Ghana: Aftermath of Itlos Ruling... Oil Companies Rush to Pay Surface Rentals

21 December 2017

The judgment delivered by The Special Chamber of the International Tribunal for the Law of the Sea (ITLOS) recently has triggered a rush by licensed Oil companies operating at Ghana's oil production blocks to settle their Annual Surface Rentals.

Public Agenda is told that 14 out of the 17 companies in the records of the Ghana Revenue Authority (GRA) have paid their Surface Rentals. The remaining three are yet to pay following some issues regarding the ownership of their oil blocks.

The ITLOS ruled in September this year that Ghana did not violate the sovereign rights of Côte d'Ivoire with regards to the maritime boundary dispute.

Speaking in an Interview with Public Agenda In Accra last Thursday,Mr Samuel Sackey, Head of Petroleum Unit at the GRA said before the ruling by the ITLOS, most the Companies adopted the wait and see approach as they were skeptical about whether or not the ruling would go in Ghana's favour .

Mr Sackey said, "before the ruling, they [oil companies] adopted some wait and see attitude, they don't know whether Ghana will be successful or not. So for instance, if Ghana had lost the case, they would have lost their oil blocks, so naturally they were feeling reluctant to come and pay... but the moment somehow the judgment went in our favour, they saw that the blocks will be theirs so they came and made payments in order to keep hold of their blocks. That is how come we see huge sums of money coming out of the ITLOS Judgment."

Mr Sackey could not readily tell Public Agenda how much the Authority had raked in saying.. " the figure, I cant tell but out of the 17 operators that we have on our records,14 of them have paid .the three of them who have not paid have issues with their ownership of the blocks."

He referred to a the recent African Center For Energy Policy(ACEP) Report which he indicated had listed the reasons why the remaining three oil companies had not paid their surface rentals to the state.

The Public Interest and Accountability Committee (PIAC) in its 2016 Annual report had recommended to the Ghana Revenue Authority (GRA) to ensure that all outstanding annual surface rentals owed by licensed companies operating at Ghana's oil production blocks are paid with interest.

In the Report, PIAC said only five out of the 18 license holders' paid surface rental during the period under review.

Mr Sarkey added that after collecting the Annual Surface rentals, "what we have also done is that, this time,we have gone round to look for the business locations of all of them[the oil companies],so we normally visit them and have interactions with them and that approach is helping put the companies on their toes."

He disclosed that "Way back, we didn't know where they were. So sometimes when we serve this notice, we don't know where to find them. This time around we have located all their offices in Accra.

He mentioned that, the big players, Tullow, Cosmos, Anadarko Petro SA, AGM, EcoAtlantic Springfield, and others have all paid.

Mr Sackey spoke to Public Agenda after a workshop organized by Penplusbytes in partnership with Ghana Oil and Gas for Inclusive Growth (GOGIG).

The workshop formed part of Penplusbytes' "Enhancing the Role of the Media in Promoting Oil and Gas Sector Transparency and Accountability" project which is premised on building the capacity of the media to headline issues arising from the oil and gas sector since Ghana started producing oil in commercial quantities.

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