The Ghana Extractive Industries Transparency Initiative (GHEITI) has urged the government to amend the Petroleum Revenue Management Act (PRMA) to avoid institutional overlap on the collection of surface rentals on onshore oil exploration.

GHEITI, in a report copied to the Ghana News Agency, said surface rentals or acreage fees, which are equivalent to ground rent in the mining industry, ought to be collected by the Office of the Administrator of Lands (OASL) in keeping with the dictates of the 1992 Constitution.

The body believed OASL was required by the Constitution to collect and distribute revenues, including ground rent to beneficiaries by a prescribed formula.

Surface rental refers to the fees or charges that a contractor pays to undertake oil and gas operations over a licensed area.

In Ghana, international oil companies pay fees on a licensed area to the Ghana Revenue Authority when undertaking oil and gas exploration.

Section three (3) clause three (3) of the PRMA mandates the Ghana Revenue Authority to keep records and account for surface rentals also known as the acreage feeds paid into the Petroleum Holding Fund.

Noting that Ghana’s oil and gas production activities are now carried out on the sea, with encumbrances on any adjacent land, GHEITI acknowledged that the current system of collecting surface rentals was justified.

It however maintained that when exploration activities commenced onshore, stool and family lands were likely to be encumbered, and the collection of acreage fees or ground rent would have to be taken over by the OASL and distributed as prescribed by the constitution.

GHEITI contended that if surface rentals on onshore explorations are paid into the Petroleum Holding Fund, it would amount to a flagrant infraction of the constitution since the operation was done on land.

It made two recommendations to prevent the challenge of institutional overlap in the administration of surface rentals when onshore oil exploration began.

GHEITI advocated that the GRA’s role be limited solely to the collection of surface rentals to offshore activities whilst the Office of the Administrator of Lands took care of onshore collections.

It recommended the GRA continue to collect acreage fees onshore and relinquish that role to the OASL when onshore oil is produced in commercial quantities.

Ghana has granted Swiss African Oil Company, a division of Swiss African Petroleum Ag, and PET Volta Investments its first onshore oil exploration permit in the Voltain Basin.

The joint venture between the Ghanaian government, the state-owned Ghana National Petroleum Corporation, Swiss African Oil Company Limited, and PET Volta Investments Limited was approved by Parliament after receiving the Keta Delta block license.