Petroleum Debt Hits $2.8M as Oil Revenues Drop

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Petroleum Debt Hits $2.8M as Oil Revenues Drop

Rising Surface Rental Arrears in Ghana’s Petroleum Sector

Surface rental arrears in the petroleum sector have surged significantly, reaching US$2.82 million by mid-2025. This figure marks a substantial increase compared to the previous year, where arrears stood at US$439,011 during the same period. The Public Interest and Accountability Committee (PIAC) highlighted this trend in its half-year report, noting that collections had risen by 14.3 percent above the Ghana Revenue Authority’s (GRA) full-year estimate of US$755,235.

By the end of June 2025, GRA collected US$863,046 in surface rentals, which is one of the five primary revenue streams from the petroleum sector. The increase was largely attributed to payments made by several companies, including Goil Upstream Limited, Springfield E&P, OPCO, and Base Energy. However, out of the 13 licensed operators, only eight made payments during the reporting period.

Enforcement Measures and Defaulting Companies

The PIAC reported that GRA has initiated enforcement measures to recover all outstanding arrears, particularly those owed by three companies whose petroleum agreements were revoked by the Energy Minister for breaching contractual terms. These companies are UB Resources Limited, Britannia-U, and Swiss African Oil Company Limited, collectively owing US$1,728,124 in surface rental arrears.

The committee urged the GRA, Petroleum Commission (PC), Bank of Ghana (BoG), Ministry of Energy, and other relevant institutions to enhance collaboration in recovering these unpaid amounts. This call comes amid broader challenges facing the petroleum sector, with crude oil production declining by 25.92 percent between H1 2024 and H1 2025.

Decline in Petroleum Receipts

This decline in production led to a 56 percent drop in total petroleum receipts for the period, decreasing from US$840,765,266 in H1 2024 to US$370,343,681 in H1 2025. These revenues were sourced from various components, including Corporate Taxes, Surface Rentals (Acreage Fees), Crude Oil Liftings, and Interest on the Petroleum Holding Fund (PHF).

The breakdown of these revenues showed that Carried and Additional Participating Interest (CAPI) contributed the largest share at US$178,481,075, followed by Corporate Income Tax (CIT) at US$148,753,289. Royalties accounted for US$40,148,118, while interest on the PHF generated US$2,098,154. Surface rental payments totaled US$863,046, contributing less than one percent to the overall receipts.

Key Revenue Sources and Distribution

In terms of distribution, CAPI represented 48 percent of total receipts, CIT contributed 40 percent, and royalties accounted for 10.8 percent. Revenues from surface rentals and interest on the PHF each constituted less than one percent of the total.

The PIAC emphasized that with the implementation of the Petroleum Revenue Management Regulations (PRMR), 2019 (L.I. 2381), the GRA has maintained a strong effort to recover all outstanding payments related to surface rental taxes. The authority has also expanded its search beyond Ghana’s jurisdiction through the Exchange of Information (EOI) Unit to recover tax liabilities from the three defaulting companies.

Ongoing Challenges and Future Outlook

Despite these efforts, the continued rise in surface rental arrears and the decline in petroleum production pose significant challenges for the sector. The government and regulatory bodies must work together to ensure timely collection of revenues and maintain the stability of the petroleum industry. With the right strategies and collaborative efforts, there is potential to reverse the current trends and restore confidence in the sector.


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