Government has spent a total of GH¢111,959,738 million representing 14.1 per cent of the Annual Budget Funding Account amount of GH¢516,834,831 on capacity building for the oil and gas sector in 2012.
The Ghana National Petroleum Corporation (GNPC) on its part also spent a total of GH¢3 million on capacity building for the same year.
The report of the Finance Committee of Parliament on the 2012 and 2013 annual reports on the petroleum funds has revealed that the amounts were spent as part of GNPC’s mandate to build national capacity in the fields of Oil and Gas.
According to the report, the discovery and commercial production of oil has necessitated the continuous development of “national capacity to allow for greater local participation in the industry.”
The committee’s report also noted that “according to experts, if it is left to the individuals alone to develop their capacities, it could take about 15 years for the requisite capacities to develop by which time the petroleum resources might be near depletion.”
The committee further observed that the staff cost for GNPC increased from US$7,661,475 representing three per cent of the allocated amount in 2011 to US$9,013,162 in 2012.
But, according to the report, it was explained that “with its expanding role, GNPC had to invest heavily in hiring industry specific talents needed to execute its strategic goals. It was further added that with the influx of international oil companies on the local front, it was important for GNPC to ensure that it does not lose its staff to competitors.”
The report indicated that except gas receipts, which were not realized, all the sources of petroleum receipts had outperformed their targets by end of September 2013 with corporate income tax receiving an amount of US$172.22 million as at end of September 2013.
It was explained that the amount included a receipt of US$40.2 million, which 2012 corporate tax assessment was paid in the first quarter of 2013.
It was also stated that the corporate income tax received as at the end of September 2013 exceeded the Annual Budgeted Amount of US$55.86 million and the contribution of corporate income tax was 24.36% of the petroleum receipts for the same period, compared with 54.48% from Carried and Participating Interest, 21.06% from Royalties and 0.1% from Surface Rentals.
The committee also observed that the one per cent fee charged by the Bank of Ghana as administrative cost was too high and thus called on the “Bank to review downwards the transfer charges.”
Analysis of the 2012 petroleum receipts showed that the year experienced an improvement in production of crude oil amidst initial production difficulties in the first two quarters of the year with a total volume of 26,351,278 barrels of crude oil produced in 2012, representing an increase of 8.9% over the 2011 production levels.
The GNPC lifted crude five times on behalf of the State and this amounted to 4,931,034 barrels and yielded US$541.07 million.
In 2012, the report said the turbulence in the global financial markets and general economic downturn caused monetary authorities to take drastic expansion measures to inject growth stimulus but the Ghana Petroleum Funds “delivered positive returns on invest.”
In 2013, the report indicated that there was a positive variation due to the realization of more corporate income tax than projected on one hand and increased production, on the other, with approximately US$125.56 million over the 2013 Budget estimate.
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