Ghana’s Public Interest and Accountability Committee (PIAC) has asked the Ministries of Finance and Energy to urgently prevail upon the Volta River Authority, the country’s biggest electricity generation and distribution company, to settle its debt to the Ghana National Gas Company amounting to more than 300 million US dollars.

This is necessary to prevent the VRA’s debts to GNGC from spiralling to unmanageable proportions and thus compromising the viability of the GNGC. The PIAC was set up under an Act of Parliament to monitor the use of the nation’s oil and gas revenues.

The PIAC’s 2016 semi-annual report published on its website says the VRA alone accounts for 306.10 million USD, or 89.9 per cent, of the total debt owed to the GNGC of 340.49 million USD as at June 30, 2016.

The GNGC, according to the report, was able to collect only 17.17 million USD of this debt, representing 16 per cent of its expected receivables of 104.13 million USD for the period under review.

The PIAC also recommended that the GNGC fast-track the inter-connection of its onshore pipeline to the West African Gas Pipeline to create a new market for its lean gas in the event of the VRA continuing to default in honouring its obligations.

The PIAC also urged government to consider resuming its hedging programme on crude oil export in order to mitigate the impact of volatility of crude oil prices on the world market.

Average price achieved for Ghana’s Jubilee Crude in the period was 40.21 USD per barrel compared with a benchmark price of 53.03 USD, while the international oil companies (IOCs) operating in the Jubilee Field obtained higher values ranging between 54.46 USD and 73.21 USD per barrel.

Among key findings contained in the report was a reduction in crude oil production from the Jubilee Field from 1908 million barrels in mid-year 2015 to 11.44 million barrels in the same period in 2016; a 40 per cent decline.

The report attributed the cause of the decline to a combination of scheduled shutdown of the Floating Production, Storage and Offloading (FPSO) unit for routine maintenance and a faulty turret which led to suspension of production for up to 50 days.

Liftings by the Ghana Group amounted to 1.95 million barrels, representing 18.48 per cent of total liftings from the Jubilee Field between January and June 2016, a decline of 39 per cent compared with the same period in 2015.