Two Years Of Jubilee Fields Operation: 2011 And 2012

On 21st December, 2012, I released a short article titled “The Jubilee Fields: Losses Suffered by Ghana.” It was carried by a number of websites all over the world before it was blocked by some unknown person/s if one googles for it. For the benefit of those who did not have access to read it, they can follow the link below to read it in order to put into context the current analysis of the operations of the JUBILEE FIELDS for the past two years. This presentation provides the figures to back my earlier position.

http://www.spyghana.com/the-jubilee-fields-losses-suffered-by-ghana/

Below is presented the released operational figures for the operation of the Jubilee Fields for the period in question, and comparisons of earnings under the Royalty Tax System and Production Sharing System.

TABLE OF OPERATIONAL RESULTS OF JUBILEE FIELDS FOR 2011 AND 2012

Table 1 2011

Table 2 2012

The analysis of the operational results of Jubilee Fields in Tables 1 and 2 above for 2011 and 2012 indicates Ghana had 16.1% and 15.7% respectively which translates into an average of 15.9% of the total volume of 55,758,601 barrels lifted worth US$6,230,733,717 (see Table 3 below). Of these amounts, Ghana had 8,861,223 barrels worth US$ 990,197,044. The foreign oil companies had 46,897,378 barrels worth US$5,240,536,673 representing 84.1% under the Royalty Tax System. The foreign oil companies claimed they invested about 4 billion dollars into the project in all, therefore in the layman's understanding, they have recovered their total investment in two years and made a profit of US$1,240,536,673. In spite of this massive windfall, they claimed they were making losses and will not pay taxes!

Table 3 POSITION UNDER ROYALTY TAX SYSTEM 2011 – 2012

NOTE: The average price of US$ 111.7448 per barrel for the two years was used for the computation

In subsequent Tables 4 to 7 are presented what Ghana's position would have been if the Jubilee Fields were operating under the Production Sharing Agreement (PSA) and the losses therein suffered due to the prevailing Royalty Tax System (RTS).

Table 4 POSITION UNDER PRODUCTION SHARING AGREEMENT 2011 - 2012

NB: GNPC gave 10,000 barrels as production cost per day and 10,500 barrels as capital cost recovery per day, or their cash equivalent in the Daily Graphic of 10th July 2008.

If Ghana was operating under the Production Sharing Agreement, Ghana would have received a total of 25,591,332 barrels of oil worth US$ 2,859,698,276 representing 45.89% (see Table 5 below).

Table 5 TOTAL DUE GHANA

The foreign oil companies would receive 30,167,296 worth US$3,371,035,441 representing 54.11% (see Table 6 below). This is the most generous, equitable and fair deal under any production sharing agreement any progressive country wanting to maximize benefits from its oil and gas resources can enter into in order to attract investors to start with, not surrendering our sovereignty over our resources to foreigners as has happened in Ghana's case.

Table 6 TOTAL DUE FOREIGN COMPANIES

For not operating under the production sharing agreement, Ghana lost US$ 1,869,501,232 within two years of operation of the JUBILEE FIELDS (see table 7 below).

Table 7 LOSSES SUFFERED BY GHANA OPERATING UNDER RTS: 2011 & 2012

Ghanaians, wake up from your slumber and shine your eyes. Madam Ngozi Okonko-Iweala, Minister of Finance of Nigeria and a former Managing Director of the World Bank, has come to warn us, and nobody should take her warnings lightly because it is coming from the horse's own mouth.

By: Solomon Kwawukume [email protected]

Author: Ghana's Oil and Gas Discoveries: Towards full Maximum Benefits