Business News of Thursday, 13 July 2017
Member of the Public Interest and Accountability Committee (PIAC) is pushing for legislation to clarify which state institution should be given the mandate to collect surface rental as the country prepares to undertake onshore commercial production of oil and gas in the Volta Basin.
Dr. Steve Manteaw told the media in Koforidua recently, the current arrangement where the Ghana Revenue Authority (GRA) is mandated to collect surface rental in the country’s offshore oil fields while the Office of the Administrator of Stool Lands (OASL) also collects ground rent for mining activities, could create conflict with onshore oil production soon to commence.
Currently, Ghana’s Exploration and Production (E&P) law mandates the GRA to collect surface rental as pertained in the oil sector while the OASL does so in the mining sector.
Surface rental describes the fee paid for occupying the surface or area in the process of extracting the oil resource. Its equivalence in the mining sector is in the form of ground rent.
Dr. Manteaw, said, “Now when you have such a situation and we come to produce oil on the land, you will raise the question as to whether or not, GRA will continue to collect surface rental because it is the oil industry or that particular role will be assigned to the OASL because the land on which the oil is extracted is held in trust for the people by the chiefs and traditional authority.
Rationally, one will think that because the law requires that revenue derived from the exercise of the surface right is treated stool land revenue and paid to the beneficiaries through the OASL, it will be the OASL that will collect surface rental for onshore oil activities.”
Dr. Manteaw, who is also the Chairman of the Civil Society Platform on Oil and Gas (CSPOG), urged the government to enact a legislation to provide clarity as to which body to collects the surface rent.
“But again to the extent that we are dealing with an industry where in offshore, GRA is collecting the surface rental, one will assume that GRA should collect surface rental but then it also raises the question as to how GRA will disburse what it collects to the beneficiaries because here there are owners of the land and they are entitled to a share of the ground rent that is collected.
“So these are issues I think need some clarifications and some perhaps, legislative backing in terms of how we should proceed going forward,” he stated.
Six years into commercial production of oil offshore, the West African country is shifting attention to onshore oil exploration.
Freddie Blay, Chairman of state oil company, the Ghana National Petroleum Corporation (GNPC) said the country was in the process of awarding seismic test contracts for the onshore Voltaian Basin covering about five of the ten administrative regions (provinces) in the country.
“We are making more efforts at finding oil in the Voltaian Basin; therefore efforts are being made, seismic tests are going to be undertaken.
“Sooner than later, we are going to award the contract for the seismic tests to be carried out,” Mr. Blay told journalists.