(Updates with comment from finance minister from first paragraph.)
June 9 (Bloomberg) -- Ghana, Africa’s newest oil producer, has hedged its crude sales at $107 per barrel from May to December as it seeks to stabilize budget revenue, Kwabena Duffuor, Minister of Finance and Economic Planning said.
“It is primarily an insurance program to ensure that we have a predictable minimum price for our exports,” Duffuor told reporters today in Accra, the capital. “This will help our budget not to be destabilized if crude prices fall.”
Standard Chartered Bank Plc, Citigroup Inc. and BNP Paribas SA helped set up the contract, he said.
Ghana, the world’s second biggest cocoa producer made West Africa’s biggest oil discovery in a decade from an offshore field in June 2007. Daily output from the Jubilee oil field is expected to climb to 120,000 barrels per day by July from 70,000 barrels now, according to Tullow Oil Plc, its operator.
Ghana started to hedge crude purchases in October last year, Duffuor said. It hedged 1 million barrels, or 50 percent of its monthly crude purchases, up to December, he said.
Because of the volatility in oil prices, the price at which Ghana hedged the imports differ from month to month, Kwame Adu- Okyere-Mensuo, a technical adviser at the Ministry of Finance said. “The average price is around $117 per barrel,” he said.
Crude oil gained for a third day after OPEC’s failure yesterday to reach an agreement on output targets for the first time in at least 20 years. Crude oil for July delivery climbed 38 cents, or 0.4 percent, to $101.12 a barrel at 9:50 a.m. on the New York Mercantile Exchange, extending the gain during the last 12 months to 36 percent.
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