Ghana’s petroleum revenue has reached an all-time high, with the Petroleum Holding Fund (PHF) receiving a total of US$840,765,266 in the first half of 2024. This represents a significant increase of 55.6% from the US$540,456,124 recorded during the same period in 2023, according to the Public Interest and Accountability Committee (PIAC).
This surge in revenue marks the highest recorded income from the country’s oil sector since the inception of its petroleum industry in 2011, bringing the total cumulative petroleum revenue to US$10.69 billion. The increase in revenue comes from various sources, including corporate taxes, surface rentals (acreage fees), crude oil liftings, and interest on the Petroleum Holding Fund, among other income.
Crude Oil Production Shows Growth in H1 2024
The revenue boost can be attributed to higher production levels of crude oil in the first half of 2024, with 24.8 million barrels (bbls) of oil produced from the country’s three offshore oil fields—Jubilee, TEN, and SGN. This production figure represents a 10.7% increase compared to the 22.4 million barrels produced in the same period in 2023.
The increase in production was largely driven by the Jubilee Field, which saw a significant rise in output. According to PIAC’s 2024 Semi-Annual Report, Jubilee’s production surged by 25.1%, from 13.1 million bbls in H1 2023 to 16.4 million bbls in H1 2024. During this period, the field achieved an average daily production of 90,137.47 bbls—a substantial increase from the 72,449 bbls produced daily in the first half of 2023.
Jubilee Field Performance Drives Growth
March 2024 was the highest month for oil production from the Jubilee field, due to the ramp-up of the J03 P and J69-P wells after the commissioning of the J69-P well in late February. However, June saw the lowest monthly production, attributed mainly to facility upsets.
Despite this, production at the TEN and SGN fields experienced a decline during the same period. TEN saw a drop of 4.8%, from 3.6 million bbls in H1 2023 to 3.4 million bbls in H1 2024. The SGN field also recorded a 12.4% decline, from 5.7 million bbls in H1 2023 to 5 million bbls in H1 2024.
The decline in production at these fields was mainly caused by flow assurance issues and non-performance of key wells such as the En08-P and En10-P wells in the TEN field, as well as issues with facility upsets and the unavailability of gas compression systems at the SGN field.
Challenges and Adjustments in Production
The Petroleum Commission (PC) noted a slight reduction in overall production in 2024 due to efforts to manage high flaring rates. This was caused by technical issues with the low-pressure gas compressor (LPGC-A) and the Ghana National Gas Company Limited (GNGLC) processing plant. Furthermore, a malfunction in the triethylene glycol (TEG) contactor led to a cascading failure that shut down all gas compression systems. To minimize the impact of flaring, some wells were intentionally shut in.
The PC also reported that the Sankofa Gye-Nyame (SGN) field faced lower production volumes in February and June due to facility upsets and ongoing repairs of a gas turbine generator (GTG) caused by an electrical failure.
Cumulative Oil Production and Surface Rental Issues
As of June 2024, Ghana’s total cumulative oil production since its first oil in December 2010 stands at 633.2 million barrels. However, the report also highlighted ongoing issues with surface rental arrears, which remain at US$1.2 million, excluding amounts related to terminated petroleum agreements (PAs).
PIAC has urged the Ghana Revenue Authority (GRA) to take immediate steps to recover the outstanding surface rental fees and ensure that surface rental payments are made to the PHF by February 28 each year, as mandated by Regulation 5(1)(b) of LI 2381.
Looking Ahead: Oil Revenue Trends and Fiscal Implications
Ghana’s petroleum sector continues to play a vital role in the country’s economic growth. With the impressive growth in revenue in the first half of 2024, the government can look forward to a boost in funding for various national projects. However, it is crucial that the authorities address the challenges faced in production and the management of surface rental arrears to ensure sustainable revenue growth from this sector in the years to come.
In conclusion, Ghana’s petroleum revenue in H1 2024 is a positive sign for the country’s oil sector, reflecting increased production and improved revenue collection. But to maintain this upward trend, it will be essential to address technical production issues, streamline regulatory processes, and enhance transparency in revenue management.
