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Business News of Wednesday, 24 June 2020

Source: goldstreetbusiness.com

Sixteen upstream oil companies owe US$1.57m surface rental fees


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Sixteen oil companies in the upstream sector have failsed to pay their surface rental fees, according to an audit report by the Auditor General Department.

The 2018 Petroleum Funds Report mentioned Tullow, Petrogulf Limited, Hess Ghana Exploration Limited, Kosmos Energy, Oil Field Energy Ltd, Britain-U Ghana Ltd, Springfield Exploration and Production Limited and Swiss African Oil Company Ltd as some of those that failed to pay as and when due.

The rest are AMNI Petroleum Dev. Co. Limited, GNPC Operating Services (GOSCO), Medea Development International Limited, PETRICA AS, Blue Star Exploration Ghana Limited and Erin Energy.

The report indicated that these entities have failed to honour their payments obligations into the Petroleum Holding Fund as stipulated by Section 3(2) of the Petroleum Revenue Management Act 2011 (Act 815).

Per the law, surface rentals are to be paid by the 15th day of each month.

However, the Auditor General observed that, regardless of stringent efforts to have especially Oil Field Energy Ltd, Britain-U Ghana Ltd, and Swiss African Oil Company Ltd to pay their obligations to the state, they have failed.

The report noted that the Ghana Revenue Authority (GRA) was collaborating with the Petroleum Commission to ensure they comply or face the necessary sanctions.

With reference to interest/penalty on late payment, it said section 93(5f) of the Petroluem Exploration and Production) Act 2016(919) compels the culprit to pay additional five percent of annual fee for each day of the first 30 days after the annual fee becomes due, in addition to the outstanding annual fee and after the 30-day period.

Regarding the unpaid surface rental fees, the report stated that the Ghana Revenue Authority has been informed of the situation and the Bank of Ghana was waiting its response.

“The estimated amount of penalties based on section 3(4) of Act 815 is US$10.79 billion. There is loss of income which would have been earned if the funds had been paid on time and invested,” the report said.

With respect to Gosco/Heritage Exploration and Production Ghana Ltd, the report said the company has not paid their surface rental fees for East Keta Ultra Deepwater Block for 2017-2018 assessments.

It has informed the GRA of a force majeure event that happened in December 2016 when the Togolese Navy interdicted and ordered the subcontractor engaged by the operator on behalf of the contractor parties to cease operations within the contract area.

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