By Kizito CUDJOE
The country recorded a nearly 28 percent increase of petroleum revenues in 2024, defying a continued decline in crude oil production and a fifth straight year without new petroleum agreements.
According to the 2024 annual report of the Public Interest and Accountability Committee (PIAC), total petroleum receipts reached US$1.36billion in 2024 – up from US$1.06billion the previous year.
The revenue boost was driven primarily by favourable global oil prices and increased payment of Corporate Income Tax (CIT) by international oil companies (IOCs), buoyed by Petro SA’s payment of additional oil entitlement from its operations.
This made it the second-highest annual return since Ghana began commercial oil production in 2010, with only 2022 yielding a higher revenue at US$1.42billion.
This increase comes as the Ministry of Energy struggles to reinvigorate exploration activity in the upstream petroleum sector. Despite renewed efforts to attract investment, no new petroleum agreement was signed in 2024 – marking the fifth consecutive year without a deal, the last having been inked in 2018.
The stagnation in exploration raises concerns about long-term sustainability for Ghana’s oil economy, especially as mature fields age and production wanes.
PIAC has long insisted that the absence of new contracts could deter future output growth, leaving government revenues more vulnerable to price volatility.
Crude oil production, according to the report, declined for the fifth consecutive year in 2024. Production has dropped from a high of 71.44 million barrels in 2019 to 48.25 million barrels in 2024, representing a year-on-year (y-o-y) decline of 0.01 percent and a five-year average decline of 7.4 percent. This compares with production for the 2023 year, where a total of 48,247,036.61 barrels (bbls) was produced from the three producing fields – Jubilee, Tweneboa-Enyenra-Ntomme (TEN) and Sankofa Gye Nyame Field (SGN).
The country’s oil-funded sovereign wealth funds reflected cautious optimism. According to PIAC’s report, the Ghana Heritage Fund (GHF), set aside for future generations, grew by 20.31 percent in 2024.
The Ghana Stabilisation Fund (GSF), used to cushion the budget during oil revenue shortfalls, also posted a modest 3.46 percent increase in reserves despite withdrawals. Combined, the Ghana Petroleum Funds (GPFs) saw a 17.71 percent growth in reserves; rising from US$1.24billion in 2023 to US$1.46billion by the end of 2024.
PIAC also noted that US$145.7million in liftings by Ghana National Petroleum Corporation’s (GNPC) Explorco was not paid into the Petroleum Holding Fund (PHF).
This brings the cumulative proceeds of unpaid revenue into the PHF held by JOHL and subsequently GNPC Explorco to US$488,790,045 as at the end of 2024.
“GNPC argues that proceeds from liftings by GNPC Explorco do not constitute payments into the PHF,” said PIAC chair Constantine Kudzedzi.
Furthermore, PIAC reported that Surface Rental arrears owed by some IOCs remained high at US$2,893,120 as at the end of 2024. “About 60 percent of these arrears are due to three (3) companies whose Petroleum Agreements were terminated in 2021.”
For the period under review, PIAC also noted that there was no allocation of the Annual Budget Funding Amount (ABFA) to the Industrialisation Priority Area. “This undermines the essence of prioritisation as envisaged by the Petroleum Revenue Management Act, 2011 (Act 815) as amended,” PIAC’s chair stressed.
“There is a worrying development wherein some loan obligations – initially borne by GNPC on behalf of the state in respect of Karpowership and Litasco guarantees – are being offloaded to GNPC Explorco.
“This will potentially saddle Explorco with debt and defeat its purpose as a solely commercial wing of GNPC capable of sustaining the Corporation when it no longer benefits from PHF disbursements.”
Against this backdrop, the Committee in its recommendation reiterated the need for government to expedite action to attract investments into Ghana’s upstream petroleum industry.
Also, it maintained that proceeds from liftings by GNPC Explorco constitute indirect participation of the state and therefore must be paid into the PHF.
PIAC chair, Constantine Kudzedzi
