An amount of $100.74 million accrued from oil lifted by Jubilee Oil Holdings Limited (JOHL), a subsidiary of the Ghana National Petroleum Corporation (GNPC) was not paid into the Petroleum Holding Fund (PHF) as required by law.
Section 7 of the Petroleum Revenue Management Act (PRMA), 2011 (Act 815) provides that all revenues due from the direct or indirect participation of the country in petroleum operations, including the carried and additional participating interests should be paid into the PHF.
However, according to the Public Interest and Accountability Committee (PIAC), proceeds made by JOHL through its first lifting (944,164bbls) on the Jubilee Field in the first half of this year, amounting to $100,748,907.95, was held by the company, which is not registered in Ghana.
“PIAC is convinced that the proceeds of liftings by JOHL forms part of Ghana’s petroleum revenues and therefore should be paid into the PHF”, PIAC said in its semi-annual report on the management and use of petroleum revenues for January–June 2022 released yesterday.
GNPC’s acquisition of a seven per cent interest from Occidental Petroleum (Anadarko WCTP Company) in respect of the Company’s DWT/WCTP assets for US$199 million took effect on April 1, 2021.
According to the PIAC report, the acquired interest was to be transferred to GNPC Explorco, a subsidiary of the Corporation.
It explained that the shares of JOHL were acquired at the cost of US$164,798,691.00 by GNPC through a Share Purchase Agreement between Anadarko Offshore and GNPC with monies advanced by the Ministry of Finance.
It said GNPC had started repaying the advanced amount of US$164,798,691 and that although the acquisitions were initially intended to be held by GNPC Explorco, they are in fact being held by JOHL, which is not registered in Ghana and could have tax revenue implications on the State.
The report said although the GNPC had indicated that they had sought the Attorney-General’s opinion before entering into the transaction, PIAC’s study of the opinion reveals that the Attorney-General did not comment on the issue of the advance by the State.
It said Contrary to Section 6(e)7 of the Petroleum Revenue Management Act, 2011 (Act 815), Capital Gains Tax was not assessed and collected by the Ghana Revenue Authority in the sale of the seven per cent interest by Anadarko in the Jubilee and TEN Fields in 2021.
“In its written response to PIAC on the matter, the Ministry of Finance referred the committee to the Ghana Revenue Authority for answers. The Ghana Revenue Authority, in turn, referred the committee to the Ministry of Finance indicating that the ministry was exclusively in charge of the transaction”, the report said.
Commenting on the matter, the Chairman of PIAC, Professor Kwame Adom-Frimpong said PIAC was expecting proceeds of liftings by JOHL to be paid into the Petroleum (PHF), as the Committee is convinced that the proceeds form part of Ghana’s petroleum revenues.