Don't give Aker Energy $400m tax holiday - Alex Mould to govt
Energy and finance expert, Mr Alex Mould has advised against giving Aker Energy tax exemptions in a re-submitted Plan of Development (PoD) in relation to the Pecan oil field.
According to Mr Mould, if this, which he described as "unprecedented" was granted, Aker Energy was going to make a windfall profit of $400m on a tax play.
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The Ministry of Energy (MoE) in May this year, 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 March 28 this year.
But, Mr Mould, a former Chief Executive of Ghana National Petroleum Corporation (GNPC) addressing participants at the maiden Oil and Gas Conference at the University of East London in the United Kingdom on Tuesday evening [October 29, 2019] said the demands by Aker Energy were unprecedented.
“Aker purchased Hess for $100m, Hess is saying they spent $1.2bn in exploration and appraisal and Aker spent additional $100m doing the appraisal work. So Aker has spent only $200m.
“Now the catch here is that Aker Energy is trying to play a tax play for us to give them $600m capital tax allowance (50% of %1.2bn) in exploration and appraisal. That means they will make automatic allowance of $400m at the expense of government and I think this is wrong” he disclosed.
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 there were no significant change to the resubmitted PoD, “it therefore begs the question: ‘In the letter our Minister for Energy – Hon Peter Amewu – wrote to Aker Energy, what changes did he ask them to make to the original PoD?’
He called on 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.
Attached below is Mr Mould's full address