In the first three quarters of 2023, the country has witnessed a 9.54 percent drop in crude oil production, totaling 35.42 million barrels, compared to the same period in the preceding year, according to the Finance Minister, Ken Ofori-Atta.
The decline is attributed to the natural wane in the Tweneboa, Enyenra, and Ntomme (TEN) field, which escalated gas-to-oil ratio and water production in the Jubilee and Sankofa fields.
Speaking in Parliament at the presentation of the 2024 budget and economic policy, the finance minister said the Greater Jubilee field contributed 21.94 million barrels, the TEN field produced 5.02 million barrels, and the Sankofa-Gye Nyame field yielded 8.46 million barrels.
However, this was 9.54 percent lower than the 39.15 million barrels produced in the same period in 2022.
Meanwhile, he said partners lifted 34.29 million barrels, with the Ghana National Petroleum Corporation (GNPC) lifting 6.65 million barrels on behalf of the state.
The development has consequently affected Ghana’s earnings from the oil and gas sector, covering Jan. to Sept. 2023. The country experienced a significant drop of 35.72 percent compared to the same period in 2022.
This decline affects the overall funds entering the Petroleum Holding Fund (PHF), the finance minister, Ken Ofori-Atta, reported.
The receipts from crude oil liftings during this period amounted to US$509.68 million. Regarding other petroleum receipts, the total funds deposited into the PHF reached US$751.32 million. This represents a substantial decrease from the US$1,168.99 million received in the corresponding period of 2022.
The finance minister highlighted that the report incorporates data from the 69th – 72nd Jubilee liftings, 22nd TEN liftings, and the 12th and 13th liftings from the Sankofa Gye-Nyame field, signifying a shift in the petroleum landscape.
Out of the total distribution amounting to US$750.69 million, the National Oil Company (NOC), specifically the Ghana National Petroleum Corporation (GNPC), received US$184.45 million. This allocation to GNPC comprises an Equity Financing Cost of US$117.63 million and GNPC’s share of the net Carried and Participating Interest (CAPI), totaling US$66.82 million.
The decrease in petroleum receipts for the first nine months of 2023 raises concerns about the financial well-being of the National Oil Company. Reducing funds allocated to GNPC could impact ongoing projects and strategic initiatives within the oil and gas sector.
It should be recalled that the executive director at the Africa Centre for Energy Policy (ACEP), Benjamin Boakye, recently noted that the regulatory environment needs to be ‘sanitized’ to attract new investments.
While recounting that Ghana had lost about 20 million barrels (bbls) of oil on a year-to-year basis, he urged a need to rethink the country’s strategy to make more from its oil resources.
Mr Boakye, speaking in an interview at the back of a recent media engagement in Accra, observed the country made some gains in petroleum revenue despite declining production and projected that prevailing conditions would not likely allow a repeat of such fortune.
“Last year was an outlier; for this year, the oil prices have been averaging US$75 per barrel, and if we are not lucky and production also dips, then it will be a double pain for the country,” he said.
He noted that the development would have implications for the country’s budget, indicating that the declining oil production has already led to job losses in the extractive sector.
Consequently, the current development affirms the concern raised by the ACEP boss.
The 2024 Budget also shows that out of the total gas production of 188,956 thousand standard cubic feet (Mscf), 77,876 Mscf was used for power generation and non-power purposes.
It was indicated that the SGN Field transported 50,743 MMScf, the Greater Jubilee Field transported 26,444 MMScf, and the TEN Field transported 689 MMScf for power generation. The average daily gas export of 285.26 MMScf was slightly below the target of 289.47 MMScf.
Economist and Executive Director of ACT AFRICA, Abdul-Karim Mohammed, in a brief reaction to the development following the finance minister’s report, said, “What is happening to our gas output is that we have not invested in the processing capacity to be able to offtake from the producing fields, so, they are either reinjected or flared and that in turn also increases our CO2 emissions.”
Industry watchers expect government officials to address the decline in petroleum receipts and their impact on national revenue. The Ministry of Energy and Finance is encouraged to explore strategies to mitigate the effects and ensure the sustainability of the oil and gas sector.