Conspiracy or Accident, Threat to Ghana’s $584 Million Oil Revenue


The desire of Ghana to rake in $584 million from oil revenue in the 2011 fiscal year appears to be in danger following the discovery that the metering system on the export line at the Jubilee Fields is defective.

The authorities are said be using the dip meter bars to measure the oil, which is not as effective as the electronic meters on the pipeline.
To make matters worse, Tullow Oil, one of the partners in the Jubilee fields, is also said to have disconnected a monitoring device installed by the Ghana Revenue Authority (GRA) to independently monitor crude oil being exported.

Tullow claims the device was interfering with their operations, hence their decision to disconnect it.

Presenting the 2011 Budget Statement to parliament last year, the Minister of Finance, Dr. Kwabena Duffuor, projected that Ghana would earn $584 million as revenue from oil this year, which represents 1.9% of the Gross Domestic Product (GPD).

Stakeholders are, however, raising concerns as to whether this target could be achieved with the discovery of the defective meter. The Ghana Revenue Authority (GRA), which first raised the issue, said they were unable to properly assess tax liabilities because of the problem.
The Ministry of Energy has confirmed that the meter on the export line, which measures the number of barrels of crude exported to enable the tax agencies assess the tax liabilities, has not been working for some time now, but insisted that the people of Ghana had not been short-changed.

The Public Relations Officer of the Minister of Energy, Edward Bawah, told The Chronicle that the Ghana Revenue Authority was involved in all the petroleum negotiations, and that if the meter on the export line was not working, they could fall on the Ghana National Petroleum Corporation (GNPC) to access the data they want.

Bawah disagreed with the argument that the use of the dip meter bar would not ensure proper monitoring of the oil, arguing that the same systems were being used in other jurisdictions.

He noted that when the report about the faulty meter was reported to the Minister, he ordered that the device be immediately replaced.

According to him, an order had been placed to manufacture new meters, which would arrive in the country in June, this year, to replace the defective one.
The Director in charge of Exploration at the Ghana National Petroleum Corporation (GNPC), Mr. Thomas K. Manu, told Joy FM yesterday that all the meters installed on the exploration rig (FPSO Kwame Nkrumah) were working, except that of the export line.

He noted that because of the dip meter bar being used, it would be very difficult for any of the partners to steal the crude oil.

The Coordinator of the Civil Society Platform on Oil and Gas, Mr. Amin Anta, however, said if nothing was done about the defective meter, it would affect our oil revenue.

“Since the measuring instruments were installed on the FPSO, they (GBS) have not been able to examine the calibration to see whether they are up to standard.

The only reason they have given is logistical constraint,” he stated in an interview he granted Joy FM yesterday.
The Director in charge of Communications and Public Affairs at the GRA, Mr. Francis Kofi Andoh, admitted that his outfit had challenges facing their operations at the FPSO, but ruled out any revenue loss to the state.

He said in a telephone conversation yesterday that per the Petroleum Management Act, the GRA had been mandated to collect and account for all petroleum revenues.

In pursuant of this, the GRA set up a Petroleum Unit at the Customs Division to monitor oil produced, exported, and revenue due the state. The FPSO has also been declared a customs area.

Andoh, however, noted that the GRA was facing challenges in the execution of this mandate. He noted that flow meters installed by Tullow had not been functioning properly, and the only means to measure the oil was through tank dipping.

He noted that though the development was not causing a revenue loss, and that the meters were the best means to monitor the oil.
Mr. Andoh further noted that another challenge facing the GRA was the alleged refusal by Tullow to allow more than one customs officer at the FPSO.

He also noted that a call made by his outfit to also have an independent means of communicating with custom officers on the FPSO has also been turned down by Tullow, because it would interrupt their operations.

According to Andoh, the GRA must independently monitor the data being transmitted by their officer on the rig, by communicating with him through satellite phone, and also have separate internet access to him, but all these have been blocked by Tullow.

He, however, said the issue had been discussed at the Energy Ministry, and hoped solutions would be found to them.

All efforts made by this reporter to get Tullow side of the story proved futile, as the Director of Public Affairs, Dr. Tony Aubynn, failed to pick the numerous calls put through to his mobile phone.