MINISTRY OF FINANCE Ghana Extractive Industries Transparency Initiative (GHEITI) 2015 GHEITI oil & gas REPORT APRIL 2018 Prepared by Boas and Associates Table of Contents Executive Summary……………………………………………………………...........………….........………ii 1.0 Background of EITI.................................................................................................................................. 7 1.1 GHEITI..................................................................................................................................................... 1 1.2 content and objective of the report................................................................................................................2 2. 0: Approach and Methodology........................................................................................................................4 2.1 Overview of the Oil/Gas Industry in Ghana............................................................................................. 5 3.0 Legal and Institutional Framework............................................................................................................... 6 3.1 Description of the main Laws and regulation........................................................................................... 6 3.2 Fiscal Regime............................................................................................................................................7 3.3 Regulatory Institutions for the oil/gas sector............................................................................................ 8 3.4 License Allocations.................................................................................................................................10 3.4.1: Acquisition of Oil Block.................................................................................................................10 3.4.2 License Registry...............................................................................................................................16 3.5 Contract………………………………………………………………………………………………..18 3.6 Beneficial ownership...............................................................................................................................19 3.7 State Participation................................................................................................................................... 20 3.7.1 Ghana National Petroleum Company (GNPC..................................................................................20 3.7.2 Ghana National Gas Co. (SOE)....................................................................................................... 24 4.0 Exploration & Development....................................................................................................................... 27 4.1 Jubilee Unit Area.....................................................................................................................................27 4.2 The status of the key projects as at December 2015 are as follows:.......................................................27 4.3 Production............................................................................................................................................... 33 4.4 Export......................................................................................................................................................35 5.0 Revenue Collection..................................................................................................................................... 37 6.0 Reconciliation............................................................................................................................................. 38 6.1 Scope of the 2015 GHEITI Oil/Gas Report................................................................................................ 38 6.2 Materiality...............................................................................................................................................38 6.3 Materiality thresholds..............................................................................................................................38 6.6 Reconciliation of Oil and Gas Benefits in 2015..........................................................................................45 6.10 Discrepancies........................................................................................................................................ 49 6.13 Sale of State’s Share of Production.......................................................................................................52 7.0 Allocation of Petroleum Receipts to GNPC, ABFA and GPF....................................................................58 7.1 GNPC...................................................................................................................................................... 58 7.2 DISBURSEMENT OF ABFA IN 2015.................................................................................................. 59 7.3 Ghana Infrastructure Investment Fund (GIIF)........................................................................................ 61 7.4 Expenditure of Ghana National Petroleum Corporation (GNPC)...........................................................61 7.5 Ghana Petroleum Funds.......................................................................................................................... 63 7.6 Sovereign Wealth Funds......................................................................................................................... 64 7.7 Subnational transfers...............................................................................................................................65 7.8 Description of Budgets and Audit Process..............................................................................................66 8.0 Contribution to National Economy............................................................................................................. 69 9.0 Observation and Recommendation…………….………………………………………………………….72 10.0 Conclusion……………………………………………………………………………………………….74 Appendices..………………………………………..……………………………….………..……………….75 Appendix 1: Expenditure of Petroleum receipt on other Petroleum projects………..…………...…………...76 Appendix 2: Performance of the Ghana Petroleum funds, 2011-2015…………………..…………….……...80 Appendix 3: Petroleum account of Federal Reserve Bank of New York………………..…………...……… 82 Appendix 4 Petroleum agreement currently in operation and the phase of operation……..………………….85 Appendix 5: Training allowance paid by exploration companies…………………………...………………...86 Appendix 6: Details of Reconciliation………………………………………………………..……………….88 Page | 3 GHEITI Oil and Gas Sector Report for 2015 List of Tables Table 3.1 Details of Active Petroleum Agreements...........................................Error! Bookmark not defined.4 Table 3.2 Status of Upstream Activity............................................................................................................177 Table 3.3 Third party financing arrangement................................................................................................... 21 Table 3.4 GNPC Operation Subsidiaries ……………..………………………………………………………22 Table 3.5 Disbursement the Western Corridor gas Infrastructure project ……….……..…………………….26 Table 4.1 Jubilee Area Equity.........................................................................................................................288 Table 4.2 TEN Development Area Equity........................................................................................................29 Table 4.3 Development in Exploration Activities.............................................................................................32 Table 4.4 Breakdown of Annual Production Volume from Jubilee Field (201-2015)..................................... 33 Table 4.5 Crude & Gas Oil Production in Months………………………..…………………………………..33 Table 4.6 Gas production in 2015...................................................................................................................334 Table 4.7 Utilisation of Jubilee Associated Gas in 2015................................................................................ 354 Table 4.8 Gas & Oil exported in 2015………………………….……………………………………………..35 Table 4.9 2015 Crude Oil Export....................................................................................................................355 Table 5.1 Revenue flow within the Oil/Gas Sector.........................................................................................376 Table 6.1 Petroleum Revenues received in 2015................................................................................................8 Table 6.2 Revenue streams used in the disbursement of.................................................................................. 39 Table 6.3 Companies that made payment to PHF ............................................................................................40 Table 6.4 Materiality threshold Analysis and Companies…………………………… …...………………….40 Table 6.5 Revenue Streams used in 2015 report...............................................................................................41 Table 6.6 Reporting Companies for 2015 Gheiti Report .............................................................................. 603 Table 6.7 Unilateral declaration......................................................................................................................626