Revenue from oil and gas
would be used to tackle poverty – President
Accra, Feb. 19, Ghanadot/GNA - Government has given
the assurance that revenue from oil and gas exploration would be used to address
challenges of poverty in Ghana through expenditures in priority areas of
education, health, rural development, infrastructure, water and sanitation.
Delivering his State of the Nation address in Parliament on Thursday, President
John Evans Atta Mills said other priorities will include investment in physical
and social infrastructure within communities close to the oil and gas production
activities, investment in a Future Generation Fund to ensure sustained well
being into the long-term and investment in technical training, scientific
research and development.
“The government has directed the Ghana National Petroleum Corporation (GNPC) to
exercise its option to acquire a unitised paid interest of 3.75 per cent in the
Jubilee field venture. The value of this share is $161 million. In addition to
establishing a regulatory framework for managing revenues for the benefit of
Ghanaians, GNPC will also focus on expense management for the Jubilee project to
ensure that development costs are fair and reasonable" He said.
President Mills added that GNPC should enforce local content policy where
Ghanaians would be able to participate significantly in oilfield support
services towards the development of the Jubilee field and other new prospects.
"Further intensification of exploration in the years ahead will be achieved by
GNPC continuing the active promotion of investment in the capital-intensive
petroleum sector. In addition to the Tano-Cape Three Points basin where recent
discoveries have been made in deepwater areas, other sedimentary basins that
GNPC will be encouraged to promote will include the onshore Voltarian basin
which covers a large part of Ghana's surface area but where very little
exploration has been undertaken to date" He said.
President Mills said government would review and get a full account of the
utilization of the TOR Debt Recovery Fund which had accumulated GHC720 million
or 7.2 trillion cedis as at December 31, 2008.
"The TOR has a mountain of debt which currently stands at GHC1146 million or
11.46 trillion old cedis. The current debt profile at TOR compares with a total
debt of GHC318.6 million or 3.18 trillion cedis as at December 31, 2000. The
current debt is due to unpaid debts on TOR's books, interests accumulated on the
old debt and subsequent losses as a result of under-recovery from the
ex-refinery pricing. The VRA also has a mountain of debt total debt exceeding
800 million dollars,” he said.
President Mills advised the Ministry of Energy to work with the Ministry of
Finance to develop and implement comprehensive remedial measures, especially
re-capitalization, that would ensure the long-term financial viability of the
power utilities.
"There should be Power Sector Financial Restructuring and Recovery Study that is
necessary to inform Government of Ghana budgetary decisions on re-capitalization
of the two power utilities plus the NED as well developing a Comprehensive
Financial Recovery Plan for the three power utilities", he said.
The President assured that the country's electricity capacity generation would
be increased from its current 1800MW to 5000MW within the medium term.
"The policy outlook for the electricity sector involves the generation of
electric power which shall be fully open to private and public investors as
Independent Power Producers. The anticipated increase in generation will enable
cost-effective supply to meet the nation's requirements including that of Volta
Aluminium Company (VALCO). There would be Regional co-operation and integration
in electricity supply as is being developed within the West Africa Power Pool (WAPP)"
He said.
The President said the measures would ensure the lowering of the cost of
producing electricity in Ghana and electricity tariffs that consumers pay.
GNA
