Ghana

Ghana loses US$1.04 billion in oil revenue in first half 2020 due to COVID-19

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Oil Revenue

Ghana lost a total of 1.04 billion United States dollars (USD) or 5.7 billion Ghana cedis in petroleum revenue in the first half of 2020 due to COVID-19, this is according to the Public Interest and Accountability Committee (PIAC) report released here over the weekend.

The report titled, “Report on the management and use of petroleum revenue for the period Jan.-June 2020” explained the outbreak of the pandemic led to freeze on the work programs as well as the cancellation of critical operations and maintenance works on production facilities scheduled for the year.

“Although oil production remains at approximately 200kbpd, production and revenue forecast for the year have been significantly affected. According to the Ministry of Finance, the total estimated fiscal impact from the shortfall in petroleum receipts, import duties, other tax revenues, the cost of the preparedness plan, and cost of Coronavirus alleviation program is 3.89 billion USD or 21.42 billion Ghana cedis with shortfall in petroleum revenues alone being 1.04 billion USD or 5.7 billion Ghana cedis,” the report said.

Over 450 Ghanaians working for international oil and gas companies here including Aker Energy, Tullow Schlumberger, Haliburton, Baker Hughes among others lost their jobs within the local supply chain dynamics resulting from the pandemic.

Ken Ofori-Atta, former finance minister in presenting the mid-year budget estimates to the legislative body on July 23, last year highlighted the impact of the pandemic on the economy.

He said, “The pandemic continues to pose significant challenges to the Ghanaian economy. The sectors heavily affected include the hotel and hospitality industry, foreign direct investment, trade and industry, agriculture, health, transportation, manufacturing, real estates, financial and education. Households and businesses have equally been hard hit with significant job losses and reduced incomes.”

The PIAC was set up under section 52 of the country’s Petroleum Revenue Management Act, 2011 (Act 815), as amended by Act 893 to monitor and evaluate compliance with the Act by government and other relevant institutions in the management and use of petroleum revenues.

Ghana discovered oil in commercial quantities in 2007. The Jubilee field, which was first to be discovered in 2007, began production in 2010. The Tweneboa Enyenra Ntomme (TEN) field which was discovered in 2009 came on stream in August 2016 with the Sankofa Gye Nyame (SGN) field located offshore Cape Three Points beginning production in May 2017.

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