The Executive Director of the Danquah Institute, Gabby Otchere-Darko, has stated that industry experts estimate that every day that Ghana either flares gas or is unable to utilise the associated natural gas from Jubilee for power translates into $1.2 million a day in lost revenue.
“This means that for this year the avoidable delays in the development of the gas infrastructure will cost the country a minimum of $638 million”, Gabby said.
In addition to this, Gabby said some $412.6 million in corporate taxes appear to have been lost to the state from Jubilee and another $66.6 million from understated oil proceeds, implying that “Ghana stands to lose some $1,117.2 million in 2011 alone”.
Throwing more light on the loss of corporate taxes and understatement of oil revenues, amounting to $480 million so far, Gabby stated that an analysis of the petroleum receipts and distribution report, for the period ending 30th September 2011, published by the Dr Kwabena Dufuor on the 21st of November 2011 reveals that Ghana lost heavily under the Royalty Tax System it has adopted.
Explaining his point, Gabby said a GNPC publication of 10th July, 2008 indicated the Government of Ghana had as its total state shares, 38,209 (38.2%) barrels out of every 100,000 barrels produced. Thus, according to Gabby, it stands to reason that as the volume of crude oil lift increases over the period, Government of Ghana shares per the volume of lift should also show corresponding increases.
“However, this has not been the case. Government of Ghana shares have showed slight decreases whereas the volume of crude oil lifts is increasing over the period under review,” Gabby stated.
Gabby said there have been three liftings of oil by GOG/GNPC and its partners in the first three quarters of 2011 with 4,627,701 barrels lifted in the 1st quarter; 5,970,237 barrels for the 2nd quarter; and 6,966,962 barrels for the 3rd quarter.
“Government of Ghana shares have on the other hand witnessed reductions with 995,259 barrels being Ghana's shares for the 1st quarter; 994,691 barrels for the 2nd quarter; and 990,770 for the 3rd quarter. This implies that the volume of lift has been understated by 601,978 barrels valued at US$66,620,905.30”, Gabby noted.
Explaining further, Gabby stated that since the total volume of lift by the end of the third quarter amounted to 17,564,900 barrels, Ghana should have received a total of 6,709,792 barrels representing 38.20% but only had 2,980,720 barrels representing 16.96% made up of Royalties, carried and participation interests.
“Ghana is being denied the built up tax element of 3,729,072 barrels that has accrued so far, and by direct implications windfalls valued at US$189,063,950.00, which Ghana was expected to earn from it. The total value Ghana lost, can be put at US$412,696,398.00,” the DI man stated.
The Executive Director of the Danquah Institute, Gabby Asare Otchere-Darko made this known at a press conference organised by the Institute and held at the Ghana International Press Centre on Wednesday 21st December 2011.
Source: Danquah Institute/Ghana
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