Ghana Gas owed $306 million by VRA

Ghana Gas owed $306 million by VRA

The Public Interest and Accountability Committee (PIAC) has called on the Ministries of Finance and Energy to urge the convince the Volta River Authority (VRA) to clear its debts to the Ghana National Gas Company.

According to the committee this would help prevent VRA’s debts to Ghana Gas from going beyond the current levels and significantly hindering the work of the Ghana Gas Company.

PIAC made the recommendation in its 2016 semi-annual report.

According to the report, VRA accounts for US$306.10 million; 89.9 percent, of the total indebtedness to Ghana Gas of US$340.49 million as at June 30, 2016.

Ghana Gas was able to collect only US$17.17 million, representing 16 percent of its expected receivables of US$104.13 million for the period under review.

PIAC also called on the government to consider resuming its hedging programme on crude oil export in order to mitigate the impact of the volatility of crude oil prices on the world market.

Among key findings contained in the report was a reduction in crude oil production from the jubilee field from 1908 million barrels in mid-year 2015 to 11.44 million barrels in the same period in 2016; a 40 percent decline.

The report attributed the cause of the decline to a combination of scheduled shutdown of the FPSO for routine maintenance and a faulty turret which led to suspension of production for up to 50 days.

Liftings by the Ghana Group amounted to 1.95 million barrels, representing 18.48 percent of total Liftings from the Jubilee Field between January and June 2016, a decline of 39 percent compared to that period in 2015.

It also noted that conscious effort be made to ensure better targeting of the Annual Budget Funding Amount (ABFA) allocation to help maximise its impact.

“The selection of new priority areas to benefit from the ABFA for the next three years must be underpinned by detailed evaluation of the ABFA expenditures over the past six years,” it stated.

Total revenues from the petroleum sector for the first half of 2016 amounted to US$126.41 million, a reduction of 55 per cent compared to 2015 and representing only 50.35 percent of projected half-year revenues.

“Approximately US$87.15 million of the total petroleum receipts was distributed during the period under review,” the report said, adding that the 52 percent of this amount was allocated to the ABFA.

The Committee noted however that the figures contained in the report were those received from the authorities and not yet verified by PIAC.

“PIAC intends to undertake a physical monitoring, verification and value analysis of major projects, crude oil liftings, ABFA and GNPC spending for inclusion in the annual report.

By: files from PIAC and GNA/Ghana

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