The government expects to rake in some $669.4 million from the petroleum sector in 2018. The amount is expected to be grossed from the export of some 53.25 million barrels of oil and other revenue – generating sources in the petroleum sector.
Next year’s target is about 29.74 per cent higher than the US$515.64 million set in this year’s budget.
The projected revenue from the petroleum sector is based on expected increase in oil and gas production from the three major producing fields — Jubilee, Tweneboa Enyera and Ntomme (TEN) and Sankofa Gye Nyame (SGN) – in 2018 and other sources of petroleum receipts.
Presenting the 2018 Budget and Policy Statement to Parliament on Wednesday, the Minister of Finance, Mr Ken Ofori-Atta, said “the total petroleum revenue for 2018 is estimated at US$669.4 million, with benchmark revenue projected at US$335.86 million”.
Royalties from crude oil and gas are projected to amount to US$183.61 million, while carried and participating interest in the oil and gas sector is expected to amount to US$484.20 million.
The benchmark revenue was calculated based on a projected crude oil price of $57.36 per barrel and a gas price of $3.94 per million metric British Thermal Unit (MMBtu).
The 2018 budget is on the theme: “Putting Ghana back to work” and seeks to restore confidence in the economy and energise the entrepreneurial spirit within every Ghanaian.
The oil and gas sector is expected to be one of the major drivers of growth in the country, with the minister touting the positive achievements in the sector.
The favourable ruling by the International Tribunal for the Law of the Sea (ITLOS) also paves the way for the country to drill more wells and increase production.
The country raked in about US$362.58 million from the sale of its petroleum resources from January to September 2017.
The revenue, which accrued from combined oil production from the Jubilee and Tweneboa Enyera Ntomme (TEN) fields, was more than a 50 per cent increase over the US$172.91 million recorded from the same period in 2016.
A total of 5.8 million barrels of crude oil was lifted from the two major producing fields, with Jubilee contributing 3.8 million and the TEN field with 2.0 million barrels of crude oil.
“Total petroleum receipts, that is, proceeds from liftings and other sources as at September 2017 was US$362.58 million (GH¢1,552.13million). This compares with the receipts of US$172.91 million (GH¢671.49 million) for the same period in 2016,” he said.
Use of revenues
The total receipts of US$362.58 million was distributed in line with provisions in the Petroleum Revenue Management Act (PRMA), Act 815 between the Ghana National Petroleum Corporation (GNPC), which is the national oil company and other statutory funds earmarked to receive petroleum revenues.
The GNPC was allocated US$126.67 million, made up of Equity Financing Cost of US$74.86 million and an amount of US$51.81 million, representing its share of the net Carried and Participating Interest.
The amount transferred in 2017 from the total proceeds to the ABFA was US$127.09 million (GHȻ546.31 million). A total of GH¢265.3 million from the ABFA allocation was spent on the four priority areas – agriculture (GH¢21,156,840.43), physical infrastructure & service delivery in education (GH¢202,379,893.20), physical infrastructure & service delivery in health (GH¢6,044,229.09) and road, rail and other critical infrastructure development (GH¢34,357,771.92) – and the Public Interest and Accountability Committee (PIAC).
PIAC – the committee with oversight responsibility on the prudent management of the country’s petroleum resources – also received about GH¢1.3m for its activities between January and September 2017.