Even before the dust around the dubious GNPC-Genser Energy gas sale contract could settle, the West African nation’s national oil company, GNPC, is in the news again for another bad reason.
This time, it is about the revenues accrued from the seven per cent interest in the Jubilee and TEN petroleum fields which GNPC failed to lodge into the Petroleum Holding Fund as required by the Petroleum Revenue Management Act (PRMA).
Instead, the Corporation is alleged to have diverted the revenues into the account of Ghana Offshore Holding Company in breach of the PRMA.
Earlier this week, a former chairman of the Public Interest and Accountability Committee (PIAC) raised concerns about the issue and called on the Corporation to return the over $100 million oil revenues to the Petroleum Holding Fund as stipulated by the Petroleum Revenue Management Act.
“The Petroleum Revenue Management Act stipulates that all petroleum revenues howsoever derived are to be first deposited into the Petroleum Holding Fund. There is a good reason for that, which is to enable us to track the revenue flows and demand accountability in terms of how they are disbursed and utilised.
“Contrary to this provision in the Petroleum Revenue Management Act, my information is that Ghana has lifted some oil in respect of that 7% and GNPC has deposited the proceeds from that transaction in an offshore account in the name of the Offshore account,” Dr. Steve Manteaw said as quoted by Citinewsroom.com.
According to Dr. Manteaw, this act by GNPC is illegal.
“My view is that this is a departure or a complete contravention of the provisions of the petroleum revenue management acts, and GNPC has no legal basis for keeping a portion of petroleum revenues outside the petroleum revenue management framework. We’ve had some discussions and GNPC has proffered some explanations but I remain to be convinced that, that action sits well within the legal framework,” he added.
On Thursday, Ghana’s Minority Members in Parliament joined Dr. Steve Manteaw and the Public Interest and Accountability Committee (PIAC) to put pressure on the GNPC to return the missing oil cash into the Petroleum Holding Fund as required by law.
In a statement issued by the Ranking Member of Mines and Energy Committee in Parliament, John Abdulai Jinapor, said: “We have become aware that following the acquisition of a Seven percent (7%) interest in the Occidental (Oxy) transaction in respect of the Jubilee and TEN Fields by the Government ostensibly for GNPC in 2021, the Minister for Finance has clandestinely ceded the shares to an offshore company known as JOHL (a company set-up in the Cayman Islands) in a very surreptitious and opaque manner.”
The statement said the Minority is very much alarmed that contrary to requirements of the PRMA, revenues accruing from the nation’s oil fields are not being paid into the Petroleum Holding Fund (PHF), which has been confirmed in the 2022 semi-annual report on petroleum receipts by the Public Interest and Accountability Committee (PIAC).
As if this is not enough, the report further reveals that Capital Gains Tax was not assessed and collected by the Ghana Revenue Authority (GRA) in the sale of the seven per cent interest by Anadarko in the Jubilee and TEN Fields in 2021.
“This NPP Government is proving by the day that the nation’s oil resources cannot be entrusted in their care because not long ago, the PIAC, under the chairmanship of Dr Steve Manteaw, accused them over their inability to account for about GHȼ2 billion of Ghana’s oil cash for the 2017, 2018 and 2019 fiscal years.
“This is surely another ‘Agyapa’ deal in the making and we, as a Minority, will not sit aloof for this government to raid the national purse, especially at a time when the nation is struggling to raise much needed revenues for critical expenditure,” the statement said.
“We demand that the Minister for Finance and for that matter government, must, with immediate effect, repatriate all such illegal transfer payments into the Petroleum Holding Fund (PHF).
“Failure to comply with our ultimatum will compel the Minority to use the necessary parliamentary processes to haul the Minister for Finance to parliament for possible censure,” the statement concluded.
However, reacting to the issue on an Accra-based Class 91.3 FM, Friday, 30th September 2020, Chairman of the Mines and Energy Committee in Parliament, Samuel Atta Akyea said his findings showed that “there was an opinion from the Attorney General to the effect that they needn’t place the money in that account for the simple reason that there’s a seven per cent equity acquisition in the TEN and Jubilee fields by GNPC Subsidiary and they didn’t have the money, so the Ministry of Finance lent them the money so they do this acquisition; they are trying to improve the governmental stakes in these petroleum blocks.
“When they [GNPC Subsidiaries] took the loan, they were unable to pay it, so they used the petroleum receipts due them to settle it, so the Ministry of Finance took the money and paid for the loan upfront,” Mr Atta Akyea explained.
“The whole problem is simple: that the sheer fact that the money was not lodged in the PHF does not mean the money has been spirited away or stolen. It’s all a balancing account but when it is pushed to the political dimension that some money has been spirited away, it leaves much to be desired,” he added.
He said: “The sum of money, if you look at it, is equal to the seven per cent equity stake that the government, through GNPC Subsidiary, has acquired. Let’s look at it from that perspective. So, when somebody is using his ingenuity to confer advantage and benefit to Ghana, ultimately, how can that be a problem?
“And if the money was not so lodged in the PHF but it is shown that, indeed, the shares have been acquired, and the shares have been paid for, how can that be anything to undermine this country financially?” he wondered.
He continued: “Are we looking at the substance or the form? The sheer fact that the money was not lodged in the account but the money has been applied as it can be applied in the share acquisition to the benefit of Ghana.”
Mr. Atta Akyea, who is the MP for Akyem Abuakwa South in the Eastern Region, said: “My concern, with the greatest of respect, is that even if administrative processes were not followed, is there any disadvantage to Ghana when seven per cent shares have been acquired in the TEN and Jubilee fields?
“That is the point of the matter. If administrative procedures were not followed, has it caused any financial loss to the state or it has helped us financially because if we are not careful, anything becomes political and propaganda.”
He added: “My joy is that no money has been lost to the state yet because we have gained. If there are any tax implications on this transition, then they should be called upon to pay the tax.”