By BOURA GORUKILA
THE Commission of Inquiry into the Union Bank of Switzerland (UBS) K3 billion loan was told that the Government was paid only K40 million in stamp duty in the PAC LNG-Inter Oil transaction.
Commissioner General of the Internal Revenue Commission Sam Koim said the stamp duty was calculated on the land-rich asset, less the mining information.
“The land-rich asset was valued at US$825 million (about K2.89 billion) and the stamp duty calculated at two percent is K40 million which was paid,” he said.
“The mining information was valued at about US$75 million and stamp duty is not chargeable.
“All that PAC LNG produced was the mining information acquired during the prospecting stage and all that Inter Oil produced was the information they acquired during the prospecting stage over Papua LNG.”
He said PAC LNG and Inter Oil had not done anything to add value to the land-rich asset.
“Whatever expenditures they incurred was to acquire information that is also valuable,” Koim said.
“At the moment, there are no rules to govern how companies like PAC LNG and Inter Oil sell the information they acquired during the prospecting stage.
“It now begs the question whether during the prospecting stage they owned the land-rich asset as well as the mining information.”
He said the Mining Act and the Oil and Gas Acts vested ownership of subsurface resources to the State.
“At what stage does it gets transferred to the mining or petroleum company? Does the ownership gets transferred during the prospecting stage or the petroleum development stage?” Koim said.
“Because the transaction sold not only the information PAC LNG and Inter Oil acquired, but also the intrinsic value of the tenement itself. So I guess the academic question now is: did the State transfer the land-rich tenement to PAC LNG and Inter Oil because they sold it to Oil Search and Total?”
By BOURA GORUKILA