Norway’s Minister for Environment and International Development, Erik Solheim, has advised the government of Ghana to adopt Norway’s format of putting a higher tax on oil and gas rather than taxing windfall profits.
Making this known in an interview with the Oxford Business Group (OBG), a global publishing, research and consultancy firm recently in Accra, Mr. Solheim said oil companies are prepared to do business in countries with high tax rates if the market they are entering is stable.
The minister continued that “the most important thing for oil companies is predictability,” adding, “In Norway’s case, investors still want to come and it will be the same for Ghana if companies feel confident that the taxation rate, though high, is consistent over time.”
Norway has played a key role in assisting Ghana since its major oil discovery in 2007 by helping it to draft its Revenue Petroleum Management Bill.
It has also advised government on a number of processes including taxation and negotiation with oil companies.
Solheim believes following best practices is pivotal to minimising environmental risks during hydrocarbons exploration.
He said: “There have been a lot of technological improvements over the last few years, so we always need to look at the best practices and undertake sound, transparent studies before embarking on new oilfield activities,” he said.
He further expressed the belief that emerging oil countries like Ghana would be well-placed to contribute to upstream activities in Norway when its hydrocarbon production eventually declines.
“We want Norwegian oil businesses to invest abroad as long as their investments are in accordance with the best practices and sound management,” he said. “As such, countries such as Ghana will become increasingly important.”
Solheim’s full interview with OBG is captured in the latter’s forthcoming, first-time guide on the country’s economic activity and investment opportunities, titled: The Report: Ghana 2011. The report will include a detailed sector-by-sector guide for foreign investors, together with a wide range of interviews with the most prominent political, economic and business leaders in Ghana including President John Evans Atta Mills and Dr Kwabena Duffuor, Minister for Finance and Economic Planning.
The Report: Ghana 2011 will mark the culmination of more than six months of on-the-ground research by a team of analysts from OBG, provide information on opportunities for foreign direct investment into Ghana’s economy and present a guide to the many facets of the country, including its macro-economics, infrastructure, banking and sectoral developments.