Every well has a life span and some of these wells, after 10 years, would probably have peaked and after peaking, the natural thing is decline.
What it means is that if we continue to depend on the pre-existing wells then, we would not run fully and would have zero fuel to drill.
So the recommendation here is that we speed up the sustainable development for our exploration so that we can discover more wells.
This means we would drill more.
We are asking the GNPC to expedite action on the exploration of the Voltarian basin so that we can now reap more results.
Also, if it is possible to sign new contracts and invite more IOCs to come and ensure that activities at the Keta Basin are intensified.
The Tano deeper water and Oti all have potentials that we need to expedite action in these areas.
So, once we do that, we would reverse the decline and then hit more oil and rely on it for our development.
SDA: Are we getting the investors and is it possible to get?
AASA: The investors are there and are ready.
We need to open up the space more.
Unlike previous times when Ghana was considered to be risky, currently, we are de-risked and once we are de-risked, it means that the floor is more fertile for investors to come in, and I think investors are ready to come.
What we need to do is to open up the space wider and do the invitations.
There are some who are already here.
We have gone out to do road shows to invite more investors and we can intensify that effort and ensure that they are there and even those who are already here, we have recently terminated four agreements because of performance.
What it means is that if the regulatory regime is intensified, those who are already there doing the exploration would work harder than before and get us to where we ought to get to be.
SDA: You have been doing oil for the past 10 years.
Over time, what has come to the country now is about $8.9 billion.
Last year alone, we did about $1.4 billion.
Are you satisfied with the way we’ve utilised the resources that are coming from the oil fields?
AASA: Thankfully in Ghana, we have a regime that oversees the spending prospects.
And so largely, that has influenced our activities and we think that yes, Ghana has done better with the utilisation of our resources much more than any other country that earlier discovered oil.
However, there is still room for improvement.
We can do much better than we have done now.
For instance, we have a portion of the revenue that goes to the ABF to support our annual budget funding.
Now, sometimes there are challenges with releasing money to agencies who have been allocated funds to do certain projects.
But if we delay, what happens is that there is a cost overrun and a project that is supposed to cost GH¢1 million might at the end of the day cost GH¢2 million or more, and that is not an effective way of releasing revenue.
So we have to be mindful of the release of money and then, more importantly, to stop the thing from spreading.
For example, in one year about 5,000 projects were earmarked to be funded by the ABF.
That is not the best way.
We need to have what we call target projects and have a monumental project that can last for generation upon generation and can see that this is the benefit that is coming out for our yearly revenue.
For example, we’ve spent about GH¢30 million or so on terminal three.
That is profound.
If we can dedicate oil money to funding, for example, the Accra-Kumasi road; the dualisation of it and make sure that we do it in a year or two, that will be good.
We can target the Accra-Takoradi road, which has become a death trap for our road users.
And we can dedicate oil money to do that.
Rather than spending money on boreholes and CHPS compounds.
We are not saying that those are not important per se but there are other tax revenues we can use so that oil revenues are targeted at those monumental projects.
That is what we think will help and when we do that, we would say that we have utilised our oil revenues sustainably.
Other recommendations
The PIAC in its 2022 report urged the government to engage potential upstream producers on the viability of developing their gas fields for future gas utilisation.
Other than that the country would have to rely on Liquefied Natural Gas (LNG) import and other regional sources to meet gas demand.
It wants the Public Utilities Regulatory Commission to be more responsible for defining the detailed methodology to be used for the gas processing fee, transmission tariff and distribution charges, specifying procedures for periodic price reviews, providing an indexation formula to protect the real value of the prices between major reviews and defining circumstances for exceptional reviews to take place.
Gas sub-sector
The committee established a need for an amendment in the petroleum legal framework to set gas apart from crude oil and create a distinctive gas fiscal regime.
The role of gas aggregator and signatory to gas sales agreements can be addressed as well through the amendment.
PIAC again wants the government to consider developing distribution pipelines, especially in Tema, Accra and Takoradi enclaves, to deliver gas to industrial gas users.
The committee is of the view that although the private sector through Private Public Partnership (PP) can be roped in to secure appropriate investment for key infrastructure, sustainable technology and procedures can be employed to reduce the carbon footprint to curtail the energy transition issues and attract foreign investors into the Ghanaian gas market.
We also need to intensify efforts towards the discovery of additional gas reserves.
There is a need for the country to speed up the sustainable development of its petroleum resources to reverse the decline in petroleum production, through the attraction of new investors, as well as early completion of ongoing projects.
In its recommendations, the committee urged the Ghana Revenue Authority (GRA) to intensify its efforts in the collection of surface rental arrears.
Pay to fund
The report makes a strong case for crude oil receipts from Jubilee Oil Holdings Limited to be paid into the Petroleum Holding Fund since it forms part of the country’s petroleum revenue.
Priority
In the disbursement of funds to the District Assemblies Common Fund, the Minister of Finance (MoF) should comply with the decision of the Supreme Court of Ghana, PIAC pointed out.
Having selected industrialisation as a priority area, PIAC wants the government to show more commitment by investing more in industrial development.
Towards that, MoF should comply with the relevant provisions of LI 2381 in determining the cap on the Ghana Stabilisation Fund.
source:https://www.graphic.com.gh/