$100 million was not paid into Petroleum Holding Fund – PIAC

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The Public Interest and Accountability Committee (PIAC) has reaffirmed its 2021 report that $100 million of petroleum lifting revenue was not paid into the Petroleum Holding Fund.

Mr Nasir Alfa Mohammed, the Vice Chairman of PIAC, speaking at the public hearing of the Parliamentary Ad-hoc Committee on Censure of Mr Ken Ofori-Atta, Finance Minister, reiterated that in line with the Petroleum Revenue Act, all petroleum revenues must be paid into the Petroleum Holding Fund.

The Vice Chairman was at the Committee’s sitting to respond to Ground Three of Minority Caucus’ Motion, which alleges illegal payment of oil revenues into offshore accounts in violation of Article 176 of the 1992 Constitution.
Quoting from the 2021 PIAC Report, Mr Mohammed said in line with the Ghana National Petroleum Corporation’s (GNPC) strategy to increase its stake in viable oil blocks, the Corporation acquired a seven per cent interest from Occidental Petroleum (Anadarco WCTP Company) in respect of the Company’s DWT/WCTP assets for $199 million effective 1st April, 2021.

He said following that acquisition, which was later ceded to GNPC’s subsidiary (100 per cent subsidiary) – the Jubilee Oil Holdings Limited (JOHL), made its first lifting of 944,164 barrels of oil on the Jubilee Field in the first half of 2022.

“Mr. Chairman, an amount of $100,748,907.95 million, which was reported realized from the lifting was not paid into the Petroleum Holding Fund as required by law,” he said.

Citing section 6 of the Petroleum Revenue Management Act, 2011 (Act 815), Mr. Mohammed said “The following shall constitute the gross receipts revenues for the Petroleum Holding Fund – royalties from oil and gas, additional oil entitlements, surface rentals, other receipts from any petroleum operations, and from the sale or export of petroleum.”

“Any amount received from other direct or indirect part participation of the Government in petroleum operation. Corporate income taxes in cash from upstream or midstream petroleum companies…..”

He said section 7 of the Petroleum Revenue Management Act, as amended states that revenue due from direct or indirect participation of the Republic in petroleum operations, including the carried and participating interest shall be paid into the Petroleum Holding Fund.

He said it was the consideration of PIAC that contrary to Section 6 (e) of the Petroleum Management Act, 2011, (Act 815), capital gains tax was not accessed and collected by the Ghana Revenue Authority (GRA) in the sale of the seven per cent interest by Anadarco in the Jubilee and TEIN Fields in 2021.

“Mr. Chairman, the Committee did not rest on this issue. We wrote to both the GRA and the Ministry for Finance for responses on this issue.”

He said the GRA in their reply redirected PIAC to the Ministry of Finance, indicating that the Ministry was exclusively in-charge of the transaction.

“And the Ministry of Finance in turn referred the Committee to the Ghana Revenue Authority for answers,” he stated.
He noted that following this development, PIAC called all the stakeholders to a validation meeting, because the written responses were there, no one could deny.

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