The Public Interest and Accountability Committee (PIAC) has proposed to the Ghana National Petroleum Corporation (GNPC) to adopt the crude oil hedging trade strategy to boost crude oil sales revenue.
Crude oil hedging, also known oil risk management, is a contractual tool allowing a company to fix or cap an oil price at a certain level or period of time.
It is used to reduce or eliminate a company’s exposure to fluctuating oil prices.
According to Dr Steve Manteaw, Chairman of PIAC, international oil companies in the country, including Tullow Ghana Limited, Kosmos Energy Ghana among others, were recording positive outcomes in the form of higher revenue from their crude oil trade adding that it was time Ghana learn from its partners to maximise revenue from the oil trade sector.
“Almost all our partners are engaged in hedging which has consistently resulted in high turnovers. We must immediately learn from them and do the same as they are doing to improve revenue from our crude oil trade too,” he stated.
Dr Manteaw was speaking yesterday at a stakeholder forum on crude oil and natural gas marketing in Accra organised by PIAC in collaboration with the GNPC.
For an activity, which requires specialised skill and know-how, Dr Manteaw said PIAC was aware Tullow and others were prepared to pass on their expertise to Ghana and urged the GNPC to take advantage and learn hedging to ensure higher returns.
The PIAC, he said, was concerned by external economic transactions, which have the tendency to impact negatively on Ghana’s crude oil trade.
“These transactions include the CBD loan agreement by government which is tied to the Jubilee oil field and the Litasco loan agreement which is also tied to TEIN. Such agreement is a disruption to the achieved price of the crude oil. I am equally concerned as to whether some of the loan agreements are approved by Parliament,” Dr Manteaw he stated.
Rather, he said it was imperative the country focuses on crude oil trade and repay loans with the returns.
As part of its mandate, Dr Manteaw said the PIAC would develop a policy brief and share with government on how Ghana could enhance revenue from crude oil trade.
Chief Manager, Financial Marketing Department, Bank of Ghana, Nana Aba Ashun, advocated the establishment of a price committee to standardise the pricing option of crude oil and ensure the country attracts the highest price.
Dennis Baidoo, Manager of Marketing, GNPC, indicated that the GNPC was developing a buyer selection blueprint to enable the corporation select competitive buyers for Ghana’s oil.
Currently, the GNPC, he said, was working with the Organisation for Economic Cooperation and Development (OECD), which has the template, to come out with the blueprint.