A former Chief Executive Officer of the national oil company of the Republic of Ghana, GNPC, Alex Kofi Mould has lashed out at the Government of Ghana, describing it as a government which lacks knowledge of the management of the petroleum industry.
His description of the government follows a statement by the country’s Ministry of Energy in response to his earlier comment on the amendment of the Aker Energy /AGM petroleum agreement, in which he accused the government of bestowing massive historical damage to the oil and gas sector.
Alex Mould who is also a financial analyst questioned the motive of the government in rushing the Aker Energy petroleum amendments for approval when due processes had not been followed.
“Sadly, these amendments also provide sweeping tax exemption for Aker and AGM, its subcontractors and sub sub-contractors. No withholding taxes in the case of AGM itself, and a reduced withholding tax rate of 5 percent instead of the 15 percent withholding tax for any work or services or supply or use of goods, both to domestic and international transactions.
“It is reckless to exempt withholding tax for international transactions; this is akin to surrendering taxing rights to a foreign state because the foreign state will apply tax on its worldwide income and will result in permanent revenue loss for Ghana. Additionally, exempting withholding tax on domestic transactions may lead to tax evasion as the trail is lost; eventually resulting in large scale tax loss due to avoidance,” he said.
However, the Energy Ministry, in a press statement, accused the former GNPC CEO of misinforming the public and especially industry players with his bogus analysis of the issue.
According to the Ministry, the amendments to the Petroleum Agreements of Aker Energy and AGM were to provide regulatory certainty and incentives to support the realisation of Aker’s Pecan Project and increase investment in the AGM block respectively.
“These incentives have already yielded positive results for the country as AGM recently announced crude oil discoveries following an accelerated drilling campaign,” the Ministry explained.
“It is important to state that in the amendments of the AGM Petroleum Agreement, we negotiated a higher net gain for Ghana. We reduced our commercial paid interest and the subsequent exposure of GNPC but raised the free carried interest of the state. This resulted in a Benefit-Cost ratio of 19 in favour of Ghana against 11 in the original Agreement.
“The Ministry wishes to advise Mr Mould and others who conduct themselves in similar ways to contact the appropriate institutions where they lack information on any issue in the oil and gas sector. As former CEO of GNPC, he cannot rely on uninformed commentators for information on critical subjects like petroleum for the purpose of conducting analysis for public consumption. Our doors are always open,” the Ministry advised.
This response from the Ministry has not sit well with Alex Mould, thereby prompting yet another response to the issue.
In a statement during the weekend Mr Mould said: “it is truly sad to think that the Energy Ministry and for that matter President Akufo-Addo’s government genuinely has so little understanding of this industry.
“It does so by amending the regulations that have industry-wide application. This was pure favouritism. However, it will lead to a stampede of International Oil Companies looking for similar treatment (and perhaps that is what MoE wants).
“The rules were clear-the problem was simply that Aker sought special extra-legal treatment and MoE was willing to bend over backwards to please Aker. When it talks about incentives to support the realisation of Aker’s Pecan Project Government is either unforgivably naïve or disgracefully dishonest (or both),” he emphasised.
“If Aker did walk away, it would simply lose its rights and would not be entitled to compensation. Any moderately seasoned negotiator would have called Aker’s bluff immediately.
“If the intention was to increase investment, then, the SDWT Amendment agreement would capture Aker’s enhanced work and expenditure commitments. No such commitments are given in the Amendment Agreements.
“MoE is claiming (with no shame) that amendments to a Petroleum Agreement ratified on December 22, 2019, led to an oil discovery six months earlier in June 2019?! Even if MoE is referring to the Amendments it presented to Parliament in April last year, the claim makes no sense. At the time that Aker started drilling in June, Parliament had not ratified any amendments.
“I should also point out that the two wells Aker drilled in June were not in any way ‘accelerated’. They were wells due in the Initial Exploration Period under the original PA. And since MoE is promising an accelerated drilling campaign, it should tell the public when the next well is expected. Can MoE deny that Aker’s current programme does not include any new drilling before the third quarter of 2021? Is this the ‘acceleration’?” he quizzed.
Click on the link below for the full statement
Source:www.energynewsafrica.com
