Kumasi: Petroleum industry players have been advised to exercise caution and prudence in managing financial resources throughout their operations. Mr. Theophilus Nyarko Ahwireng, Chairperson and Managing Director of MODEC Production Service Ghana JV Ltd, emphasized the importance of minimizing resource use during extraction processes to prevent excessive expenditure in business operations.
According to Ghana News Agency, Mr. Ahwireng highlighted during a public lecture at the College of Engineering at Kwame Nkrumah University of Science and Technology (KNUST) in Kumasi that prudent spending is crucial across all stages of the extraction value chain, from licensing to decommissioning. He stressed that optimizing financial resources at each stage could yield the needed value.
Mr. Ahwireng argued that cost management in petroleum extraction is more critical than the discovery itself. Without effective cost management, industries might utilize advanced technology for offshore oil extraction, but the revenues generated would only suffice to cover operational expenses. The lecture was themed 'Capturing the Optimum Value of Petroleum Resources: Looking Beyond the Fiscal Elements.'
He urged countries to develop robust frameworks that extend beyond just focusing on royalties and taxes, to fully harness their natural resources. He cited examples of nations like Norway, Trinidad and Tobago, and the West African Gas Pipeline Project from Nigeria, which have strategically managed resources to bolster their economies.
Highlighting Ghana's experience, Mr. Ahwireng noted that since taking over the Jubilee Oil Field, the country has generated and supplied oil products for electricity worth several millions of dollars over a decade. He emphasized the importance of discipline in petroleum-exploring countries, suggesting adherence to policies, legislation, and best practices.
He also called for clear mandates for state actors and alignment among revenue managers, resource managers, and policymakers. Quality development solutions and optimization along the petroleum value chain, as well as cost management, were stressed as vital for creating significant value beyond fiscal incentives.