There are a number of laws, policies and regulations that governs fiscal regime of oil and gas Ghana. This covers payment of royalties, annual fee in respect of acreage, tax, bonus payment and Additional oil entitlement. The contractor is obliged to pay Surface Area Rentals (Article 12.2(e) Model PA; Section 18 Petroleum Act) at the following rates;
Rate of Return (ROR)
AOE Less than 12.5% 0%
More than 12.5% but less than 17.5% 15%
More than 17.5% but less than 22.5% 20%
More than 22.5% but less than 27.5% 25%
More than 27.5% but less than 30%
The Petroleum Agreement has a total validity period of 30 years, 7 years of which is for exploration and the remainder for development and production until decommissioning. Contractors are required to provide periodic reports. They include quarterly operational and financial reports, and yearly statements of expenditure, among others. Ghana National Petroleum Corporation is mandated to enforce the provisions of the law and the Petroleum Agreement in the interest of Ghanaians.
In conclusion, the fiscal regime of Ghana’s oil and gas sector is important due to the revenue that may be accrued to government when proper and necessary procedures are followed to ensure that the country gets optimum benefits from the oil find.
BY: DAVID ADUHENE TANOH-www.reportingoilandgas.com