H1 2020: US$310.14 million received into the Petroleum Holding Fund

In the first half of 2020, a total amount of US$310.14 million comprising lifting proceeds of the Ghana Group, surface rentals, Petroleum Holding Fund (PHF) income and corporation income tax was received into the PHF, the 2020 the petroleum holding fund & Ghana petroleum funds semi annual report, has said.

Total petroleum revenue distributed was US$322.57 million. GNPC received US$80.41 million, Annual Budget Fund Arrangement (ABFA) received US$169.50 million whiles Ghana Stabilisation Fund (GSF) and GHF received an allocation of US$50.85 million and US$21.79 million respectively during the period under review.

GHF and GSF total return year to date (YTD) was 5.28% and 0.39% respectively. Realised income on the GPFs in H1 was US$8.57 million (GHF contributed US$7.14 million and GSF contributed US$1.43 million) as compared to H1 2019 total net realised income of US$11.20 million (GHF contributed US$6.72 million and GSF contributed US$4.48 million).

GSF and GHF accumulated reserves were US$133.34 million and US$608.54 million respectively.

As far as the performance of the Ghana Petroleum Funds is concerned, in the first half of the year, the difference between the U.S. 10-year Treasury note yield and the 2-year note yield widened by 29.88% from 18.76 % in January 2020 to 48.64% at the end of June 2020,

This follows a 9.62% increment from 24.82 % in June 2019 to 34.44% in December 2019. The U.S Treasury launched a 20-year treasury bond for the first time since 1986 to help fund borrowing during the period under review.

The 3-month Treasury bill fell by 141 bps from 1.54% to end Q2, 2020 at 0.13%.

The U.S 10-year Treasury note yield fell by 85 bps from 1.51% in January 2020 to 0.66% in June 2020, while the yield of the 2-year note tumbled by 116 bps from 1.31% in January 2020 to 0.15% at half year-end leading to a steepening of the yield curve.

Among the reasons accounting for this steepening of the yield curve were the net improvement in risk sentiment over reopening of the U.S economy, potential success in coronavirus vaccine development, upside surprise of the U.S May employment situation report offset by renewed geopolitical and social unrest, U.S-China trade tensions and health warnings of a premature reopening.

The general fall in yields across all tenors during H1 led to an increase in the capital appreciation of bonds as prices increased, improving the marked- to-market performance of the Ghana Petroleum Funds.

Total return on investment of the Ghana Heritage Fund (GHF) year to date (YTD), (1st half of 2020) was 5.28% as compared to 4.71% (1st half of 2019). The two-year annualised return (2Y (A)) of GHF was 6.58% whilst the three-year annualised return (3Y (A)) was 4.26%.

The report further said during the first half of 2020, the Ghana Group, GNPC lifting on behalf of Government of Ghana, lifted the 14th and 15th parcels of crude oil from the Tweneboa, Enyenra and Ntomme (TEN) field, 53rd and 54th parcels from the Jubilee field, and the 4th and 5th parcels from the Sankofa Gye Nyame (SGN) field.

The report further said the Petroleum Holding Fund (PHF) received a total amount of US$235.28 million from lifting proceeds in H1 2020 compared to receipts of US$311.22 million in H1, 2019.

The total receipts from the 14th and 15th liftings from TEN field was US$110.25 million compared to US$117.37 million received in H1 2019 (10 th and 11 th liftings), whilst receipts from (53rd and 54th liftings) from Jubilee was US$65.88 million compared to US$123.85 million received in H1 2019 (47 th and 48th liftings).

The 4th lifting from SGN field was US$59.15 million in comparison to H1 2019 2nd lifting amount of US$70.00 million. Crude oil sale proceeds fell in H1 2020 in comparison to H1 2019 sale proceeds. This is as a result of a drop in crude oil prices induced by Covid-19 related lockdowns.

The 5th parcel of SGN and 16th parcel of TEN was lifted on the 7th of June and 21st of June respectively. The expected amount to be received in H2 2020 is US$30.56 million for SGN and US$36.01 million for TEN.

During the period under review, a total amount of US$74.85 million was received from various entities for the payment of surface rental, corporation income tax, and interest accrued on the PHF account.

The amounts received in respect of other income comprise US$0.659 million for surface rental, US$73.79 million for corporation income tax, US$0.18 million for interest on late payment and US$0.225 million from interest on undistributed funds held in the PHF account.