Petroleum Commission Saves Ghana $2bn, Uncovers $229m Oil Cost Infractions
The Petroleum Commission says its oversight of Ghana’s upstream petroleum sector has generated about US$2.2 billion in savings and potential gains for the state, largely through reviews of field development plans, procurement processes and a recent petroleum cost audit.
The disclosure was made by the Commission’s Chief Executive Officer, Emeafa Hardcastle, at the launch of activities marking its 15th anniversary.
The CEO said reviews of major development plans had delivered approximately US$2 billion in savings, with the Greater Jubilee Full Field Development Plan accounting for about US$1 billion of the amount.
The review of the Jubilee Plan of Development Phase 1A generated about US$210 million in savings, while the TEN Plan of Development review saved approximately US$510 million. A review of the OCTP SURF and T&I costs also resulted in savings of about US$200 million.
“The Petroleum Commission has over the years maintained efficient stewardship of Ghana’s hydrocarbon resources and has saved the State millions of dollars,” Ms Hardcastle said, adding that the interventions had translated into “enhanced revenue to the State from exploitation of our hydrocarbons.”
Beyond development plans, the Commission says further savings have been achieved by scrutinising procurement and tender processes to ensure value for money.
A recent petroleum cost audit has also uncovered US$229 million in infractions in one of the country’s contract areas.
According to Emeafa Hardcastle, the amount has been removed from the pool of allowable petroleum costs, creating the potential for the state to gain through future Corporate Income Tax and Additional Oil Entitlement.
“These have since been struck out from the pool of allowable petroleum costs," she said.
The CEO explained that the Commission’s regulatory role also extends to contractors’ work programmes and budgets, allowing it to control expenditure and ensure that costs are aligned with approved activities.
Meanwhile, the Commission says its regulatory mandate has also helped expand Ghanaian participation in the upstream sector.
Since the introduction of the 2013 Local Content and Participation Regulations, the Commission has supervised the award of US$4.9 billion in contracts to indigenous Ghanaian companies, representing 22% of total contracts.
Joint venture companies involving Ghanaian and international firms received another US$7.9 billion, equivalent to 35% of total contracts during the period.
Ms Hardcastle said the Commission’s focus has been to deepen local participation and in-country value addition while preventing Ghana’s petroleum industry from operating as an enclave economy.
The launch brought together past chief executives, industry stakeholders and key players in Ghana’s petroleum sector as the Commission outlined activities to commemorate the 15-year milestone.
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