The Ghana National Petroleum Corporation (GNPC), which has been in operation for 40 years, has to have its operations reviewed in order for the government to begin the review process, according to the Public Interest and Accountability Committee (PIAC).
The statutory body responsible for monitoring how petroleum revenue is used argued that the GNPC Act, 1993 (PNDCL 64), which is 40 years old, was passed when the country had not yet discovered and produced petroleum resources like gas and oil.
As a result, it gave the corporation some discretionary powers to engage in certain activities that are incompatible with the best practices used by national oil companies around the world, necessitating a review.
For instance, the PIAC discovered in its 2022 annual report that GNPC had made a number of quasi-fiscal expenditures (QFEs).
Vice Chairperson of PIAC, Nasir Alfa Mohammed, addressing journalists at a workshop at Keta in the Volta Region mentioned that GNPC is using its subsidiary Jubilee Oil Holding Limited (JOHL) to carry out operations not approved in GNPC’s work plan for the year 2022.
However, it uses proceeds from this subsidiary for other expenditures instead of paying into the petroleum holding fund (PHF).
“In 2022, GNPC received an amount of US$38,835,538 as gas commodity revenue from the cash waterfall mechanism (CWM) which constitutes petroleum revenue, but this amount was not paid into the PHF.
“GNPC is also using JOHL to carry out operations not approved in its work plan for 2022. Two notable examples are Explorco cash calls on Springfield, ENI Block four at the value of US$5,546,419, and the Saltpond Offshore Producing Company Limited (SOPCL) decommissioning worth US$ 11 million.
“Total lifting proceeds received by JOHL for 2022 amounted to US$272,652,209. Despite calls by PIAC that revenues of JOHL constitute petroleum revenue and should be paid into the Petroleum Holding Fund, GNPC continues to use lifting proceeds of JOHL for other expenditures,” he said.
