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Secrecy over oil production cost

  • SOURCE: | qwesa2big
  • The actual cost of producing a barrel of oil from the Jubilee Field is still unknown, according to Ishmael Edjekumhene, Director of the Kumasi Institute for Technology, Energy and Environment (KITE).
    The Ghana National Petroleum Corporation (GNPC) appears unwilling to give information on this while the Ghana Revenue Authority is still waiting on oil companies to furnish it with the details, Mr Edjekumhene told a meeting organized in Accra on Thursday to launch two initiatives of KITE ? a Petroleum Revenue Assessment Model and a Career Guide to the Oil and Gas Industry in Ghana.
    The KITE Director hit a snag in his quest for information to test the Petroleum Revenue Assessment Model. But preliminary information he got which put cost per barrel at US$12.5 suggests that the operating cost for 2011 was in excess of US$300 million.
    Ghana failed to collect corporate tax from the Jubilee partners for the year 2011 because the companies claim they made no profit.
    A capital allowance arrangement allows Tullow and its partners to recoup a US$4.2 billion pre-production investment cost over a five-year period and this together with production costs are believed to have affected the collection of corporate taxes.
    These figures could be higher depending on what figures are released. ?We are sharing profits so the smaller the profits, the smaller our share,? he told the meeting, calling for plugging of loopholes to place the nation in good stead to collect what rightfully belongs to it.
    He observed that it was imperative and in line with the Petroleum Revenue Management Law (Act 815), 2011 for information to be released regularly and accurately to foster transparent management of petroleum revenues.
    According to him, KITE?s decision to develop the assessment model is underpinned by Government?s tacit commitment to ensure transparent management of oil and gas revenue, and a number of transparency and accountability provisions in Act 815.
    The assessment model was developed as part of a three-part project which also aimed at working with key stakeholders to develop participatory community development plans for the Jomoro District in the Western Region, and developing an Oil and Gas Career Guide for students, counselors and job-seekers. The project is supported to the tune of US$150,000 by the Strengthening Transparency, Accountability and Responsiveness in Ghana (STAR-Ghana) grant scheme.
    The model is meat to provide non-state actors (such as Civil Society Organisations) with a tool to be used to audit and authenticate petroleum revenues declared by the government, and help non-technical stakeholders to ask the managers of oil revenues relevant questions as well as ?deepen transparency and accountability in the management of petroleum revenues in Ghana.?
    The KITE director said the model ?is not a revenue forecasting tool. It is not to be used to track budget expenditure. What we have to do is to use this information to ask of duty-bearers to explain discrepancies? in figures put out there.
    Participants generally welcomed the model, describing it as useful. But there were concerns regarding the lack of inbuilt mechanisms in the model to prompt users when incorrect data is supplied.
    For Kwame Jantuah, a local content expert, there was reason to worry at the unavailability of information, noting it would pose a challenge to effective utilisation of the model.
    Isaac Tugun of the Ghana Federation of the Disabled (GFD), said the model presented the opportunity for civil society to step up demand for the passage of the Right to Information Bill into law.
    The RTI bill has been pending for almost a decade and half, with both the Rawlings and Kufour administrations failing to push its passage.

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