GNPC Explorco $561m oil revenues: Is Ghana due payment into Petroleum Holding Fund?

Ghana's GNPC Explorco has acquired a 7% stake in the Jubilee and TEN oil fields, prompting questions over whether it is due to pay $561m in oil revenues into the Petroleum Holding Fund (PHF).

The GNPC decided to acquire the stake from Anadarko Petroleum Corporation, which had inherited the interest through its acquisition of Occidental Petroleum in 2019. The stake was valued at $199 million, but after adjustments, the final amount paid was approximately $164.8 million. The GNPC bought the stake through a company called Jubilee Oil Holdings Limited (JOHL), which was incorporated in the Cayman Islands.

The acquisition was financed through an advance from the Ministry of Finance, and GNPC later explained that revenue generated from the asset would be used to repay the government. However, the Public Interest and Accountability Committee (PIAC) questioned why proceeds from the sale of oil through JOHL were not being paid into the PHF, as stipulated by Section 7 of the Petroleum Revenue Management Act (Act 815).

GNPC argued that JOHL and Explorco are commercial companies whose revenues are corporate income, not petroleum revenues due to the Republic. The corporation maintained that the revenues generated by JOHL were needed to meet cash call obligations, finance petroleum operations, and repay the Ministry of Finance advance.

But PIAC disagrees, and has written to the Finance Minister to demand that the $561m be paid into the PHF. The Finance Minister has yet to respond to this demand, leaving the future of the oil revenues uncertain.

The Petroleum Holding Fund (PHF) is an account established under the Petroleum Revenue Management Act to receive petroleum revenues on behalf of the state. The Fund is meant to be used for the development of the country's infrastructure, human capital, and social services.

But the controversy over GNPC Explorco's oil revenues highlights the challenges that Ghana faces in managing its petroleum resources.

### What it means for Ghana

The controversy over GNPC Explorco's oil revenues highlights the challenges that Ghana faces in managing its petroleum resources. The country relies heavily on oil revenues to fund its budget, and any delay in payment could affect its ability to meet its financial obligations.

The Finance Minister has yet to respond to PIAC's demand that the $561m be paid into the PHF, leaving the future of the oil revenues uncertain. The GNPC has refused to comment on the matter, fueling speculation that the corporation may be trying to hide something.

The controversy is a reminder of the need for transparency and accountability in managing Ghana's petroleum resources. The country must ensure that oil revenues are used for the benefit of the people, and not for the profit of a few individuals or corporations.