The Petroleum Commission says tighter oversight of Ghana’s upstream oil and gas industry has helped the state avoid or recover potential losses amounting to about US$2.2 billion.
The Commission says the gains have come mainly from rigorous reviews of field development plans, procurement processes, contractor work programmes and a recent audit of petroleum costs.
Chief Executive Officer of the Petroleum Commission, Emeafa Hardcastle, disclosed this at the launch of activities to mark the Commission’s 15th anniversary.
She said reviews of major field development plans alone had generated about US$2 billion in savings, with the Greater Jubilee Full Field Development Plan accounting for approximately US$1 billion.
Other interventions included a review of the Jubilee Plan of Development Phase 1A, which generated about US$210 million in savings, while the TEN Plan of Development review resulted in savings of approximately US$510 million.
The Commission also identified about US$200 million in savings through its review of OCTP SURF and T&I costs.
Ms Hardcastle said these interventions demonstrated the financial value of strong regulatory oversight in Ghana’s petroleum sector.
“The Petroleum Commission has over the years maintained efficient stewardship of Ghana’s hydrocarbon resources and has saved the State millions of dollars,” she said.
Audit uncovers $229m in questionable costs
The Commission’s scrutiny has also extended to costs submitted by petroleum contractors.
According to Ms Hardcastle, a recent petroleum cost audit uncovered US$229 million in infractions in one of Ghana’s contract areas.
The amount has subsequently been removed from the pool of allowable petroleum costs, potentially increasing government revenue through Corporate Income Tax and Additional Oil Entitlement.
“These have since been struck out from the pool of allowable petroleum cost,” she said.
The CEO explained that the Commission also reviews contractors’ work programmes and budgets to ensure that expenditure is justified, approved and consistent with planned petroleum operations.
She said the approach was necessary to protect the state’s interests and ensure that Ghana derives maximum value from its hydrocarbon resources.
Local companies secure $4.9bn in contracts
Beyond cost savings, the Petroleum Commission says its regulatory framework has also contributed to increased Ghanaian participation in the upstream industry.
Ms Hardcastle said that since the implementation of the 2013 Local Content and Participation Regulations, indigenous Ghanaian companies had been awarded contracts worth US$4.9 billion.
That represents about 22 per cent of the total value of contracts awarded during the period.
Joint venture companies involving Ghanaian and international firms secured an additional US$7.9 billion, representing 35 per cent of total contracts.
According to Ms Hardcastle, the Commission’s objective is not only to increase Ghanaian ownership and participation but also to ensure that more value is retained within the local economy.
She said the regulator was working to prevent Ghana’s petroleum industry from becoming an enclave sector in which the majority of economic benefits remain outside the country.
The 15th anniversary celebration brought together former Chief Executives of the Petroleum Commission, industry stakeholders and other key players in Ghana’s petroleum sector.
The milestone provided an opportunity for the Commission to highlight its contribution to cost efficiency, revenue protection and local participation while outlining its continued role in safeguarding Ghana’s interests in the upstream petroleum industry.
