PUBLIC INTEREST AND ACCOUNTABILITY COMMITTEE The 2020 PIAC Annual Report is in fulfilment of PIAC’s statutory obligation under the Petroleum Revenue Management Act, 2011 (Act 815). The Act, as amended by the Petroleum Revenue ANNUAL REPORT ON THE Management (Amendment) MANAGEMENT AND USE Act, 2015 (Act 893), enjoins PIAC to publish an Annual OF PETROLEUM REVENUES Report. FOR JANUARY – DECEMBER 2020 Table of Contents Table of Contents ............................................................................................................................ ii List of Figures .................................................................................................................................... x List of Tables ..................................................................................................................................... xi List of Acronyms ........................................................................................................................... xiii Foreword ........................................................................................................................................... xx Executive Summary .................................................................................................................... xxii CHAPTER 1 ........................................................................................................................................ 1 1.0 INTRODUCTION ........................................................................................................................................ 1 1.1 Background .................................................................................................................................................. 1 1.2 Scope .............................................................................................................................................................. 2 1.3 Methodology .............................................................................................................................................. 3 CHAPTER 2 ........................................................................................................................................ 5 2.0 UPDATE ON IMPLEMENTATION OF PREVIOUS RECOMMENDATIONS .......................... 5 CHAPTER 3 ...................................................................................................................................... 12 3.0 DEVELOPMENTS IN THE UPSTREAM OIL AND GAS SECTOR ............................................ 12 3.1 COVID-19 and related Developments in the Upstream Sector ............................................ 12 3.2 Developments in the economy, work obligations and operations ..................................... 12 3.3 Developments in the Investment Climate .................................................................................... 14 3.4 Developments in Local Content and Local Participation ........................................................ 16 3.4.1 Status of the Local Content Fund ................................................................... 17 3.5 Developments in the Policy, Legal, and Regulatory Environment ...................................... 18 3.6 Exploration and Production Activities ............................................................................................ 20 3.6.1 Jubilee Field Operations ..................................................................................... 20 ii 3.6.2 Tweneboa, Enyenra Ntomme (TEN) Field Operations ........................... 22 3.6.3 Offshore Cape Three Points (OCTP) Field Operations ........................... 23 3.6.4 Deepwater Tano/Cape Three Points Field Operations .......................... 23 3.6.5 Voltaian Basin Project ......................................................................................... 23 3.7 Decommissioning of Saltpond Field ............................................................................................... 25 3.8 Operations of Maritime Boundary Secretariat ............................................................................ 26 3.9 Natural Gas Developments and Market Information ............................................................... 26 3.9.1 Gas Supply Interruption ..................................................................................... 26 3.9.2 Energy Sector Debt Servicing .......................................................................... 27 3.9.3 Natural Gas Clearinghouse (NGC).................................................................. 27 3.9.4 Institutional Alignment ....................................................................................... 27 3.9.5 Energy Commission Natural Gas Regulatory Updates .......................... 28 3.10 Update on the Reimbursement of the US$50 Million Loan to the Ministry of Finance 31 CHAPTER 4 ...................................................................................................................................... 32 4.0 PETROLEUM PRODUCTION AND SALES ............................................................... 32 4.1 Crude Oil Production ............................................................................................................................ 32 4.2 Gas Production ........................................................................................................................................ 34 4.3 Gas Export .................................................................................................................................................. 36 4.4 Cost of Production ................................................................................................................................. 40 4.4.1 Jubilee Field Costs ................................................................................................ 40 4.4.2 TEN Field’s Costs ................................................................................................ 41 4.4.3 Sankofa Gye Nyame Field’s (SGN) Cost .................................................... 42 4.5 Crude Oil Liftings .................................................................................................................................... 45 4.5.1 Jubilee Field ............................................................................................................ 45 iii 4.5.2 Tweneboah-Enyennra-Ntomme (TEN) Field.............................................. 46 4.5.3 Sankofa Gye Nyame (SGN) Field .................................................................... 47 4.6 Crude Oil Pricing ..................................................................................................................................... 48 Findings ............................................................................................................................................ 50 CHAPTER 5 ...................................................................................................................................... 52 5.0 REVENUE COLLECTION AND MANAGEMENT ............................................................................... 52 5.1 Receipts from Crude Liftings for Ghana Group .......................................................................... 53 5.1.1 Receipts from Jubilee Field Crude Liftings .................................................. 54 5.1.2 Receipts from TEN Field Crude Liftings for Ghana Group .................... 55 5.1.3 Receipts from Sankofa Gye Nyame (SGN) Field Crude Liftings .......... 55 5.2 Analysis of Petroleum Receipts ......................................................................................................... 56 5.2.1 Carried and Participating (Additional) Interest (CAPI) ........................... 57 5.2.2 Royalties ................................................................................................................... 58 5.2.3 Corporate Income Tax (CIT) .............................................................................. 59 5.2.4 Surface Rentals ...................................................................................................... 60 5.2.5 Interest Payments ................................................................................................. 62 5.2.6 Other Income ......................................................................................................... 62 5.2.7 Gas Revenue ........................................................................................................... 62 5.3 Sankofa Gye Nyame (SGN) Field ............................................................................. 63 5.3 Cumulative Petroleum Revenues (2011-2020) ........................................................................... 64 Findings ............................................................................................................................................ 65 CHAPTER 6 ...................................................................................................................................... 66 6.0 DISTRIBUTION OF PETROLEUM REVENUES ........................................................ 66 6.1 Receipts into the Petroleum Holding Fund .................................................................................. 66 6.2 Distribution of Revenues from the Petroleum Holding Fund ............................................... 67 iv 6.2.1 Distribution to the Ghana National Petroleum Corporation ............... 68 6.2.2