Petroleum Commission says regulatory reviews have saved Ghana US$2.2bn

The Petroleum Commission in Ghana asserts that its regulatory actions within the country's upstream petroleum sector have resulted in approximately US$2.2 billion in savings and potential financial gains for the state. These interventions encompass assessments of field development plans, procurement and tender processes, contractors' work programmes and budgets, alongside a recent audit of petroleum costs.

According to the Commission's CEO, Emeafa Hardcastle, evaluations of major field development plans have yielded around US$2 billion of the reported savings. The scrutiny of Greater Jubilee Full Field Development Plan alone yielded about US$1 billion in savings, while the review of Jubilee Plan of Development Phase 1A resulted in approximately US$210 million in savings.

The TEN Plan of Development review yielded around US$510 million in savings. Additional US$200 million was saved through a review of costs related to the OCTP SURF and T&I components. Hardcastle emphasized that these regulatory measures have consistently demonstrated the Commission's commitment to judicious stewardship of Ghana's hydrocarbon resources, thereby enhancing state revenue from hydrocarbon exploitation.

Beyond field development plans, the Commission continues to oversee procurement and tender processes to ensure that expenditures by upstream operators represent optimal value. Its regulatory oversight also extends to contractors' work programmes and budgets, enabling the Commission to evaluate proposed expenditure against approved activities.

A recent cost audit uncovered US$229 million in infractions within one of Ghana's contract areas, which have been excluded from allowable petroleum costs. This exclusion could potentially augment the state's future earnings through Corporate Income Tax and Additional Oil Entitlement. The Petroleum Commission's regulatory actions are designed not only to protect the state's financial interests but also to bolster accountability and efficiency within the upstream petroleum sector.

These revelations come as the Commission initiates activities to commemorate its 15th anniversary, highlighting its role in elevating Ghanaian participation in the upstream petroleum industry, as the regulatory work ensures that the benefits of the nation's oil and gas resources extend beyond direct petroleum revenues.