The government is expected to raise GH¢1.7 billion from oil to support initiatives and projects captured in the 2014 budget.
The amount, which represents about 1.6 per cent of GDP, is also about GH¢4 million higher than the GH¢1.35 billion that the country earned from petroleum in the first nine months of 2013.
The Minister of Finance and Economic Planning, Mr Seth Terkper, announced this at the presentation of the 2014 Budget Statement and Economic Policy of the government to Parliament yesterday.
He added that although the government budgeted to collect some GH¢1.12 billion from oil in 2013, revenue inflows from the sector rose to some GH¢1.35 billion as of September this year.
He said the higher-than-expected earnings from petroleum were mainly as a result of corresponding higher-than-anticipated inflows of corporate tax from the sector.
He added that crude oil production at the Jubilee Field also rose above expectation, partly leading to the corresponding rise in revenues from the sector.
“Mr Speaker, in the first nine months of 2013, crude oil production from the Jubilee field averaged 102,503 barrels per day (bpd), compared with a projected output of 83,341 bpd and 71,997 bpd in 2012. This works out to a total of 27.06 million barrels for January to September 2013, compared with a full-year estimate of 30.42 million barrels and 26.35 million barrels for the full year of 2012,” Mr Terkper said.
In line with the Petroleum Revenue Management Act (PRMA), he said, the government transferred some US$186 million to the Ghana National Petroleum Corporation (GNPC), of which US$53 million was equity financing cost and US$132.69 million the corporation’s share of net carried and participating interest.
“Mr Speaker, the annual budget funding amount (ABFA), which is 70 per cent of the net government of Ghana petroleum receipts, amounted to US$204.90 million, with the Ghana Heritage Fund (GHF) and the Ghana Stabilisation Fund (GSF), which constitute the Ghana Petroleum Funds (GPFs), receiving US$316.09 million.
“Thus, by the end-September 2013, the GPFs had received more revenue than the ABFA, which is the direct opposite of what obtained in 2012 and 2011,” Mr Terkper added.
Daily production of oil at the Jubilee Field averaged 102,532 barrels between January and September this year and the minister was confident it would ramp up to the plateau rate of 120,000 in 2014 should the trend continue till year end.
The minister said the benchmark revenue was estimated at GH¢1.3 million for 2014 of which government was proposing that some ¢million, representing 70 per cent of the total be allocated to the ABFA and the remaining GH¢385.70 million paid into the GPFs.
“Out of the amount allocated to the GPFs, it is further proposed that 70 per cent or GH¢269.99 million be allocated to the Stabilisation Fund while 30 percent or GH¢115.71 million is allocated to the Heritage Fund,” the minister added.
He also proposed that Parliament gave the government the go ahead to spend the ABFA on four key areas, which he mentioned as expenditure and amortisation of loans for oil and gas infrastructure, road and other infrastructure, agriculture mordernisation and capacity building, including oil and gas.
The government, he said, had also decided to spend the ABFA on the development of six major specific areas and infrastructural projects.
Source:Maxwell Adombila Akalaare/ Daily Graphic
Get the latest news and updates on Ghana’s oil and gas value chain by following us Reporting Oil and Gas on twitter @oilgasghana and like our facebook page and get at us on Google+. Subscribe to our group to get update