18 June 2012

Ghana: Finance Minister Should Account for Unaccounted Oil Proceeds - PIAC

The Public Interest and Accountability Committee (PIAC), the statutory Committee established to monitor and evaluate compliance by the government and all other relevant institutions connected with the management and use of the nation's petroleum revenues, has called on the Ministry of Finance and Economic Planning (MoFEP), as a matter of urgency, to take steps to account for the 2011 unaccounted proceeds in the Petroleum Holding Fund, in a special report to Parliament.

It also warned the Duffuor-led Finance Ministry to ensure that all receipts are reported on time in future.

This was contained in a statement issued by the Chairman, PIAC Communication Sub-Committee, Mr. Yaw Owusu Addo, in Accra over the weekend, to react to the Ministry of Energy's statement on revenue from the Saltpond oilfield.

Mr. Owusu Addo, and his committee, further hit hard at critics saying that it was not an interest group, but a statutory body set up in the wisdom of the people of Ghana, as one of the key mechanisms to ensure that the nation's oil find does not become a curse, but a blessing.

In pursuance of its mandate, the PIAC encouraged all relevant bodies connected with the management and use of Ghana's oil revenue, to demonstrate their commitment to implementing the recommendations made in the 2011 Petroleum Revenue Management Annual report.

It could be recalled that in May, 2012, the PIAC launched its 2011 Annual Report as required by the Petroleum Revenue Management Act, 2011 (Act 815). But, the report uncovered some loopholes in the oil sector.

One of the key findings of the report was that "Not all payments expected to go into the Ghana Petroleum Holding Fund were reported on. Act 815 covers all oil receipts, and Section 6 of Act 815 lists surface rentals explicitly. The surface rentals were paid into the Government of Ghana Non-Tax Revenue Account in 2011, and not accounted for in the Petroleum Holding Fund, nor were payments from the Saltpond field included."

In answer to press queries about the Saltpond oilfield during the launch, the Chairman of the PIAC, Major Sowa Ablorh-Quarcoo, confirmed the Committee's inability to obtain payment records from that oilfield into the Petroleum Holding Fund for 2011.

In preparing the report, the committee sent the draft report for validation by the Ghana Revenue Authority and the Ghana National Petroleum Corporation. The committee, therefore, published the 2011 Annual Report in good faith, based on the information it had available.

However, a statement by the Ministry of Energy published in the press on 23rd May 2012, in reaction to the PIAC report, appeared to challenge this finding, and further disclosed that the oil revenues from the Saltpond oilfield in 2011 were paid into the Government Non-Tax Revenue Account, the statement stated.

In the PIAC's view, the Government Non-Tax Revenue Account is quite different from the Petroleum Holding Fund into which all petroleum revenues are required to be lodged, following the passage of Act 815 in April 2011.

The PIAC welcomed the information released by the Energy Ministry, as it allows the public to know what has been earned from the Saltpond Field, and goes to confirm the PIAC's firm position that not a pesewa was paid from the Saltpond oilfield into the Petroleum Holding Fund during the 2011 fiscal year.

In the statement, the Ministry of Energy said: "Surface rental of US$605 for 2011 is yet to be paid to Government by SOPCL (Saltpond Offshore Producing Company Ltd)." In the view of the PIAC, no matter how paltry that amount may seem, SOPCL should take urgent steps to pay all amounts owed, and the revenue collection authorities should ensure that the full amounts and penalties are paid as swiftly as possible.

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