The Ghana National Petroleum Corporation (GNPC) has been urged to position itself to become a stand-alone operator and take advantage of the current ‘energy transition’ regime to diversify its portfolio.
It is expected to have some reserves (savings monetary wise) to be able to do the above.
Globally, a chunk of the major oil companies such as Shell, Exxon Mobil and BP are said to be diversifying their investment portfolio and putting some into renewable energies.
The Technical Manager at the Public Interest Accountability Committee (PIAC), Mr Mark Agyeman, said there were some lingering issues with the operations of the GNPC.
According to him, a careful observation showed that very little of the money given to the corporation went into its core mandate.
He said a chunk of it went into providing loans and guarantees for other state enterprises or government itself and for undertaking quasi fiscal expenditure, whereas it was the Annual Budget Fund Amount (ABFA) that was supposed to undertake quasi fiscal expenditures as far as petroleum revenues (PRs) were concerned or other revenue.
“Because PR is a mere six per cent of the government’s revenue, it’s not much. There has been an over-concentration on PR because it’s a finite resource that will finish one day and has assured revenue, and so maybe that is why we concentrate on it,” he said.
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Exploration
Mr Agyeman noted that the Voltarian basin had been given to the corporation to explore, adding that onshore exploration and production were not as capital-intensive as offshore operation.
“How is it taking advantage of the position given by the State? Would they have needed technical and financial expertise/capabilities to go alone?
“Even with offshore, in the bidding rounds, GNPC was given a block in shallow waters (technical and financial muscle required is not intensive). Does it have the technical and financial capability to develop these two?” he quizzed.
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Core mandate
Mr Agyeman said about $2bn had been given to the GNPC from 2011-2020.
“What does the corporation have to show? If you ask, they are paying for cash calls, equity finance calls but then that is just one level.
“The level B is for them to concentrate on their core mandate. So if we use level B money over the period to exact accountability from GNPC, would they have something tangible or substantial to show for how they utilised that money?” he quizzed.
Revenue assessment
Mr Agyeman said the committee would commission a paper, ‘Assessment of Petroleum Revenue Management (PRM) for the past 10 years’, that would bring out the issues.
“A trend analysis of the revenue expenditure across different priority areas will definitely bring out the issues and we will have a stakeholders’ roundtable on it to see how we can do things differently,” he said.
He added that PIAC would continue to work with the government and other relevant stakeholders to ensure the efficient management and use of both the resource and revenue.
Allocation to GNPC
The 2020 PIAC annual report on the management and use of petroleum revenue states that allocation to GNPC comes in two levels, A and B.
Level A allocation is dependent on the corporation’s equity share – cash calls – charged on gross revenue, while Level B allocation is charged on the net Carried and Participating Interest (CAPI) of the NOC.
The CAPI was initially capped at 30 per cent and subsequently to 25 per cent, arising from the enactment of the Earmarked Funds Capping and Realignment Act, 2017 (Act 947).
For the period under review, the corporation received an amount of US$198.65 million as crude sales.
This, together with the cash balance of US$15.90 million, brought forward from the previous period (2019) plus internally generated funds of US$58.02 million, brings the total cash available to US$272.56 million.
Internally Generated Funds (IGFs) were made up of receipts from the government in respect of Heavy Fuel Oil (HFO) trading, training & technology receipts from partners and revenue from the sale of scraps, mostly from pipeyards.
Source:www.graphic.com.gh