4.5 million barrels of oil ‘missing’ - Danquah Institute

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Over 4.58 million barrels of crude oil produced from the Jubilee fields are unaccounted for as Kwabena Duffuor, Finance Minister under the ruling National Democratic Congress, and Tullow Oil have on separate occasions stated different production figures for the same period under review. Using the average crude oil price over the material period of January-September 2011, the missing barrels add up to $493.5 million or $458 million, going by the lower hedging price that the Government bet its crude oil sales on. Paragraph 58 of the 2012 budget presented by Dr Duffuor on the 16th of November 2011 states: “Actual production from January to September 2011 is 17.42 million barrels. It is expected that 2011 will close with an annual oil production of 24.78 million barrels.” However, just a week earlier, on 9th November 2011, a press statement by Tullow Oil, the largest partner in the Jubilee Field project, stated that during the same period under review, “over 22 million barrels of oil have been produced and 21 oil cargoes have been safely exported.” The disparity in these production figures put out by the NDC government and Tullow Oil has raised further doubts over transparency in the actual volumes of crude oil being lifted from Ghana. Earlier this year, anxiety gripped the nation over allegations of improper accounting of how much oil was being drilled following the reported malfunctioning of flow metres on the FPSO Kwame Nkrumah. This malfunction appeared to have been glossed over by the operators of the FPSO until a leading civil society advocate on oil and gas of Ibis Ghana, and a fellow of the Danquah Institute, Mohhamed Amin Adam, raised alarm over it in May. It was not until August 2 that the flow metres were fixed. In a related worrying development, despite the fact that new metres have been installed, it is reported that the calibrations on the production line metres of the FPSO have not yet been verified by the Ghana Standards Board. In an article written by the same Mohammed Amin Adam, he states that one of the major problems of oil producing countries in our region and which has promoted oil theft has been metre tampering. According to him, the NDC Government has failed to provide the Standards Board with the logistics or resources to hire reputable organisations to partner them in verifying the newly installed flow metres. As a result of this, Ghanaians cannot be sure if the new metres have not already been tampered with, and wrong declaration of crude oil quantities made since no verification has been done, he argues. “It is equally appalling to hear that Tullow blocked the use of electronic seals installed on the flow metres for independent verification of oil exports on the excuse that they were not factored into the design of the FPSO when it was built. Thus, the onshore centre established by the Ghana Revenue Authority to which electronic data will be transmitted from the electronic seals has become a waste on Ghana’s finances,” the oil and gas expert says. Mr Amin Adam says, as a country, we cannot, therefore, be sure if the reported oil export data reported to the Ghana Revenue Authority by the two CEPS officers is correct since there is no independent verification by the Ghana Revenue Authority. In light of these developments, Mr Amin Adam implored Government to be proactive in the design of the new FPSO for the exploitation of Enyera-Tweneboa fields so as to ensure that provisions are made for the installation of GRA’s electronic seals for independent verification of oil production and exports. “This has become important because failure to do this at this time will result in Tullow blocking the use of the onshore electronic centres in the new FPSO, a situation that has already caused financial loss to the state,” he says. The phenomenon, currently ongoing, where the Ghana Revenue Authority is being prevented from using its own mechanisms to assess and collect revenues from the export of oil, according to Mr Amin Adam, contravenes Section 15 of the Petroleum Income Tax Law and PNDC Law 188. These laws, according to Mr Amin Adam, empower the Commissioner of Taxes or his agents to enter any premises without prior notice for the purpose of assessing and collecting taxes due the Republic of Ghana. “It is sad that government has been silent on this,” he says. In addition to the Standards Board’s off-shore monitoring, Mr Amin Adam calls for regular independent international certification of the functioning and the performance of all measuring instruments including production and flow metres.