(a). The Petroleum Holding Fund (PHF) is a designated public fund at the Bank of Ghana for receiving and disbursing petroleum revenue due the Republic. As provided in the Petroleum Revenue Management Act as amended disbursement of the PHF is done in following order of priority:

1. National Oil Company for:

• Equity finance costs, advances and interest of the carried and participating interest of the Republic; and
• Cash or the barrels of oil equivalent of petroleum that shall be ceded to a national oil company out of the carried and participating interest on the recommendation of the Minister and approval by Parliament. The cash or barrels of oil equivalent shall not exceed 55% of the cash flow from the carried and participating interest after deducting the equity finance cost. Fixed for 15 years from the date the Act came into force, but subject to 3-year review by Parliament. After receipt of funds into the Petroleum Holding Fund, Bank of Ghana is obliged to transfer the amount to a national oil company within 3 days.

2. Annual Budget Funding Amount (ABFA). That is, into the Consolidated Fund to support the annual budget. Where actual petroleum revenue into the PHF net of the allocation to the National Oil Company in a year is equal to or more than the Benchmark Revenue not more than 70% of the Benchmark Revenue is paid into the ABFA. Where actual petroleum revenue into the PHF net of the allocation to the National Oil Company in a year is less than the Benchmark Revenue not more than 70% of the actual petroleum revenue is paid into the ABFA.
3. Ghana Petroleum Funds (GPF) which consists of the Stabilisation Fund and the Heritage Fund. These funds are saved and invested. The Stabilisation Fund is used to cushion the budget in times of shortfalls in petroleum revenue. The Heritage Fund is to provide endowment to support development for future generations when petroleum reserves have been depleted and to receive excess petroleum revenue.
   Where actual petroleum revenue into the PHF net of the allocation to the National Oil Company in a year is equal to or more than the Benchmark Revenue not less than 30% of the Benchmark Revenue is paid into the GPF. The excess over the Benchmark Revenue is also paid in the GPF. Where actual petroleum revenue into the PHF net of the allocation to the National Oil Company in a year is less than the Benchmark Revenue not less than 30% of the Benchmark Revenue is paid into the GPF. 30% of the amount paid into the GPF is transferred to the Heritage Fund and the remainder is paid into the Stabilization Fund.
4. For exceptional purposes. To refund tax overpayment; payment of royalties to communities in respect of onshore operations; payment of compensation to communities adversely affected by petroleum operations.

(b). The three different but related operations/activities in the petroleum industry are the Upstream, Midstream and Downstream Petroleum Operations.

The upstream oil and gas operations involve exploration, evaluation and appraisal, development, production of oil and gas and decommissioning.
Exploration means the search for petroleum by geological, geophysical and other methods, and the drilling of exploration wells. Evaluation and Appraisal means analysis of seismic data and other information, and drilling of wells to determine the commerciality of a discovery. Development refers to the drilling of development wells, construction and installation of equipment and facilities for production. Production refers to the activities undertaken to extract, save, treat and transport oil and gas to storage or offloading points. Decommissioning refers to the removal of facilities and equipment and plugging of wells at the end of the operations.

The Midstream oil and gas operations include storage and transportation of oil and gas. Oil is transported by tanker, pipeline, barge, truck. Gas is transported mainly through pipelines and LNG by Floating Storage Regasification Units (FSRU).

The downstream petroleum operations include oil refineries, petrochemical plants, fuel product distribution and retail outlets. Fuel products include gasoline, diesel, jet fuel, heating oil, asphalt, lubricants, synthetic rubber, plastics, fertilizers, antifreeze, pesticides, natural gas, propane, etc.