GNPC Responds To PIAC’s Report

The Ghana National Petroleum Corporation (GNPC) has issued a release to clean itself from any wrong doing in relation its budget overrun in 2015.

In a statement released by the Corporation, it said, “GNPC actually underspent its budget for 2015, approved by Parliament.”

“Our forecasted revenue was US$228.05 million and our actual revenue was US$126.86 million. This shortfall was driven by the global fall in crude oil prices,” it added.

Comparing its budgeted expenditure of $291.90 million, the Corporation said the actual expenditure of $190.01 million represented a 35 percent underspend.

This is contrary to 2015 Public Interest and Accountability Committee’s report which cited the GNPC overspending its annual budget by about US$64 million.

The report shows that GNPC’s budget allocation for the year under review was a little over US$126 million but the company spent US$190.47 million to pay six month salary arrears of workers of the Saltpond Offshore Petroleum Company.

An amount of US$1.81 million was also spent on the maritime boundary dispute between Ghana and Ivory Coast as against US$782,407 spent in 2014 on the international arbitration.

The committee in its recommendations cautioned the GNPC to refrain from providing future guarantee’s to other state owned entities It also asked Parliament to ensure that the practice whereby GNPC will be requested to release parts of its allocations from petroleum receipts to government without prior approval from Parliament is discontinued.

GNPC in the release stated, “Our forecasted revenue was $228.05m and our actual revenue was $126.86m. This shortfall was driven by the global fall in crude oil prices. Irrespective of this fall in prices, we were contractually obligated to meet our share of costs in the Jubilee Field. Meanwhile, compared to our budgeted expenditure of $291.90 million, our actual expenditure of $190.01m represented a 35% underspend.”

“It is as a result of prudent financial management that we were able to fulfil our contractual obligations despite such a sharp decline in revenue. This is what enabled GNPC to make critical sector interventions, to ensure the smooth movement of gas to power plants, in order to stabilise the supply of power for industrial and domestic use.”

It further explained, “This includes the provision of road infrastructure in the oil and gas enclave in the Western Region, the guarantee that enabled Karpowership to bring in a power plant to alleviate load shedding, and meeting our obligations as a Joint Venture partner in the Saltpond Offshore Producing Company.

“The issues emanating from the Maritime Boundary dispute with Cote D’Ivoire could have a major impact on the entire oil and gas industry in Ghana if the eventual judgement is not in Ghana’s favour.

“Ghana has a strong case at the arbitration and so we have to ensure that we make the necessary representations ensure we secure the expected outcome for Ghana. The increases in costs are a result of required increased activity in 2015,” the Corporation added in its release.