Jubilee test run yields between 20,000 and 80,000 barrels of oil per day

The Jubilee oil field has began yielding between 20,000 and 80,000 barrels of oil per day in test runs ahead of commercial production of oil, the Daily Graphic newspaper has reported.

The newspaper citing Mr. Kwame Ntow, the Head of Economic Evaluation at the Ghana National Petroleum Corporation (GNPC) said the quantity will be increased to 100,000 barrels when mainstream production is attained by the end of the first quarter of 2011.

Mr. Ntow told the newspaper that the oil is being pumped as part of a test run of equipment at the largest oil field to be discovered in West Africa in the last 10 to 15 years. The Jubilee oil field according to Tullow Oil, the major stakeholder in the field has 17 wells and contains 1.5 billion barrels of oil.

Output is expected to peak to 120,000 barrels per over approximately six months, he said.

Tullow Oil had said in its Interim Management Statement that commercial production of oil will begin early December 2010, and they were expecting to pump about 50,000 barrels of oil per day.

ghanabusinessnews.com

SABMiller rejects ActionAid allegations of tax evasion in Ghana

SABMiller Group, owners of Accra Brewery Limited says it strongly rejects allegations of tax evasion in Ghana and other parts of the developing world where it owns subsidiaries. 

In a widely publicized report released in London Monday November 29, 2010 by the civil society group ActionAid, the organization says the multinational giant SABMillier has turned its subsidiary in Ghana, Accra Brewery Limited into what “has become a textbook example of the techniques used by big business to avoid corporate income taxes.” An act described as “aggressive tax planning,” it said.

In the report titled “Calling Time: Why SABMiller should stop dodging taxes in Africa”, it says SABMiller has paid no income tax in the past two years, but transferred millions of pounds to sister companies in tax havens.
 The SABMiller group makes profits of over £2 billion a year, it adds.

According to ActionAid, it used published financial information, interviews with government officials and undercover research to find out how SABMiller avoids tax across Africa and India.

“The cost to the governments affected may be as much as £20 million per year,” the report said.

The report says SABMiller, which is the world’s second largest beer company, with interests across six continents has 65 tax haven companies, which allows it to use clever accounting to siphon profits from African and Indian companies to those tax havens. According to the report the act reduces SABMiller’s African corporation tax bill to an estimated fifth of what it should be paying.

However, in a press release in reaction to the report which has been sent to ghanabusinessnews.com, SABMiller says it strongly rejects the allegations made by ActionAid in its recent report on the group’s tax affairs.

“SABMiller does not engage in aggressive tax planning in any part of its operations, and the report includes a number of flawed and inaccurate assumptions,” it said.

The company insisted that compliance with tax laws underpins all of its corporate governance practices. “We actively engage with revenue authorities and we are open and transparent with our affairs.  We follow all transfer pricing regulations within the countries in which we operate and the principles of the OECD guidelines,” it said.

According to SABMiller, its companies pay a significant level of tax.  In the year ended 31 March 2010, the group reported $2,929 million in pre-tax profit and group revenue of $26,350 million.

“During the same period our total tax contribution remitted to governments, including corporate tax, excise tax, VAT and employee taxes, was just under $7,000 million.  Seven times that paid to shareholders.  This amount is split between developed countries (23%) and developing countries (77%).  In both Colombia and South Africa, we contributed over $1,000 million in taxation to each respective government’s revenues,” it added.

ActionAid however, insists that despite the fact that SABMiller subsidiary Accra Brewery is Ghana’s second-biggest beer producer, pumping out £29 million (Gh¢69 million) of beer a year, and rising,  in the past two years it has made a loss, and it paid corporation tax in only one of the four years from 2007 to 2010.

ghanabusinenessnews.com

Accra traders complain about high interest rates charged by banks

Traders at the Kaneshie Market in Accra are complaining about the high interest rates charged by commercial banks in the country.

The women expressed their worries when ghanabusinessnews.com spoke to a number of the traders last week.

Mrs. Lydia Thompson, a beef seller who has been in the business for the past 20 years said she started her business with an initial capital of GH¢1.30p.

“I started with a carton of beef,” she said. She raised this amount from her personal savings she told ghanabusinessnews.com.

Even though she used to take loans from the non-bank financial company, Pro-Credit, but not any more.
“I used to get loans from Pro-Credit. I would normally take a loan of GH¢500 but now the bank has changed its policy and would only give loans of up GH¢1000 with collateral, but because I don’t have collateral I am unable to access loans from them any more,” she said.

According to Mrs. Thompson business has been slow these days and so she has added sachet water to the beef business so she could make some additional income.
Mrs.Eunice Tabiri sells corn-dough. She told ghanabusinessnews.com that she has been in the business for the past 15 years. According to her, she started the business with one sack of maize which she used to buy at GH¢6 but which now costs GH¢75.

She said even though her business has not been doing well like when she started, because her profit margin has narrowed, she is unable to go to the banks for financial assistance.
“I am not sure I would go to a bank for a loan, because the interest rates are just too high, and I fear I might not be able to pay back,” she said.

“The banks,” she said, “might even seize your property if you default in payment of loans. I can’t stand that,” she added.

Onion seller Mrs. Grace Duodu said she began trading with one sack of onion which cost GHp70 15 years ago, but now that sells at GH¢200.

She said her brother gave her the start-up capital to begin her business.
“But later in my trade, I have accessed some loan from the Women’s World Banking. But the interest rate was too high, I was unable to repay and my business nearly collapsed,” she said.
“As a result,” she said, “I do not go to the banks for help.”

Madam Yaa Mirekua, who sells yams, said she started the business in 1983 with a capital of GH¢6, but said these days one would require at least GH¢1000 to be able to start her kind of business.

Mad. Mirekua said, because the cost of yam has gone up in recent times, she has been compelled to access loans from the bank to sustain the business but the interest rates are a problem to her.

“I used to access loans from Sinapi but now I have applied for a loan from a finance company called Advans,” she added.

She said even though business is not that good, she is optimistic that during Christmas the business would pick up.

The Bank of Ghana’s policy rate is 13.5%. That is the rate at which it borrows to commercial banks.

However a recently released  Annual Percentage Rates (APR) and the Average Interest (AI) paid on deposits as at October 31, 2010 by the central bank gives a picture of what commercial banks pay their clients as interests and what they charge on loans.

The Trust Bank pays the lowest interest on deposits at 5.52%. The Bank of Baroda offers 11.33% and the Stanbic Bank has the highest interest rates for depositors at 15.17%. UT Bank charges the highest on borrowing. Borrowers pay   35.90% on loans, while the National Investment Bank charges  35% on loans.

Click here for a copy of the document from the Bank of Ghana detailing the rates.

ghanabusinessnews.com