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Business News of Friday, 21 September 2012

Source: Daily Guide

Oil & Gas Industry Panics

Service providers in the country’s upstream petroleum industry are considering relocating to oil-producing countries in the sub-region.

This is because Petroleum Commission has imposed new licence and renewal fees on operators, contractors, sub-contractors and service providers.

Local service companies with annual turnover of $5 million and over are expected to pay an initial fee of $30,000 and a yearly renewal fee of $20,000 while those with annual turnover of between $2 million and $5 million are to pay an initial fee of $25,000 and a renewal fee of $15,000.

Those with annual turnover of between $1 million and $2 million are supposed to pay an initial fee of $15,000 and a renewal fee of $10,000 while firms with annual turnover of $1 million or less are to pay initial fee of $5,000 and renewal of $3,000.

The new licence and renewal fees took effect from July 20, 2012, a compliance letter sent to all service providers dated August 22, this year and signed by Kwabena Donkor, Chief Executive Officer (CEO) of the Petroleum Commission said.

It added that foreign service companies with turnover of $20 million and above are to pay an initial fee of $150,000 and renew their licenses at the same rate every year.

Foreign service companies with turnover between $10 million and $20 million are to pay an initial fee of $100,000 and renew their licences at that same rate while those with turnover of $10 million or less are expected to pay an initial fee of $70,000 and a renewal fee of $70,000.

For exploration and production companies such as Tullow, Anadarko, Hess, GNPC, Ghana Gas and Kosmos, they are to pay initial fees of $150,000 and renew their licences at that same rate while local exploration and production companies are expected to pay an initial fee of $30,000 and a renewal fee of that same amount.

According to members of the Ghana Oil & Gas Service Providers Association (GOGSPA), the new fees were abnormal and as such could destabilize their operations.

Nuetey Adzeman, Executive Director of GOGSPA, when contacted yesterday by Cty & Business Guide in Accra on the issue, said after members of his outfit received the compliance notice from the Petroleum Commission, the association petitioned the latter, Ministry of Energy and the Parliamentary Select Committee on Mines & Energy, among others, to review the quotations.

“No positive responses from the afore-mentioned organisations have yet been received. The quotations are astronomical and can completely throw local players out of business. Government should rather look at how it will build our capacity instead of the unrealistic fees.

“Also, those payments do not guarantee you a job.”

He said GOGSPA members have paid GH¢1,000 for permit from GNPC to operate their businesses with yearly renewal fee of GH¢100.

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