No revenue accruing from oil production in the Saltpond Field have been paid into the Ghana Petroleum Holding Fund as required by Law, Major Daniel Sowa Ablorh-Quarcoo, Chairman of Public Interest and Accountability Committee (PIAC) has disclosed.
He, however, said the total transfers to the Ghana Petroleum Funds in 2011 from the Jubilee Field liftings amounted to GH¢103,808,031.7, with the Ghana Heritage Fund being allocated GH¢31,142,409.51 constituting 30 per cent of the revenue whiles the Stabilization Fund had GH¢72,665,622.19 representing 70 per cent.
Maj Ablorh-Quarcoo who was launching the maiden annual report of PIAC Petroleum Revenue Management for 2011 in Accra yesterday said despite efforts by the committee to know the activities of the Saltpond Field, there were no records to show revenues for oil production from the field.
He said “the situation leaves much to be desired as the nation needs the total oil receipts into the Petroleum Holding Fund.”
The Ghana Petroleum Fund which consists of the Ghana Heritage Fund and the Ghana Stabilization Fund was established by law after the discovery of oil to receive cash receipts from the oil revenue.
While the Heritage Fund provides an endowment to support development for future generations when petroleum reserves have been depleted, the Stabilization Fund is meant to sustain public expenditure capacity during periods of unanticipated petroleum revenue shortfalls.
Mr Ablorh-Quarcoo said “though the level of production from the Saltpond Fields is quite low, with the daily average production of 700 barrels, monitoring of revenue from the field will contribute significantly to the Petroleum Holding Fund.
Explaining why there is the need to focus on Saltpond Field, he said, the field which was the premier oil field in Ghana lost its significance with the drop in oil prices in the 1980’s.
He said it was reactivated in November 2004 by a joint venture between Lushann Eternit Energy and Ghana National Petroleum Corporation to form the Saltpond Offshore Producing Company Limited (SOPCL) in the face of rising oil prices.
Major Ablorh-Quarcoo said, since the reactivation, thousands of barrels have been lifted, “yet nothing seems to be lodged in Petroleum Fund.”
He said the PIAC will, therefore, ensure that the activities at the Saltpond Oil Field as a matter of fact will be captured in the committee’s next report.
Major Ablorh-Quartet said “PIAC has also detected that GH¢9 million meant for Ghana Heritage Fund has erroneously been lodged into the Stabilization Fund.”
He said “the situation calls for immediate correction since both funds serve different needs, therefore are invested according to the purpose they were established.”
Major Ablorh-Quarcoo said the Bank of Ghana according to its reports indicated that both funds had been invested in Euroclear Bonds and the U.S Government Treasuries through the Federal Reserve Bank of New York.
He said the PIAC also observed that though investment Advisory Communities is supposed to provide broad guidelines and overall management strategies of the Petroleum Holding Fund to the minister of Finance, that constitutional mandate was compromised with the late formation of the Advisory Committee.
Major Ablorh-Quarcoo said in the absence of the Advisory Committee, the Ministry of Finance and the Bank of Ghana usurped the Advisory Committee’s role by directing how the petroleum Fund was to be invested.
He, however, stated that in spite of the absence of investment Advisory Committee, the types of investments made by the Bank of Ghana were appropriate under the circumstances.
The PIAC was established under the Petroleum Revenue Management Act, 2011, Act 815 to ensure successful utilisation of proceeds from oil and gas exploitation to secure the greatest social and economic benefit for the people of Ghana.
Members of the 13-member committee were drawn from professional groups, traditional rulers and civil society organisation.