GNPC denies claims of not rendering account on oil revenues

By GNA
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By GNA

7/19/2012 11:01:19 PM -

Accra, July 19, GNA - The Ghana National Petroleum Corporation (GNPC) on Thursday dismissed as 'inaccurate' claims that it does not render accounts to the State for oil revenues.

In a statement issued in Accra by the Corporate Affairs Department, GNPC affirmed that it was in compliance with its statutory reporting and accountability obligations.

GNPC, it said, was audited by the Auditor-General every year and these audited accounts were submitted to all relevant Government Agencies including the Ghana Revenue Authority (GRA) in accordance with the Constitution and the Ghana National Petroleum Law.

'GNPC submits its annual work programme to Parliament for review and approval as required by the Petroleum Revenue Management Act, 2011, (Act 815),' the statement said. 'Indeed it is Parliament that approves the allocation of a portion of revenues from the Jubilee production to the corporation.

'GNPC has accounted to Parliament for its annual budget allocations from Jubilee revenue through the Ministry of Energy and Ministry of Finance and Economic Planning as required by the Petroleum Revenue Management Act (PRMA).'

It said it also regularly submitted financial statements and Quarterly Reports on its operations to the Minister of Energy, Minister of Finance and Economic Planning and the State Enterprises Commission.

'GNPC submits Daily Production Reports to the Minister of Energy, the Minister of Finance and Economic Planning, the Governor of the Bank of Ghana, the Commissioner-General, Ghana Revenue Authority, the Executive Secretary of the Energy Commission and the Chief Executive of the Petroleum Commission.'

GNPC said in 2011, Parliament allocated 207.96 million dollars from Petroleum Revenues to it and during the 2012 Budget hearings, GNPC accounted to Parliament through the Minister of Energy and the Minister of Finance and Economic Planning on the use of these funds.

It said 132,484,815 dollars (or 63.7%) went to repay part of the money GNPC borrowed from the Jubilee partners to pay for its 165.8 million dollars share of field development costs incurred since 2008; 30,315,185 dollars (or 14.6%) went towards the acquisition, processing and interpretation of 2,612 km² of 3D Seismic Data for the Southwest Deep

Tano block; 28,119,624 dollars (or 13.5%) was used in fabrication and installation of 14 km of deepwater pipeline as part of the Natural Gas Infrastructure Project; 7,661,475 dollars (or 3.7%) went to Staff costs and 9,383,204 dollars (or 4.5%) went towards General Operational and Administrative Expenditure.

'These receipts and expenditures are captured in detail in our 2011 financial statements currently undergoing external audit.'

GNPC also denied that that it withheld revenue from the Government.

On the Jubilee field production prospects, GNPC said: 'Contrary to think-tank IMANI's pessimistic assessment, the Jubilee field operations had been competent.

'Jubilee has delivered industry-leading operational and safety performance. The field was brought on-stream in record time and within budget. It has a record of 98% uptime and has suffered no lost time incidents. '

The statement said production had been lower than originally projected and both GNPC and Tullow, the Operator, had offered 'truthful public explanations' for the decline in production and explained the remedial works underway to reverse the decline.

'Also contrary to IMANI's claims, the Jubilee team's production projections for end-2012 and beyond are scientific and consistent with the results of the remedial works conducted so far and the pace of Phase 1A development.

'The Jubilee team has completed remedial work on three of the Phase 1 production wells and brought them back on-stream at increased rates and at reasonable costs. The Jubilee team plans to conduct similar remedial work on three more wells this year. The Jubilee team has also drilled two new Phase 1A production wells and one injection well. We will produce from these new wells in the last quarter of 2012.'

The statement said in the first half of 2012, Jubilee produced an average of about 63,000 bopd, adding that, Jubilee was currently producing at the same average rate even though at any particular point in time one well was off-line undergoing remedial work.

It said: 'As these wells and the new Phase 1A wells are brought on-stream we expect Jubilee production to peak at 90,000 bopd by the end of the year and to achieve an annual average of between 70,000 and 80,000 bopd for 2012. We expect to ramp up to plateau production of 120,000 bopd in 2013.'

GNPC described as 'misinformed' IMANI's allegation that the original Jubilee development costs were abnormally high.

It said IMANI sought to demonstrate its claim by comparing Jubilee costs with developments in Brazil and Angola and described the comparisons as 'superficial and simply unscientific'.

'Development costs are not the same across time or place,' GNPC said.

'We wish to assure the public that we take our responsibility to inform and engage with stakeholders very seriously,' GNPC said.

GNA

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