The Public Interest and Accountability Committee (PIAC) has repeated its call on the government to use oil revenues on fewer projects, especially in the road sector, to ensure timely completion of the projects.
According to PIAC, which is the committee with oversight responsibility on the prudent management of the country’s petroleum revenues, the continued spending on several projects did not help in the early completion of the projects and as a result, there were a number of road projects that had stalled.
It also explained that using oil revenues as counterpart funding for projects was not the best; instead the government should focus on fewer road projects, and provide the necessary funding to ensure that the projects were completed on time.
“The Annual Budget Funding Amount (ABFA) allocation to road infrastructure should continue to be spent on fewer road projects so as to ensure timely completion of beneficiary projects,” PIAC said in its 2016 petroleum revenue management report.
The 2016 annual report of the committee said although the government reduced the number of projects that benefited from oil revenues in 2016, there was still the need to do more going forward.
“From an average of 51 road projects per year over the five years preceding 2016, the number of road projects supported by the ABFA dropped to eight in 2016, of which one was a new project compared to an average of 36 new projects that were being introduced each year from 2011 to 2015,” the report said.
Flaring of gas
The report stated that the committee was unhappy about the volumes of raw gas produced from the Tweneboa- Enyenra- Ntomme (TEN) field that were being flared in spite of the high demand for lean gas and other derivatives on shore.
It explained that 71 per cent of the gas produced in 2016 was flared.
With first associated gas export not due until August 2017 and non-associated gas not expected until 2018, the committee has predicted that a lot of gas would be flared during the first half of 2017.
It questioned why the construction of the US$100 million gas import/export subsea pipeline could not have been timed to coincide with first oil in August 2016.
PIAC stated that the period between August 2016 and whenever gas export from the jubilee field would be achieved would represent a missed opportunity to have earned additional revenue, reduce the cost of electricity generation and minimise the adverse environmental effects associated with the flaring of gas.
Potential competition for lean gas
The launch of the full year 2016 PIAC report, which comprised key findings and recommendations, also observed that the Ghana National Gas Company Limited (GNGC) supplied lean gas to another company (Wangkang) other than Volta River Authority (VRA) considering the fact that total lean gas produced by GNGC was insufficient to meet the combined demand of the VRA and the AMERI plant.
The Technical Manager for PIAC, Mr Mark Agyemang, said although the volume of gas supplied to Wangkang was less than one per cent of the total lean gas produced in 2016, the emergence of more credible off-takers, coupled with VRA’s inability to pay for gas supplied, could create serious competition for VRA for the supply of lean gas.
He added that the competition could become fierce when the proposed interconnection of the Western Corridor pipeline for a reverse flow of the Jubilee gas became a reality in the coming months.