A recent report by the Natural Resource Governance Institute has revealed that Ghana has so far made 5.2 billion US dollars from the sale of crude oil.
The report indicated that the amount realized was from the sale of 73 cargos of oil by the Ghana National Petroleum Corporation (GNPC).
The report titled “Ghana’s Oil Sales: Using Commodity Trading Data for Accountability” revealed that 5.2 billion dollars were realized between 2011 and April 2020.
This was generated from the sale of up of 71.1 million barrels.
Ghana is still a new producer, with the first production from its Jubilee field occurring in November 2010, and the first cargo sold in early 2011.
Despite the infancy of the country’s oil sector, it already represents a significant source of government revenue, with GNPC oil sales equalling nine percent of government revenue in 2019.
The report further indicated that the most valuable cargo sold by GNPC was the sixth lifting from the Jubilee field, sold in April 2012.
“This cargo consisted of 997,636 barrels of oil sold for a unit price of USD 125.90, equalling USD 125.6 million. Equally, GNPC’s lowest value cargo was the 54th lifting from Jubilee, sold in April 2020, following the oil price crash that occurred at the start of the coronavirus pandemic. This cargo holds 992,896 barrels of oil for a unit price of USD 12.24, equalling USD 12.2 million.”
To date, Ghana has only three producing oil fields, resulting in a smaller and less complex oil sector than neighbouring oil-rich countries with a longer history of production.
In 2017, Nigeria’s national oil company, the Nigerian National Petroleum Corporation (NNPC), sold 453 cargos of crude oil to 61 buyers totalling USD 13.2 billion or 241 million barrels of oil. In comparison, in the same year, GNPC sold just 10 cargos to four buyers totalling USD 523 million or 9.8 million barrels of oil, the equivalent to 4 percent of the value of NNPC’s oil sales. The relative simplicity of Ghana’s oil sector enables citizens to more readily hold the government and trading companies accountable for the state’s oil sales activities.
Some of the key findings of the report are;
• Ghana National Petroleum Corporation’s (GNPC) oil sales are a significant source of revenue, equalling nine per cent of government revenue in 2019.
• Ghana is highly transparent in reporting on its commodity trading activities. GNPC, the Ministry of Finance (MoF), the Bank of Ghana (BoG), the Public Interest and Accountability Committee (PIAC) and Ghana Extractive Industries Transparency Initiative (GHEITI) all disclose information on the state’s oil sales activities.
• As of the end of the second quarter of 2020, GNPC had sold 73 cargos of oil, made up of 71.1 million barrels with a total value of USD 5.2 billion.
• Oil sales revenues are directly determined by the prevailing oil price. The funds received for similarly sized cargos sold by GNPC ranged from USD 126 million in 2012 to just USD 12 million in 2020, following the oil price crash.
• The majority of Ghana’s oil revenue comes from its two long-term sales contracts with Russian trader Litasco and Chinese state-owned Unipec Asia, with the latter tied to the government’s USD 3 billion loans from China Development Bank. In 2019 revenue from these two sales contracts equalled 6 per cent of government revenue. These two deals alone generated 59 per cent of the government’s total oil revenue for 2019.
• The ability of civil society organizations (CSOs), government officials, journalists and other oversight actors to analyze GNPC’s oil sales activities is more important than ever. Low oil prices and the need to respond to challenges posed by the coronavirus pandemic heightens governance and corruption risks and exacerbates the state’s debt sustainability issues.
• NRGI has collected relevant publicly available information on every cargo sold by GNPC to date. This report demonstrates how such data can be used by CSOs, government officials, journalists and other oversight actors to hold the government, GNPC and trading companies accountable for how the state’s oil is sold and the resulting revenues are