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31.10.2019 Business & Finance

Don’t Give Aker Energy $400m Tax Holiday – Alex Mould Cautions Gov’t

By News Desk
Don’t Give Aker Energy $400m Tax Holiday – Alex Mould Cautions Gov’t
OCT 31, 2019 BUSINESS & FINANCE

Former Chief Executive Officer of the Ghana National Petroleum Commission (GNPC), Mr Alex Mould has cautioned government not to give Aker Energy what he described as unprecedented exemptions in the resubmitted Plan of Development (PoD) in relation to the Pecan oil field.

If this is granted, he said, Aker Energy would be making a windfall profit of $400 million at the expense of Ghana.

The Ministry of Energy (MoE) in May 2019, asked Aker Energy to submit a revised version of the entire integrated Plan of Development (PoD), which the exploration and production company submitted to the MoE on 28 March 2019.

IMANI Africa had raised concerns about the oil find, indicating that the contractual agreements will short-change Ghana by approximately US$30 billion.

While addressing participants at the maiden Oil and Gas Conference at the University of East London in the United Kingdom, Mr Mould argued that the demands by Aker Energy are unprecedented.

“Aker purchased Hess for $100 million, Hess is saying they spent $1.2 billion in exploration and appraisal and Aker spent an additional $100 million doing the appraisal work. So Aker has spent only $200 million.”

“Now the catch here is that Aker Energy is trying to play a tax play for us to give them $600 million capital tax allowance (50% of %1.2 billion) in exploration and appraisal. That means they will make an automatic allowance of $400 million at the expense of government and I think this is wrong,” he insisted.

According to Mr Mould, it would come to haunt future governments, “ with these precedents which all oil and gas exploration companies will ask for, ” if it was granted.

He noted that there was no significant change to the resubmitted PoD and asked the Minister of Energy, Peter Amewu to come clean on the matter.

He called on Parliament and Ghana Revenue Authority to put a stop to it, adding that, institutions must be allowed to work.

The Energy Minister, Peter Amewu who was also at the conference confirmed the terms Aker is asking for in the submitted PoD and said it was still lying on his table.

“The PoD that you are talking about is lying on my table and I insist I am not going to give them the opportunity,” he stated.

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