Business News of Tuesday, 19 March 2013
Source: Citi FM
The Africa Centre for Energy has observed that government’s expected revenue from corporate taxes from oil companies is likely to materialise this year.
According to expectations from this year’s budget, government is looking to rake in about $55 million. So far the Jubilee Partners have paid an amount of $40.2 million to government as corporate tax for 2012.
In a statement Africa Centre for Energy said “We however strongly believe that the 2013 projections of corporate taxes at US$55million is the most reasonable so far, and a significant improvement in forecasting considering that the GNPC’s equity financing requirement in Jubilee has considerably reduced from US$124.63 million in 2012 to US$71 million in 2013. In fact, the capital cost of GNPC in Jubilee is expected to be fully retired this year, consistent with the other Jubilee partners unless an unexpected loss carry-forward occurs”.
The Government has projected in the 2013 Budget Statement that total receipts from oil will be US$581.7 million based on projected oil production of 83,341 barrels per day and a crude oil price of US$94.36 per barrel. Thus, an estimated crude oil volume of about 6 million barrels will be lifted by the Government and the GNPC as the country’s share of petroleum.
The projections for the first time also include expected gas revenues as a result of gas production from the Jubilee fields which will likely commence in the last quarter of 2013.
An Energy Economist and Executive Director of the Africa Centre for Energy, Muhammed Amin Adam opined that “$300 million dollars we [Ghana] should have taken in corporate taxes 2011 we didn’t get, as if government didn’t know that the companies were going to recover their costs, in 2012 $150 million dollars we didn’t get and if you look at the budget, the minister said one of the reasons for the high budget deficit for 2012 included shortfalls in corporate taxes of which corporate taxes from oil companies is half of the shortfall”.
He added that “this year we are projecting $55 million and I am confident we can achieve that because I have looked at the figures in terms of how much capital cost is left to be recovered. The gross capital cost left to be recovered is about $971 million dollars and of this, the GNPC share in respect of the 3.75 paid interests they hold is about $36 million”.
The Centre has however raised some concerns with some projections in the 2013 budget. It says these issues must be addressed to protect the sanctity and spirit of the Petroleum Revenue Management Act 2011 (Act 815).