2023-11-16 16:50:22
Ghana plans to introduce a more flexible oil royalty regime next year to boost investment and reduce risks for energy companies, the head of Ghana’s regulatory authority said on Thursday. state’s oil sector.
Egbert Faibille Jr, CEO of the Ghana Petroleum Commission, told Archyde.com the energy minister had accepted the new royalty regime, paving the way for it to be submitted to cabinet for adoption next year.
“A carefully calibrated, flexible and progressive regime would replace the current ‘inflexible and regressive’ tax regime that stifles investment and crude oil production in the West African nation,” Faibille said, adding that a regime of Two-tier royalty rates would be proposed.
He added that the new regime would take into account risk factors such as water depth, production volume and crude oil price.
Ghana’s current royalty regime is set at 4%-12.5% of gross oil production and 3%-10% of gas exported volume.
“A declining royalty regime is progressive and encourages the development of fields of all sizes, all water depths and in volatile price environments, without having to renegotiate fiscal terms,” Mr Faibille said.
Ghana, the world’s second largest cocoa producer, became an oil producer in 2010. Production is currently around 160,000-170,000 barrels per day of crude oil and regarding 325 million standard cubic feet per day of natural gas.
The oil companies present in Ghana are Eni, Tullow and Kosmos.
Mr Faibille told Archyde.com the Commission also planned to invest in the acquisition of seismic data to reduce risks associated with Ghana’s offshore and shorten exploration and production timelines for companies.
He said estimates show that Ghana will need regarding $200 million to obtain seismic data for every 31,000 square kilometers and it will take six months to gather the relevant data on the country’s territorial waters. (Reporting by Maxwell Akalaara Adombila, Editing by Bate Felix and Susan Fenton)
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