Mining & Energy
Mozambique: New electricity rate to expand network is making a stir
In file CoM
The National Petroleum Institute (INP) will announce the results of a forensic audit of operating costs declared by the oil companies, after suspicions about the expenses presented by oil and gas industry multinationals surfaced.
The National Petroleum Institute (INP) says it has already completed the forensic audit of the operating costs declared by the oil companies in Rovuma Basin Areas 1 and 4.
“In a few days we will close everything,” the INP’s PCA, Carlos Zacarias revealed. “I can only anticipate that there are preliminary results, and our auditors are now finalizing the process.”
This operation came about because of suspicions that multinationals had inflated costs with a view to avoiding paying tax to the state, according to a Public Integrity Centre (CIP) survey.
The Administrative Court (TA) considers that the National Petroleum Institute is incapable of controlling oil operations in the country without knowing the costs borne by companies in the sector for certain.
Mozambican mining sector legislation is thought to encourage this type of scheme because the higher the expenses, the longer the state has to wait for its share of the profit in the business.
It should be noted that in the light of Mozambican legislation, an audit by the sector regulator must be carried out over a period of three years, and the TA therefore recommends that all necessary steps be taken to certify the recoverable costs and the government pronounce as soon as possible.
Experiences in other hydrocarbon-rich countries show that companies inflate operating costs to maximize profits. Timor-Leste, for example, has initiated a comprehensive auditing programme that has already culminated in hundreds of millions of dollars in additional revenue for the government there.Source: O País
Vigilance urged against trafficking in precious stones