According to a member of PIAC, Dr. Steve Manteaw, successive governments have breached the Act for seven years running.

[contextly_sidebar id=”irRV5jlgclluo8ms0PKIqY77zDbK7WpG”]The Act mandates the Finance Minister to report on all oil-funded projects in the year under review.

But Dr. Manteaw said the provision has been breached by various Finance Ministers including, Ken Ofori Atta.

“Over the period since we started producing oil in this country, the past ministers and the current Minister [of Finance] have not complied with that provision in terms of giving us update on the stage of completion of oil projects. A project inspection undertaken by PIAC recently has revealed that a lot of the projects are non-existent and those that are in existent, are deteriorating barely a year into their completion raising serious concerns about the quality of spending and value for money considerations that underpin the use of oil revenues,” Dr. Manteaw added.

Dr. Manteaw was speaking at a breakfast meeting in Parliament today, Tuesday, where he made the remarks.

PIAC needs prosecutorial powers

Some stakeholders within the oil sector had earlier called for more powers to given PIAC to prosecute persons who misappropriate Ghana’s oil revenue.

This in their estimation could empower PIAC to fully fulfill its mandate of ensuring the efficient management of the nation’s petroleum revenues for sustainable development.

About the Petroleum Revenue Management (Amendment) Bill, 2015

Parliament in 2015 passed the Petroleum Revenue Management (Amendment) Bill, 2015 into law.

The Bill amended an existing Act to provide for the allocation of Funds for the Ghana Infrastructure and Investment Funds, address some issues with the Ghana Stabilization Fund, the benchmark revenue projection, and further empower the Ghana National Petroleum Company (GNPC) to become a commercial entity and a strong operator in the oil and gas sector.

The law was expected to also provide a legal framework for the collection, allocation and management of petroleum revenue in a responsible, transparent, accountable and sustainable manner for the benefit of Ghanaians in accordance with Article 36 of the 1992 Constitution.

–

By: Godwin Akweiteh Allotey/citifmonline.com/Ghana
Follow @AlloteyGodwin

The post Petroleum Revenue Mgt. Act breached for 7-yrs running – PIAC appeared first on Citi 97.3 FM - Relevant Radio. Always.

According to him, the Chinese company which undertook the project, SINOPEC, engaged in fraudulent activities in the execution of the project.

Dr. Manteaw told Citi News that Ghana Revenue Authority which is investigating the matter has so far recouped about $15 million from the company for bloating the contract sum.

[contextly_sidebar id=”QVmPWF28RCC9tQhCo83rNEjNWxvJkmyx”]“What for me is so most worrying is the fact that through my investigations I discovered that a particular plant that was imported by SINOPEC for the project was overpriced by as much as $40 million and this did not catch the attention of our public authorities. And even though I raised the concern as far back as 2013, nobody took serious notice of it.”

“Again what I find to be so disturbing about this whole development is that Ghana Gas granted some tax concessions to SINOPEC which is not within its mandate. Because such mandates lies with Parliament which is not unusual but when this happens you need to go through the sector minister to come to Parliament for ratification. We did not seek Parliamentary ratification until 2016. The project was actually completed in 2014 so how do you come to Parliament in 2016 seeking ratification for tax exemptions for a project that is long been completed. That reduces the role of Parliament to rubber stamping,” Mr. Manteaw opined.

He further noted that he was surprised to discover that “Parliament approved the [$152 million] tax waivers without seeing the engineering, procurement, construction and commissioning contract with contains the fiscal exemptions.”

Background

SINOPEC was to construct the Atuabo Gas plant at Ellembelle in the Western Region to provide gas to meet the energy demands of the nation.

The $1 billion project which received stiff opposition from some members of the New Patriotic Party (NPP) in Parliament was later completed in 2014 and commissioned in 2015.

It was producing over 140 million cubic feet of gas per day to the Aboadze Thermal Plant at the time.

Logistics from Dubai

According to Mr. Manteaw as part of the processes of procuring logistics, pipes and equipment for the gas project, SINOPEC  set up an offshore company in Dubai by name FAZ which they procured the materials from.

“Because our authorities did not follow through these procurement activities of SINOPEC, the prices that were quoted were not fair market prices and so Ghana was shortchanged. I’m happy that the GRA has acted lately and investigated the matter. I’ve cooperated with them and given them as much as information that I have.”

“Even though the investigations are inconclusive yet, I’m informed that as much as GHc15million has so far been recovered in additional taxes and penalties imposed against SINOPEC,” he added.

–

By: Godwin Akweiteh Allotey & Obrempong Yaw Ampofo/citifmonline.com/Ghana
Follow @AlloteyGodwin

The post Atuabo project was bloated by over $40m – Dr. Manteaw appeared first on Citi 97.3 FM - Relevant Radio. Always.

He explained that the risks associated with such practice could shortchange the nation’s petroleum revenue.

He thus called for a price stabilization mechanism in tandem with transparency provisions enshrined in the nation’s petroleum laws.

Dr. Steve Manteaw raised these concerns when he presented a paper on the 2016 Semi Annual Report dubbed, “International crude prices and jubilee achieved prices.”

This was at the beginning of a three-day workshop on interrogating the 2016 Annual Public Interest and Accountability Committee (PIAC) report spearheaded by the Institute of Financial and Economic Journalists (IFEJ) and sponsored by the GIZ.

Dr. Steve Manteaw posited that excessive political interference continued to affect the profitability of commercial state owned enterprises including the Ghana Oil Company (GOIL).

He thus advised successive governments to discontinue the phenomenon of sacking Chief Executive Officers of state owned enterprises whenever there is change of political power.

He commended government for rescinding its decision to fund the flagship “Free Senior High School” policy with the Heritage Fund.

He underscored the need for government to always listen to the populace outcry on controversial issues likely to make President Nana Addo Dankwa Akufo Addo’s administration unpopular.

Some selected Journalists across the country were schooled on topics such as Ghana National Petroleum Company’s allocations and expenditure, levels of compliance of the Petroleum Revenue Management Act and Volta River Authority’s indebtedness to the Ghana National Gas Company.

–

By: Abdul Karim Naatogmah/citifmonline.com/Ghana

The post Hedging Ghana’s crude oil could be dangerous – Dr. Manteaw appeared first on Citi 97.3 FM - Relevant Radio. Always.

PIAC is a citizens-led statutory body established under section 51 of the Petroleum Revenue Management Act (Act 815) to provide additional non-parliamentary and independent oversight over the collection and utilization of Ghana’s petroleum revenues.

[contextly_sidebar id=”l75Xa0eyTRIE9u2qQejV7s4hXBGhZTum”]Dr Manteaw, a policy analyst told journalists attending a 14-day training course on oil, gas and mining that government interference has obstructed the activities of the Committee.

He said between 2011 and 2015, revenue generated from the oil sector stood at 3.2 billion dollars but a huge chunk – almost 70 percent of the revenue, was spent in the education sector.

Dr Manteaw, who is the campaign coordinator of the Integrated Social Development Center (ISODEC), a non-governmental organization, said PIAC has undertaken a national exercise and monitored the utilization of the oil revenue in some of the regions.

“The Committee has officially written to the Ministry of Petroleum to respond to some of the findings but about three months now the sector minister has not responded,” he said.

Dr Manteaw, who is also the Chairman of the Civil Society Platform, said substantial governance gaps remained in the country’s oil and gas industry saying the lack of integration of the sector into the rest of the economy is a teething challenge.

Mr Ishmael Edjekumhene, the Executive Director of the Kumasi Institute of Technology and Environment, a non-governmental organization and member of PIAC, said the responsibility to ensure the judicious utilization of the oil revenue was not a sole duty of PIAC alone.

He appealed to the media, civil society organisations and the public to develop the interest and monitor revenue inflows in the oil and gas sector.

–

Source: GNA

The post ‘Political tag’ impeding operations of PIAC – Manteaw appeared first on Citi 97.3 FM - Relevant Radio. Always.

Who is buying Ghana’s oil from the flagship Jubilee Field and recently, the TEN fields? Which companies are selling or buying them?

You may perhaps be asking, why does this matter? Oh yeah! It matters extremely because it’s an avenue for oil companies to escape taxes and to perpetrate fraud! Please spare some few minutes as we make sense of some leads in Ghana’s oil space.

Dr. Manteaw posed the question at a National Stakeholders forum on petroleum sector governance, organized by Friends of the Nation in Takoradi.

At that forum, he discussed with two other panellists – Benjamin Boakye of the African Centre for Energy Policy; ACEP, and Michael Asare-Akonnor of the Ministry of Finance on the theme; “Towards a decade of commercial oil discovery; progress made in addressing citizens’ concern”.

The moderator for the discussion; Solomon Kusi Ampofo, Communication, Advocacy and Campaigns Coordinator at Friends of the Nation posed this question.

“Dr. Manteaw, can you brief us on GHEITI’s report and what these reports reflect”?

Dr. Manteaw responds and I quote; “GHEITI… also requires transparency in commodity trading. I will cite example from the 2015 PIAC report. Over here, we found out that the Jubilee crude which the entire Jubilee partners are trading, sold at different prices over the same time frame. The highest achieved price was that of Tullow Oil which was somewhere in the region of $62-$64 per barrel. GNPC managed something around $52 per barrel and Kosmos also did $52 per barrel. This tells you that the two [GNPC and Kosmos] are selling at a fair market price.”

“When you delve into this statistics, it tells you that Tullow was able to get a higher achieved price [$62] because of its hedging policy. So Tullow hedged and won. But what is more intriguing is what Anadarko got for its oil, which is Jubilee crude. Anadarko sold for $44 per barrel. Jubilee crude? Selling at $44 per barrel? When others were selling 50 and 60?

[“…there is insider trading; trading within an affiliated entity. So they fix the price so low and sell it among themselves; and therefore, the lower the profit, the lower the tax on this profit they have to pay to the state. It’s possible”!-Dr. Manteaw, 2016]

Well, there could be explanations. It could be that, Anadarko hedged and lost; when Tullow hedged and won.
It could also be that Anadarko is not quoting the fair price. Maybe there is insider trading; trading within an affiliated entity. So they fix the price so low and sell it among themselves; such that, the lower the profit, the lower the tax on this profit they have to pay to the state. It’s possible! [Read about Mopani Glencore Scandal in Zambia and you will understand].

[Getting information in terms of what the companies are paying, and what is coming to the state are not enough. We need to be interested in who is buying our crude and at what price-Dr. Manteaw, 2016].

But, how do you establish that fact? We need to investigate it. But the question is; have we as a nation investigated it? The answer is No!

You see, getting information in terms of what the companies are paying, and what is coming to the state are not enough. We need to be interested in who is buying our crude and at what price.

[Either the suspicion that Saltpond Oil is mixed with stolen oil from Nigeria and other places is true, or it could be that indeed Saltpond Oil sold at a fair and right price but it is Anardako that is fixing price-Dr. Manteaw 2016].

And it becomes more interesting when you consider the fact that Saltpond Oil, which is a heavy crude, inferior crude, sold for $50 [in 2015], and Jubilee crude sold for $52. Really?

But that could also mean something. Either the suspicion that Saltpond Oil is mixed with stolen oil from Nigeria and other places is true, or it could be that indeed Salpond Oil sold at a fair and right price but it is Anardako that is fixing price.

So getting data on the price at which your oil is selling is as important as getting data on how much revenue you are getting as a state.

[During the first two years of oil production, we had a marketing arrangement with Cirus Oil and Vitol. Tried as I did to get a copy of the marketing arrangement, I failed-Dr. Manteaw, 2016].

In this direction, the GHEITI is interested in GNPC and how much they are selling our share of the Jubilee crude for and who is buying.

During the first two years of oil production, we had a marketing arrangement with Cirus Oil and Vitol. Tried as I did to get a copy of the marketing arrangement, I failed. Dr. Joe Abbey of CEPA also tried but failed to get a copy of the marketing contract.

I went all the way to write to the then minister of Energy and Petroleum Dr. Oteng Adjei to ask if we could get a copy of the contract. He told me those guys at GNPC are my friends so I know how to get it. I went to GNPC I did not get it.

[In whose interest is the reason the contract is been hidden, why?]

Now we have a contract with UNIPEK; a Chinese company which is now buying our oil. We have signed with an off taker agreement.

Thankfully through GHEITI, the contract is published now at GHEITI website. But it took some effort. I personally had to intervene to impress on the GNPC to make that document publicly available.

“So this is what the GHEITI is doing to push the frontiers of transparency in the management of the natural resource revenues in Ghana”.

Dr. Manteaw has been articulating similar sentiments on different natural resource platforms.

Stay connected for another edition of the Obrempong’s Oil Diary.
–
By: Obrempong’s Yaw Ampofo/citifmonline.com/Ghana

The post Obrempong’s oil diary: Who is buying Ghana’s oil? Dr. Manteaw asks appeared first on Citi 97.3 FM - Relevant Radio. Always.