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Body to coordinate oil & gas sector

  • POSTED ON: November 9, 2017
  • SOURCE: Graphic
  • CATEGORY:

A Multi-Agency Petroleum Revenue Committee (MAPERC) has been set up to coordinate the activities of state institutions involved in the oil and gas sector to improve petroleum revenue collection in the country.

The committee was formed following findings of a study conducted on oil and gas revenue collection policies, regulatory frameworks, existing systems and procedures against best practices.

The study, commissioned by the Ghana Oil and Gas for Inclusive Growth (GOGIG) programme and the Ghana Revenue Authority (GRA), recommended among other issues the need for the government to strengthen institutional consultation and coordination among government agencies whose respective mandates relate to petroleum revenue.The committee is chaired by the Deputy Minister of Finance (MoF) in charge of revenue, Mr Kwaku Kwarteng, and its member include representatives from the MoF, the GRA, Petroleum Commission (PC), Ghana National Petroleum Corporation (GNPC), Bank of Ghana and the Ministry of Energy.

They are expected to work periodically through an established consultation forum to come up with pragmatic measures that will address the challenges associated with the petroleum revenue collection.

The Finance Minister, Mr Ken Ofori-Atta, who inaugurated the committee, said the non-payment of taxes was pervasive, either due to the lack of knowledge or inability to capture all prospective taxpayers, and so it was important to create openness and share information.

He added that it was to increase revenue meant for the state to drive growth and seal all loopholes along the revenue collection value chain.

He explained that by making the rules tighter, companies that defaulted in making payments to the government would be penalised.

Mr Ofori-Atta also explained that after the International Tribunal of the Law of the Sea (ITLOS) ruling, the oil industry would experience positive developments.

He explained that exploration activities in the Keta Basin would also be expected to drive more local content, hence the need to be able to establish a rigid framework to help safeguard the integrity of operations in the sector.

“We have to be able to establish the framework so that there will be a sense of integrity around oil and gas. Ghana has to be different in managing its oil and gas revenues, just as Norway has been able to manage theirs well,” he said.

Terms of reference

MAPERC is to study and identify the constraints that have caused underperformance of oil and gas revenue in Ghana, identify the remedial measures to resolving the challenges identified and develop and share a doable work plan towards implementing these measures and towards helping all relevant state institutions implement the measures.

It also has a responsibility to prepare periodic reports on the achievements of targets and status of remedial measures to challenges related to petroleum revenue collection, and attempt to use the problem diagnostic approach to tackle issues of relevance to the industry.

Benefits of the MAPERC

The work of the committee will bridge the coordination gap existing among state institutions in the oil and gas sector to improve revenue collection; and strengthen the capacity of state agencies to strongly implement the institutional and administrative arrangements for revenue collection in Ghana.

Funding

This will be borne initially by the Ghana Oil and Gas for Inclusive Growth (GOGIG) while an exit strategy is developed to sustain the team for the purpose for which it was established.

The Team Leader for GOGIG, Mrs Adelaide Addo-Fening, said GOGIG was an initiative through which the UK government extended support to Ghana.

The key objective, she explained, was to support the country to maximise the benefit that could be derived from the oil and gas industry.

She said for the last two years, GOGIG had provided other forms of support for the oil and gas sector through research analysis.

The study, she said, raised a number of challenges with respect to how the international oil companies reported to the GRA, hence the need to clarify the guidelines and regulations.

“The setting up of the committee is a quick response to the study findings. We would like to assure the government of our continued support,” she said.

Mr Kwarteng said the committee attached a lot of seriousness to the national assignment and gave the assurance that they would deliver effectively on their mandate.

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