in line with Articles 175 and 177 of the Constitution, and the remaining balance of US$288.25 million deposited into the Debt Service Account for debt repayment, in line with Section 23(4) of the PRMA.
Of the amount deposited into the Debt Service Account, approximately US$64.82 million was used to retire some domestic marketable instruments and US$150 million earmarked for the liquidation of part of the 2017 Eurobond.
African Eye News.com